Report on the Financial Statements
We have audited the accompanying financial statements of ORIENT GREEN
POWER COMPANY LIMITED (the Company), which comprise the Balance Sheet
as at 31 March 2013, 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 Company''s Management 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 referred to in Section 211
(3C) of the Companies Act, 1 956 (the Act) and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
relevanttothe preparation and presentation ofthe financial statements
that give a true and fair view and are free from material
mis-statement, whether due to fraud or error.
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 ofthe financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the mannerso 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 ofthe
Company as at 31 March2013;
(b) in the case of the Statement of Profit and Loss, of the loss of the
Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows ofthe
Company for the year ended on that date.
Emphasis of Matter
The Company has made investments aggregating to Rs.712,51 7,91 8 in
four Indian subsidiary companies and has also provided loans
aggregating to Rs.1,060,911,822 as at 31 March 2013 to these
subsidiaries, whose net worth has been fully / substantially eroded as
at 31 March 2013, as perthe audited financial statements of these
As stated in Note 13(i) of the financial statements, the Company has
carried out an evaluation of the nature of the diminution in the value
of the investments in these subsidiaries taking into account the
expected cash flows based on future business projections and the
Management''s plans for reviving the operations of these subsidiaries.
Based on the same and duly considering the long term nature of these
investments, the nature of the industry, gestation period, etc. the
diminution in the value of the investments is not considered as other
than temporary in nature. Further, the loans are also considered as
good for recovery.
Ouropinion is notqualified in respectoftheabove 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
(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
(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
referred to in Section 211 (3C) of the Act.
(e) On the basis of the written representations received from the
directors as on 31 March 2013 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2013
from being appointed as a director in terms of Section 274(1 )(g) of
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) Having regard to the nature of the Company''s
business/activities/results during the year, clauses 4(xii), 4(xiii),
4(xiv), 4(xviii) and 4(xix) of the Order are not applicable to the
(ii) 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
c. The fixed assets disposed off during the year, in ouropinion, 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.
(iii) In respect of its inventories:
a. As explained to us, the inventories were physically verified by the
Management at reasonable intervals duly considering the technical
assessment of the accredited surveyor.
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
(iv) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(v) 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 with regard to purchases of
inventory and fixed assets and the sale of Power. During the course of
our audit, we have not observed any major weakness in such internal
(vi) According to the information and explanations given to us, there
are no contracts or arrangements, the particulars of which need to be
entered into the Register maintained in pursuance of Section 301 of the
Companies, Act, 1 956.
(vii) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year.
(viii) In our opinion, the internal audit functions carried out during
the year by the Internal Audit Department of the Company have been
commensurate with the size of the Company and the nature of its
(ix) We have broadly reviewed the cost records maintained by the
Company pursuant to the Cost Accounting Records (Electricity Industry)
Rules, 2011 prescribed by the Central Government under Section 209(1
)(d) of the Companies Act, 1 956 and are of the opinion that, prima
facie, the prescribed cost records have been maintained. We have,
however, not made a detailed examination of the cost records with a
view to determine whetherthey are accurate or complete.
(x) According to the information and explanations given to us, in
respect of statutory dues:
a. The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Investor Education and Protection Fund,
Income Tax, Employees'' State Insurance, Wealth Tax, Customs Duty, Cess
and other material statutory dues applicable to it with the appropriate
authorities except for some delays in remittances of Income Tax
deducted at source, Professional Tax, and Service Tax during the year.
b. There were no undisputed amounts payable in respect of Provident
Fund, Employees'' State Insurance, Investor Education and Protection
Fund, Income Tax, Service Tax, Wealth tax, Customs Duty, Cess and other
material statutory dues in arrears as at 31 March 2013 for a period of
more than six months from the date they became payable except for
Income Tax deducted at source amounting to Rs.346,364 and Professional
Tax amounting to Rs.181,577. The entire amount of Income Tax deducted
at source and Rs.53,678 of Professional Tax have been subsequently
remitted by the Company.
c. Details of dues of Income-tax and Electricity Tax which have not
been deposited as on 31 March 2013 on account of disputes are given
Statute Nature of Dues Forum where the
Dispute is pending
Income Tax Income Tax The Commissioner of
Act, 1961 Income tax, Appeals
Tamil Nadu Tax Electricity Tax Honourable Supreme
on Consumption Court of India
& Sale of Electricity
Statute Period to which the Amount involved
amount relates (Rs.)
Income Tax Act 1961 2008-09 138,740
Tamil Nadu Tax on Consumption
& Sale of Electricity
Act, 2003 2012-13 16,643,820
(xi) The accumulated losses of the Company at the end of the financial
year are not more than fifty percent of its net worth. The Company has
incurred cash losses during the current financial year covered by our
audit and in the immediately preceding financial year.
(xii) In our opinion and according to the information and explanations
given to us, the Company has not been regular in repayment of dues to
banks and there have been defaults amounting to 95,710,240 in respect
of principle and interest repayments as at 31 March 2013. Also Refer
Note 11.2 of the financial statements. The Company has not borrowed
from financial institutions and has not issued any debentures during
the current year.
(xiii) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by others from banks are not, prima facie,
prejudicial to the interests of the Company.
(xiv) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained, other than temporary deployment pending
(xv) 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 have, prima
facie, not been used during the yearfor long-term investment.
(xvi) The Management has disclosed the end use of money raised by
public issues in the notes to the financial statements and we have
verified the same.
(xvii) 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
Place: Chennai Partner
Date: 30th May, 2013 (Membership No. 206834)