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.
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
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.
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
(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
(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
(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
(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:
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
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
(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
(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
(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
(Firm Registration No. 117365W)
Samir R. Shah
Place : Ahmedabad Partner
Date : 11th May, 2015 Membership No. 101708