Independent Auditor''''s Report
TO THE MEMBERS OF ADANI POWER LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of ADANI POWER LIMITED ("the Company”) which comprise the Balance Sheet as at 31st March, 2017 and the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement, the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the standalone Ind AS financial statements”).
Management''''s Responsibility for the Standalone Ind AS Financial Statements
The Company''''s Board of Directors are 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 the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 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 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.
In conducting 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 there under.
We conducted our audit of the standalone Ind-AS financial statements in accordance with the Standards on Auditing 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 the 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 the 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 obtained by us 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, and read with our comments in the Emphasis of Matters paragraph below, the aforesaid 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 31st March, 2017, and its loss, total comprehensive loss, its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matters
We draw attention to:
(i) Note 40 to the standalone Ind AS financial statements which describe the key sources of estimation uncertainties as at 31st March, 2017 relating to the recoverability of the carrying amount of Property Plant and Equipment of the Company.
(ii) Note 39 to the standalone Ind AS financial statements.
During the financial year ended 31st March, 2017, the Company has incurred a loss (including exceptional items) of RS,6,054.34 crores, and its current liabilities exceed its current assets by RS,12,688.48 crores as at 31st March, 2017. However, for the reasons stated in the note, the standalone Ind AS financial statements are prepared on going concern basis.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. 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 purposes of our audit
(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid standalone Ind AS financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.
(c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the standalone Ind AS financial statements.
(d) In our opinion, the aforesaid standalone Ind AS
financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
(e) The matter described in the Emphasis of Matter paragraph (i) above, in our opinion, may have an adverse effect on the functioning of the Company,
(f) On the basis of the written representations received from the directors of the Company as on 31st March, 2017 taken on record by the Board of Directors of the Company none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.
(g) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate
Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''''s internal financial controls over financial reporting.
(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 its financial position in its 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
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 the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from 8th November 2016 to 30th December 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us.
We have audited the internal financial controls over financial reporting of Adani Power Limited (“the Company”) as of 31st March, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
Management''''s Responsibility for Internal Financial Controls
The Company''''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India”. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective company''''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor''''s Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has maintained, in all material respects, an adequate internal financial control over financial reporting and such internal financial controls over financial reporting were operating effectively as of 31st March, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.
(i) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) Some of the fixed assets were physically verified during the year by the Management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and acquired buildings, are held in the name of the Company as at the balance sheet date.
(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2014, as amended, would apply. Accordingly, paragraph 3(v) of the Order is not applicable to the Company,
(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at 31st March, 2017 for a period of more than six months from the date they became payable.
(viii) In our opinion and according to the information and (c) Details of dues of Income Tax, Service Tax and Customs Duty which have not been deposited as on 31st March, 2017 on account of disputes are given below:
Name of the Statute
|
Nature of Dues
|
Forum where Dispute is Pending
|
Period to which the Amount Relates
|
Amount Involved (RS, in crores)
|
Amount Unpaid (RS, in crores)
|
Finance Act, 1994
|
Service Tax
|
Customs, Excise Service Tax Appellate Tribunal
|
2008-09
|
5.12
|
5.12
|
Customs Act, 1962
|
Custom Duty
|
High Court of Gujarat
|
July, 2015 to February, 2016
|
54.95*
|
54.95
|
Income Tax Act, 1961
|
Income Tax
|
Commissioner Income Tax (Appeals)
|
Assessment Year 2012-13
|
2.32
|
2.32
|
* Pursuant to the Order of the Hon''''ble High Court of Gujarat dated 11th February, 2016, the recovery of this amount has been stayed.
There are no dues of Excise Duty, Sales Tax or Value Added Tax that have not been deposited as at 31st March, 2017 on account of disputes.
explanations given to us, as at the reporting date, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and dues to debenture holders. The Company has not taken any loans from the government.
(ix) In our opinion and according to the information and explanations given to us, money raised by way of term loans have been applied by the Company during the year for the purposes for which they were raised, other than temporary deployment pending application of proceeds. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has not paid any managerial remuneration to its directors, including managing director and whole-time director, and its manager.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of paragraph 3 of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us, the Company has made preferential allotment of shares during the year. In respect of the above issue, we further report that:
(a) the requirement of Section 42 of the Companies Act, 2013, as applicable, have been complied with; and
(b) the amounts raised have been applied by the Company during the year for the purposes for which the funds were raised, other than temporary deployment pending application.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For Deloitte Haskins & Sells
CHARTERED ACCOUNTANTS
Firm''''s Registration No 117365W
Kartikeya Raval
Place: Ahmadabad PARTNER
Date: 27th May, 2017 Membership No. 106189
We have audited the accompanying standalone financial statements of
ADANI POWER LIMITED ("the Company"), which comprise the Balance Sheet
as at 31st March, 2016, the Statement of Profit and Loss and the Cash
Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information
Management''''s Responsibility for the Standalone 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 the accounting principles
generally accepted in India, including the Accounting Standards
prescribed under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
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 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 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 and the Order under section 143 (11) of the Act.
We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing 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 the 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 the 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 qualified audit opinion on the
standalone financial statements.
Basis for Qualified Opinion
We draw attention to Note 32 to the standalone financial statements
regarding the basis on which the Company has continued to recognise
total revenue of Rs.3,619.49 crores on account of Compensatory Tariff
for three years period ended 31st March, 2016 (Rs.919.02 crores and
Rs.857.35 crores recognized during current year and previous year
respectively), which is predicated on the assessment by the Management
that the Company will be able to ultimately recover the equivalent
amount towards impact of the Force Majeure Events pursuant to the order
of the Appellate Tribunal for Electricity dated 7th April 2016, as more
fully described in the said Note.
Since the Central Electricity Regulatory Commission, as directed by the
aforesaid order, is yet to assess the impact of Force Majeure Events
and give such relief as may be available under the Power Purchase
Agreements, appropriateness of continuation of the revenue recognition
for and up to the year, and other consequential effects on the
financial statements, can only be determined on completion of the said
assessment, and final outcome of the litigations.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the matter
described in the Basis for Qualified opinion paragraph above, 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 31st March, 2016, and its
profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. 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
purposes of our audit.
b) Except for the possible effects of the matter described in the Basis
for Qualified Opinion paragraph above, 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, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) Except for the possible effects of the matter described in the Basis
for Qualified Opinion paragraph above, in our opinion, the aforesaid
standalone financial statements comply with the Accounting Standards
prescribed under section 133 of the Act.
e) The matter described in the Basis for Qualified Opinion paragraph
above, in our opinion, may have an adverse effect on the functioning of
the Company.
f) On the basis of the written representations received from the
directors as on 31st March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2016
from being appointed as a director in terms of Section 164 (2) of the
Act.
g) The qualification relating to the maintenance of accounts and other
matters connected therewith are as stated in the Basis for Qualified
Opinion paragraph above.
h) 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 A". Our report
expresses a qualified opinion on the adequacy and operating
effectiveness of the Company''''s internal financial controls over
financial reporting.
i) 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 financial statements.
(ii) Except for the possible effects of the matter described in Basis
for Qualified Opinion paragraph, 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.
(iii) There were no amounts which were required to be transferred to
the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor''''s Report) Order, 2016 ("the
Order") issued by the Central Government in terms of Section 143(11) of
the Act, we give in "Annexure B" a statement on the matters specified
in paragraphs 3 and 4 of the Order.
(Referred to in paragraph 2 under ''''Report on Other Legal and Regulatory
Requirements'''' section of our report of even date)
(i) In respect of fixed assets
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) Some of the fixed assets were physically verified during the year
by the Management in accordance with a programme of verification, which
in our opinion provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification
(c) According to the information and explanations given to us and the
records examined by us and based on the examination of the registered
sale deed / transfer deed / conveyance deed provided to us, we report
that, the title deeds, comprising all the immovable properties of land
and acquired buildings which are freehold, are held in the name of the
Company as at the balance sheet date. In respect of immovable
properties of land that have been taken on lease and disclosed as fixed
asset in the financial statements, the lease agreements are in the name
of the Company, where the Company is the lessee in the agreement.
(ii) As explained to us, the inventories were physically verified
during the year by the Management at reasonable intervals and no
material discrepancies were noticed on physical verification
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or other parties
covered in the register maintained under section 189 of the Companies
Act, 2013
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
185 and 186 of the Companies Act, 2013 in respect of grant of loans,
making investments and providing guarantees and securities, as
applicable.
(v) According to the information and explanations given to us, the
Company has not accepted any deposits from the public to which the
directives issued by the Reserve Bank of India and the provisions of
section 73 to 76 or any other relevant provisions of the Act and the
Companies (Acceptance of Deposit) Rules, 2014, as amended, would apply.
Accordingly, paragraph 3(v) of the Order is not applicable to the
Company.
(vi) The maintenance of cost records has been specified by the Central
Government under section 148(1) of the Companies Act, 2013. We have
broadly reviewed the cost records maintained by the Company pursuant to
the Companies (Cost Records and Audit) Rules, 2014, as amended and
prescribed by the Central Government under sub-section (1) of Section
148 of the Companies Act, 2013, and are of the opinion that, prima
facie, the prescribed cost records have been made and maintained. We
have, however, not made a detailed examination of the cost records with
a view to determine whether they are accurate or complete
(vii) According to the information and explanations given to us, in
respect of statutory dues
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees'''' State Insurance,
income-tax, Sales Tax, Service Tax, Customs Duty Excise Duty, Value
Added Tax, cess and other material statutory dues applicable to it to
the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Employees'''' State insurance, Income-tax, Sales Tax, Service Tax,
Customs Duty, Excise Duty, Value Added Tax, cess and other material
statutory dues in arrears as at 31st March, 2016 for a period of more
than six months from the date they became payable
(c) Details of dues of Income-tax, Service Tax and Custom Duty which
have not been deposited as on 31st March, 2016 on account of disputes
are given below:
Name of Statute Nature of Forum where Dispute is
Dues Pending
Income Tax Act, 1961 Income Tax Income Tax Appellate
Tribunal
Income Tax Act, 1961 Income Tax Commissioner Income Tax
(Appeals)
Finance Act, 1994 Service Tax Customs, Excise Service
Tax Appellate Tribunal
Customs Act, 1962 Custom Duty High Court of Gujarat
Name of Statute Period to which the Amount Involved
Amount Relates (Rs. In crores)
Income Tax Act, 1961 Assessment Year 10.09
2010-11
Income Tax Act, 1961 Assessment Year 22.82*
2011-12
Finance Act, 1994 2008-09 5.11
Customs Act, 1962 July, 2015 to 15th 54.95**
February, 2016
* Net of H14.04 crores adjusted by the tax authorities against refunds
due to the Company.
** Pursuant to the Order of the Hon''''ble High Court of Gujarat dated
11th February, 2016, the recovery of this amount has been stayed.
There are no dues of Sales Tax, Excise Duty or Value Added Tax that
have not been deposited as at 31st March, 2016 on account of disputes.
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of loans or
borrowings to financial institutions, banks and dues to debenture
holders, except as under:
Lender Amount of default
as at the Period of
default as
balance sheet
date at the
balance sheet
(Rs. In crores) date
Bank Of India 49.62 01 day
Deutsche Bank 27.57 01 day
Standard Chartered Bank 33.08 01 day
State Bank Of India 27.57 01 day
The Royal Bank Of Scotland NV 27.57 01 day
The Company has not taken any loans from the Government.
(ix) In our opinion and according to the information and explanations
given to us, money raised by way of term loans have been applied by the
Company during the year for the purposes for which they were raised or
as per purposes revised with appropriate approvals, other than
temporary deployment pending application of proceeds. The Company has
not raised moneys by way of initial public offer or further public
offer (including debt instruments) during the year.
(x) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no fraud on the
Company by its officers or employees has been noticed or reported
during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not paid any managerial remuneration to
its directors, including managing director and whole-time director, and
its manager.
(xii) The Company is not a Nidhi Company and hence reporting under
clause (xii) of paragraph 3 of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is in compliance with Section 188 and 177 of
the Companies Act, 2013, where applicable, for all transactions with
the related parties and the details of related party transactions have
been disclosed in the financial statements etc. as required by the
applicable accounting standards.
(xiv) According to the information and explanations given to us, the
Company has made preferential allotment of shares during the year. In
respect of the issue, we further report that:
(a) the requirement of Section 42 of the Companies Act, 2013, as
applicable, have been complied with; and
(b) the amounts raised have been applied by the Company during the year
for the purposes for which the funds were raised, other than temporary
deployment pending application
(xv) In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any
non-cash transactions with its directors or persons connected with him
and hence provisions of section 192 of the Companies Act, 2013 are not
applicable.
(xvi) The Company is not required to be registered under section 45-I
of the Reserve Bank of India Act, 1934.
For Deloitte Haskins & Sells
Chartered Accountants
(Firm''''s Registration No. 117365W)
(Samir R. Shah)
Place: Ahmedabad (Partner)
Date: 3rd May, 2016 (Membership No. 101708)
We have audited the accompanying standalone financial statements of
ADANI POWER LIMITED ("the Company"), which comprise the Balance Sheet
as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow
Statement, and a summary of the significant accounting policies and
other explanatory information for the year then ended.
Management''s Responsibility for the Standalone 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 the 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 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 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 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
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 financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the 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 operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the 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 qualified audit opinion on the
standalone financial statements.
Basis of qualified opinion
We draw attention to Note 36 to the standalone financial statements
regarding the basis on which the Company has recognized total revenue
of Rs. 2,700.47 crores on account of Compensatory Tariff for two years
period ended 31st March, 2015 (Rs. 1,843.12 crores recognized in the
previous year), and other consequential effects on the financial
statements, notwithstanding pending litigations, as more fully
described in the said Note.
Since the matter relating to Compensatory Tariff is sub-judice,
appropriateness of the recognition of such revenue for and up to the
year, and the other consequential effects on the financial statements,
can only be determined on final outcome of the pending litigations.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the matter
described in the Basis for Qualified Opinion paragraph above, 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 31st March, 2015, and its
loss and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to the Note 39 to the standalone financial statements
with respect to the assessment by the Management of the Company about
recoverability of an advance of Rs. 288.45 crores and the basis for not
recognizing provision for the said amount.
Our opinion is not modified in respect of this matter.
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 Section
143(11) of the Act, we give in the Annexure 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
purposes of our audit.
(b) Except for the possible effects of the matter described in the
Basis of Qualified Opinion paragraph above, 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, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) Except for the possible effects of the matter described in the
Basis of Qualified Opinion paragraph above, 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) The matter described in the Basis for Qualified Opinion paragraph
above, in our opinion, may have an adverse effect on the functioning of
the Company.
(f) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164(2) of the
Act.
(g) The qualification relating to the maintenance of accounts and other
matters connected therewith are as stated in the Basis for Qualified
Opinion paragraph above.
(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, 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 financial statements - Refer Notes
30(l), 33, and 36 to the standalone financial statements.
ii. Except for the possible effects of the matter described in the
Basis of Qualified Opinion paragraph above, 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 Notes 8, 12, and 36 to
the standalone financial statements.
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date)
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) Some of the fixed assets were physically verified during the year
by the Management in accordance with a programme of verification, which
in our opinion provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanations given to us no material discrepancies were noticed on such
verification.
(ii) In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures for physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the Register maintained
under Section 189 of the Act.
(iv) 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 goods and
services and during the course of our audit we have not observed any
major weaknesses in such internal control system.
(v) According to the information and explanations given to us, the
Company has not accepted any deposits from the public to which the
directives issued by the Reserve Bank of India and the provisions of
Section 73 to 76 or any other relevant provisions of the Act and the
Companies (Acceptance of Deposits) Rules, 2014, as amended, would
apply. Accordingly, the provisions of Cause 3(v) of the Order are not
applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended and the Cost Accounting Records (Electricity Industry)
Rules, 2011, prescribed by the Central Government under sub-section (1)
of Section 148 of the Act and are of the opinion that, prima facie, the
prescribed cost records have been made and maintained. We have,
however, not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise
Duty, Value Added Tax, Cess and other material statutory dues
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other
material statutory dues in arrears as at 31st March, 2015 for a period
of more than six months from the date they became payable.
(c) Details of dues of Income Tax, Service Tax and Customs Duty which
have not been deposited as on 31st March, 2015 on account of disputes
are given below:
Forum where
Name of Statute Nature of Dues Dispute is Pending
Income Tax Income Tax Income Tax
Act, 1961 Appellate Tribunal
Income Tax Income Tax Income Tax
Act, 1961 Appellate Tribunal
Income Tax Income Tax Commissioner
Act, 1961 Income Tax (Appeal)
Finance Service Tax Customs, Excise
Act, 1994 Service Tax Appellate
Tribunal
Customs Custom Duty High Court of
Act, 1962 Gujarat
Name of the Statute Period to which the Amount Involved
Amount Relates (Rs In crores)
Income Tax Assessment 0.46
Act, 1961 Year 2008-09
Income Tax Assessment 2.35
Act, 1961 Year 2009-10
Income Tax Assessment 10.09
Act, 1961 Year 2010-11
Finance June 2008 to 5.11
Act, 1994 September 2010
Customs July 2009 to 119.97
Act, 1962 September 2010
There are no dues of Sales Tax, Wealth Tax, Excise Duty, Value Added
Tax and Cess which have not been deposited as on 31st March, 2015 on
account of disputes.
(d) There are no amounts that are due to be transferred to the Investor
Education and Protection Fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and Rules made
thereunder.
(viii) Without considering the possible effects of our audit
qualification reported in the paragraph of the Basis of Qualified
Opinion of our Audit Report, the accumulated losses of the Company at
the end of the financial year are less than fifty percent of its net
worth and the Company has not incurred cash losses during the financial
year covered by our audit and in the immediately preceding financial
year.
(ix) The Company has delayed repayment of two principal instalments
amounting to Rs. 150 crores each by 53 days and 30 days respectively to a
bank during the year. Other than these delays, the Company has not
defaulted in the repayment of dues to financial institutions, banks and
debenture-holders.
(x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks and financial institutions.
(xi) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained, other than
temporary deployment pending application.
(xii) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Samir R. Shah
Place : Ahmedabad Partner
Date : 11th May, 2015 Membership No. 101708
