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Adani Power
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« Mar 13
Auditor's Report (Adani Power) Year End : Mar '14
We have audited the accompanying financial statements of ADANI POWER
 LIMITED (the Company), which comprise the Balance Sheet as at 31st
 March, 2014, 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 Financial Statements
 
 The Management of the Company is responsible for the preparation of
 these 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 Standards notified under the
 Companies Act, 1956 (the Act) (which continue to be applicable in
 respect of Section 133 of the Companies Act, 2013 in terms of General
 Circular 15/2013 dated 13th September, 2013 of the Ministry of
 Corporate Affairs) and in accordance with the accounting principles
 generally accepted in India. This responsibility includes the design,
 implementation and maintenance of internal control 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.
 
 Auditors'' Responsibility
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. 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 control relevant to the
 Company''s preparation and fair presentation of the financial statements
 in order to design audit procedures that are appropriate in the
 circumstances, but not for the purpose of expressing an opinion on the
 effectiveness of the Company''s internal control. An audit also includes
 evaluating the appropriateness of the accounting policies used and the
 reasonableness of the accounting estimates made by the Management, 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.
 
 Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us and read with our comment in the Emphasis of
 Matter paragraph below, the aforesaid 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:
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2014;
 
 (b) in the case of the Statement of Profit and Loss, of the profit of
 the Company for the year ended on that date;
 
 and
 
 (c) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 Emphasis of Matter
 
 We draw attention to Note 38 to the financial statements regarding
 recognition of revenue aggregating Rs. 1,843.12 crore on account of
 Compensatory Tariff consequent to the favorable order of the Central
 Electricity Regulatory Commission (CERC) dated 21st February, 2014,
 based on legal advice obtained by the Management of the Company that
 the CERC order is enforceable as on date and is in operation and that
 the Company has a good arguable case in support of the CERC order with
 respect to the appeals filed by the customers against the said order
 with the Appellate Tribunal For Electricity for the reasons stated in
 the said Note and the assessment by the Management of the Company that
 it would not be unreasonable to expect ultimate collection of the
 amount.
 
 Our opinion is not qualified in respect of this matter.
 
 Report on Other Legal and Regulatory Requirements
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government in terms of Section 227(4A) of
 the Act, we give in the Annexure a statement on the matters specified
 in paragraphs 4 and 5 of the Order.
 
 2.  As required by Section 227(3) of the Act, we report that:
 
 (a) We have 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 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) In our opinion, the Balance Sheet, the Statement of Profit and
 Loss, and the Cash Flow Statement comply with the Accounting Standards
 notified under the Act (which continue to be applicable in respect of
 Section 133 of the Companies Act, 2013 in terms of General Circular
 15/2013 dated 13th September, 2013 of the Ministry of Corporate
 Affairs).
 
 (f) On the basis of the written representations received from the
 directors as on 31st March, 2014 taken on record by the Board of
 Directors, none of the directors is disqualified as on 31st March, 2014
 from being appointed as a director in terms of Section 274(1)(g) of the
 Act.
 
 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)
 
 Having regard to the nature of the Company''s business / activities /
 results during the year, clauses (vi), (xii), (xiii), (xiv), (xix) and
 (xx) of Paragraph 4 of the Order are not applicable to the Company.
 
 (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
 explanation given to us, no material discrepancies were noticed on such
 verification.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (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 of physical verification of inventories
 followed by the Management were 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) In respect of loans, secured or unsecured, granted by the Company
 to companies, firms or other parties covered in the Register maintained
 under Section 301 of the Act, according to the information and
 explanations given to us:
 
 (a) The Company has granted loans aggregating to Rs. 2,454.66 crores to
 five parties during the year. At the year-end, the outstanding balances
 of such loans granted aggregated Rs. 4,165.79 crores (number of parties:
 two)and the maximum amount involved during the year was Rs. 5,441.72
 crores (number of parties: five).
 
 (b) The rate of interest and other terms and conditions of such loans
 are, in our opinion, prima facie not prejudicial to the interest of the
 Company.
 
 (c) The receipts of principal amounts and interest have been regular /
 as per stipulations.
 
 (d) There is no overdue amount in excess of Rs. 1 lakh remaining
 outstanding as at the year-end.  In respect of loans, secured or
 unsecured, taken by the Company from companies, firms or other parties
 covered in the Register maintained under Section 301 of the Act,
 according to the information an explanations given to us:
 
 (e) The Company has taken loans aggregating to Rs. 4,660.13 crores from
 two parties during the year. At the year-end, the outstanding balances
 of such loans taken aggregated Rs. 5,262.05 crores (number of parties:
 two) and the maximum amount involved during the year was Rs. 6,448.32
 crores (number of parties: two)
 
 (f) The rate of interest and other terms and conditions of such loans
 are, in our opinion, prima facie not prejudicial to the interest of the
 Company.
 
 (g) The payments of principal amounts and interest in respect of such
 loans are regular / as per stipulations.
 
 (iv) In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining comparable quotations, there is an
 adequate internal control system commensurate with the size of the
 Company and the nature of its business for the purchases of inventory
 and fixed assets and for the sale of goods and services. During the
 course of our audit we have not observed any major weaknesses in such
 internal control system.
 
 (v) To the best of our knowledge and belief and according to the
 information and explanations given to us, there are no contracts or
 arrangements that needed to be entered in the Register maintained in
 pursuance of Section 301 of the Companies Act, 1956.
 
 (vi) In our opinion, the Company has an adequate internal audit system
 commensurate with the size and the nature of its business.
 
 (vii) We have broadly reviewed the cost records maintained by the
 Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
 and the Cost Accounting Records (Electricity Industry) Rules, 2011
 prescribed by the Central Government under Section 209(1)(d) 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.
 
 (viii)According to the information and explanations given to us, in
 respect of statutory dues:
 
 (a) The Company has been regular in depositing undisputed statutory
 dues, including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
 Tax, Customs Duty, Excise Duty, 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, Investor Education and Protection Fund, Employees'' State
 Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs
 Duty, Excise Duty, Cess and other material statutory dues in arrears as
 at 31st March, 2014 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, 2014 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             Commissioner
 Act, 1961                                   of Income Tax
                                             (Appeals)
 
 Service Tax          Service Tax            Customs Excise
                                             Service Tax
                                             Appellate Tribunal
 
 Customs Act, 1962    Customs Duty           High Court of
                                             Gujart
 
 Name of Statute        Period to which the      Amount Involved
                          Amount Relates          (Rs. In crores)
 
 Income Tax Act, 1961   Assessment                       0.46
                        Year 2008-09
 
 Income Tax Act, 1961   Assessment                       2.35
                        Year 2009-10
 
 Service Tax            June 2008 to                     5.11
                        September 2010
 
 Customs Act, 1962      July 2009 to                   119.97
                        Septembar 2010
 
 According to the information and explanations given to us, there are no
 dues pending to be deposited on account of any dispute in respect of
 Sales Tax, Wealth Tax, Excise Duty and Cess as on 31st March, 2014.
 
 (ix) 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
 incurred cash losses only during the preceding year but has not
 incurred cash losses during the current financial year.
 
 (x) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in the repayment of dues to
 financial institutions and banks. The Company has not issued any
 debentures.
 
 (xi) According to the information and explanations given to us, the
 Company has not given guarantees for loans taken by others from banks
 and financial institutions.
 
 (xii) 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.
 
 (xiii)In our opinion and according to the information and explanations
 given to us, and on an overall examination of the Balance Sheet of the
 Company, we report that funds raised on short-term basis aggregating
 approximately Rs. 4,859.64 crores have been used for long term
 investments.
 
 (xiv)According to the information and explanations given to us, the
 Company has made preferential allotment of shares to a party and a
 company covered in the Register maintained under Section 301 of the Act
 at a price which, in our opinion, is prima facie not prejudicial to the
 interest of the Company.
 
 (xv) 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)
 
 Place : Ahmedabad                      Samir R. Shah
 
 Date : 15th May, 2014                  Partner
 
                                        Membership No. 101708
 
Source : Dion Global Solutions Limited
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