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, 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 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 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 13 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.
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
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 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 31 March 2014;
(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 of the
Company for the year ended on that date.
Emphasis of Matter
As explained in Note 38 of the financial statements, the Company has
made investments aggregating to Rs.879,448,273 (Net of provision) in five
Indian subsidiary companies and has also provided loans aggregating to
Rs.1,831,729,333 as at 31 March, 2014 to these subsidiaries, whose net
worth has been fully eroded as at 31 March, 2014, as per the audited
financial statements of these entities.
In the opinion of the Management, no additional provision/adjustment to
the above is considered necessary in view of the gestation period
required for break even, committed power supply arrangements on hand
and in pipeline, plant condition as assessed by the technical team,
expected higher cash flows based on future business projections and the
strategic nature of these investments.
Our opinion is not qualified in respect of the above 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
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
(e) On the basis of the written representations received from the
directors as on 31 March, 2014 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March, 2014
from being appointed as a director in terms of Section 274(1)(g) of the
(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), and 4(xix) of the Order are not applicable to the Company.
(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 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.
(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) As certified by the Management, 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 and as
certified by the Management, 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, 1956.
(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, 1956 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.
(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 other than certain 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, Investor Education and Protection Fund, Income Tax, Employees''
State Insurance, Service Tax, Wealth tax, Customs Duty, Cess and other
material statutory dues in arrears as at 31 March, 2014 for a period of
six months from the date they became payable except for Professional
Tax amounting to Rs.44,825, which has 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 2014 on account of disputes are
c. Details of dues of Income-tax and Electricity Tax which have not
been deposited as on 31 March 2014 on account of disputes are given
Statute Nature of Dues the amount
Tax Act, Income Tax The
of 2008-09 138,740
1961 Income tax,
Appeals 2009-10* 26,062,510
Nadu Tax on Electricity Tax Honourable 2012-13 and 29,278,213
& Sale Supreme
Court of 2013-14
The amount has been adjusted suo-motu by the Income Tax Department with
the refund for other financial years.
(xi) The accumulated losses of the Company at the end of the financial
year are less 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 were defaults during the year to the extent of
Rs.776,441,423 in respect of principal and interest repayments. Out of
the same, an amount of Rs.573,233,254 has been paid by the Company during
the year. The balance amount of Rs.203,208,169 of principal and interest
is outstanding as at 31 March 2014. Also Refer Note 11(iv) 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 subsidiaries 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 year for long-term investment.
(xvi) During the year, as certified by the Management, the Company has
not made any preferential allotment of shares to the parties and
companies covered in the Register maintained under Section 301 of the
Companies Act, 1956.
(xvii) 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.
(xviii) 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 Deotte Haskns & Ses
(Firm''s Registration No. 008072S)
Place: Chennai Partner
Date: May 28, 2014 Membership No. 206834