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You can view full text of the latest Auditor's Report for the company.

BSE: 533096ISIN: INE814H01011INDUSTRY: Power - Generation/Distribution

BSE   ` 47.80   Open: 48.60   Today's Range 47.50
48.75
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58.20
Year End :2018-03 

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 MarcRs.31, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the 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 Standalone 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 controls 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 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 qualified audit opinion,

Basis for Qualified Opinion

We draw attention to note 40 to the standalone Ind AS financial statements regarding uncertainties relating to realisation of advance consideration paid for purchase of 51% shares of Korba West Power Company Limited (KWCPL), loans given to KWCPL for its operations pending resolution of various matters with its stakeholders including lenders and consideration on sale of 49% shares of KWCPL to a third party during the year, involving total amount of RS.2,403,32 Crores as at MarcRs.31, 2018,

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 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 MarcRs.31, 2018, of its loss including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter We draw attention to:

a. Note 51 to the standalone Ind AS financial statements regarding the accounting treatment of capital reserve followed by the Company, as per the Scheme of Arrangement between the Company and its subsidiary Adani Power (Mundra) Limited, approved by the National Company Law Tribunal during the year , which is not in accordance with the requirements of Ind AS.

b. Note 37 to the standalone Ind AS financial statements regarding uncertainties being faced by Adani Power (Mundra) Limited (APMuL), a wholly owned subsidiary, resulting in APMuL incurring losses and erosion of its entire net worth. The Company has investments and loans and advances aggregating to RS.2,521.35 Crores in APMuL as at MarcRs.31, 2018. In the opinion of the management of the Company, for the reasons described in the aforesaid note, APMuL would be able to establish profitable operations in foreseeable future and continue as a going concern and as such, no adjustments are considered necessary to the carrying value of the aforesaid investments, loans and advances as at the year end.

Our opinion is not modified in respect of these matters. Other Matter

The Ind AS financial statements of the Company for the year ended MarcRs.31, 2017, included in these standalone Ind AS financial statements, have been audited by the predecessor auditor who expressed an unmodified opinion on those statements on May 27, 2017.

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) Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, 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) Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph and also in Note (a) under Emphasis of Matter paragraph, 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) The matters 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 written representations received from the directors as on MarcRs.31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on MarcRs.31, 2018, 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 is 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 dated May 3, 2018 in “Annexure 2” to this report;

(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 Ind AS financial statements -Refer Note 36 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 20 to the standalone Ind AS financial statements;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE1 TO THE INDEPENDENT AUDITOR’S REPORT

Referred to in ParagrapRs.1 of Report on Other Legal and Regulatory Requirements of our report of even date for the year ended MarcRs.31, 2018

(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, the programme of 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 the information and explanations given by the management, the title deeds of immovable properties included in Property, Plant and Equipment are held in the name of the Company, except for freehold land aggregating to RS.1,86 Crores for which the title is in dispute and pending resolution in the Civil Court, Kutch as at MarcRs.31, 2018,

(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) As per the schedule of repayment of principal and interest stipulated for the loan granted as mentioned in clause (a) above, there were no installment of loan and interest due during the year,

(c) Read with our comments in clause (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, provisions of section 185 and 186 of the Companies Act 2013, in respect of loans to directors including the entities in which they are interested and in respect of loans and advances given, investments made and guarantees, and securities given, have been complied with by the Company,

(v) The Company has not accepted any deposits within the meaning of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended), Accordingly, the provisions of clause 3(v) of the Order are not applicable,

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the generation of electricity and are of the opinion that prima facie, the specified accounts and records have been made and maintained, We have not, however, made a detailed examination of the same,

(vii) (a) Undisputed statutory dues including provident fund, income tax, sales tax, service tax, duty of customs, value added tax, goods and service tax, cess and other material statutory dues applicable to it have generally been regularly deposited with the appropriate authorities, The provisions relating to employees’ state insurance and excise duty are not applicable to the Company,

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income-tax, , service tax, sales-tax, duty of custom, value added tax, goods and service tax, cess and other 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

Amount

Period to which the

Forum where dispute is pending

Tax

(Rs. in Crores)

amount relates

Income Tax Act, 1961

Income Tax

10.09#

Assessment Year 2010-11

Income Tax Appelate Tribunal (ITAT)

Income Tax Act, 1961

Income Tax

34.15*

Assessment Year 2011-12

Income Tax Appelate Tribunal (ITAT)

Income Tax Act, 1961

Income Tax

2.32

Assessment Year 2012-13

Commissioner Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

2.76

Assessment Year 2014-15

Commissioner Income Tax (Appeals)

# The department and the Company are in appeal with ITAT against the favourable order of Commissioner of Income Tax (Appeals) for the entire amount.

* The department and the Company have filed appeals with ITAT against the favourable order of Commissioner of Income Tax (Appeals) whereby the demand was reduced to RS.2.17 Crores.

(viii) According to the information and explanations given by the management, the Company has not defaulted in the repayment of loans or borrowings to any banks and financial institutions existing as at the balance sheet date. The Company did not have any loans or borrowing in respect of government or dues to debenture holders during the year.

(ix) In our opinion and according to the information and explanations given by the management, the monies raised by the Company by way of term loans were applied for the purposes for which those were raised. The Company has not raised any monies by way of initial public offer / further public offer during the year.

(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 to us, the Company has not paid any managerial remuneration to its directors, including managing director and whole time directors, and its manager and hence reporting under clause 3(xi) of the Order is not applicable and hence, not commented upon.

(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 sections 177 and 188 of the 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 Raj Agrawal

Partner

Membership Number: 82028

Place of Signature: Ahmedabad

Date: May 3, 2018