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Adani Power
BSE: 533096|NSE: ADANIPOWER|ISIN: INE814H01011|SECTOR: Power - Generation & Distribution
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« Mar 14
Auditor's Report (Adani Power) Year End : Mar '15
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
 
Source : Dion Global Solutions Limited
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