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.
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.
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
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
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
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
(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
(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
(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
(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
(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
Income Tax Act, 1961 Income Tax Income Tax Appellate
Income Tax Act, 1961 Income Tax Commissioner Income Tax
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
Income Tax Act, 1961 Assessment Year 22.82*
Finance Act, 1994 2008-09 5.11
Customs Act, 1962 July, 2015 to 15th 54.95**
* 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
date at the
(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
(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
(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
(Firm''s Registration No. 117365W)
(Samir R. Shah)
Place: Ahmedabad (Partner)
Date: 3rd May, 2016 (Membership No. 101708)