Mar 31, 2023
Responsibilities for the Audit of the Standalone Ind AS Financial Statements'' section of our report. We are independent of the Company in accordance with the ''Code of Ethics'' issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone Ind AS financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
The Tata Power Company Limited
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion
We have audited the accompanying standalone Ind AS financial statements of The Tata Power Company Limited ("the Company"), which comprise the Balance sheet as at March 31, 2023, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended ("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 March 31, 2023, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements
Key audit matters |
How our audit addressed the key audit matter |
Management''s assessment of appropriateness of Going Concern assumption (as described in Note 43.4.3 of the standalone Ind >45 financial statements) |
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The Company has current liabilities of '' 18,455.20 crore and current assets of '' 5,589.89 crore as at March 31,2023. Current liabilities exceed current assets as at the year end. Given the nature of its business i.e. contracted long term power supply agreements and composition of cost plus contracts leading to stability of cashflows, the Company uses significant short term borrowings to reduce its borrowing costs. Management has made an assessment of the Company''s ability to continue as a Going Concern as required by Ind AS 1 Presentation of Financial Statements considering all the available information. Going Concern assessment has been identified as a key audit matter considering the significant judgements and estimates involved in the assessment and its dependence upon management''s ability to complete the planned divestments, raising long term capital and / or successful refinancing of certain current financial obligations. |
Our procedures included the following: ⢠Obtaining an understanding of the process which includes approval of annual business plan, raising short term borrowings and review of management reporting; ⢠Discussing with management and assessing the assumptions, judgements and estimates used in developing business plan and cash flow projections having regards to past performance and current emerging business trends affecting the business and industry; ⢠Assessing the consistency of the cashflow projections with our expectations based on our understanding of the Company''s business; ⢠Assessing the Company''s ability to refinance its short-term obligation based on the past trends, credit ratings, analysis of solvency and liquidity ratios and ability to generate cash flows and access to capital; ⢠Assessing the disclosures in the standalone Ind AS financial statements. |
Key audit matters |
How our audit addressed the key audit matter |
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Revenue recognition and accrual of regulatory deferrals (as described in Note 19, Note 31, Note 40(a), (b), (c) and (e) of the standalone Ind AS |
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financial statements) |
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In the regulated generation, transmission and distribution business of |
Our procedures included the following: |
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the Company, tariff is determined by the regulator on cost plus return |
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on equity basis wherein the cost is subject to prudential norms. The Company invoices its customers on the basis of pre-approved tariff which is based on budget and is subject to true up. |
⢠Read the Company''s accounting policies with respect to revenue recognition and accrual of regulatory deferrals and assessing its compliance with Ind AS 114 "Regulatory Deferral Accountsâ and Ind AS 115 "Revenue from Contract with Customersâ; |
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The Company recognizes revenue as the amount invoiced to customers |
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based on pre-approved tariff rates agreed with regulator. As the Company |
⢠Performing test of controls over revenue recognition and |
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is entitled to a fixed return on equity, the difference between the revenue |
accrual of regulatory deferrals through inspection of evidence of |
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recognized and entitlement as per the regulation is recognized as |
performance of these controls; |
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regulatory assets / liabilities. The Company has recognized '' 1,578.01 |
⢠Performing substantive audit procedures including: |
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crore for generation and transmission business and '' 1,913.22 crore for distribution business as accruals as at March 31, 2023. |
o |
Read the executed PPAs with the customer, tariff regulations and tariff orders and evaluating relevant clauses to |
Accruals are determined based on tariff regulations and past tariff orders and are subject to verification and approval by the regulators. Further the costs incurred are subject to prudential checks and prescribed norms. |
understand management''s assessment of the Company''s right vis-a-vis the customers; |
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Significant judgements are made in determining the accruals including |
o |
Evaluating the key assumptions used by the Company by |
interpretation of tariff regulations. |
comparing it with prior years, past precedents and the legal |
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As at March 31, 2023, the total outstanding amount under litigation in |
opinion obtained by the management; |
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relation to the Mumbai Regulatory business is ''1,566.88 crore. |
o |
Considering the independence, objectivity and competence of management''s expert; |
Mundra power plant: The Company sells power to customers in accordance with the long-term Power Purchase Agreement (PPA) entered into with them. |
o |
Assessing management''s evaluation of the likely outcome of the key disputes based on past precedents and / or advice of management''s expert; |
As per the PPA, the Companies entitlement to capacity revenue is dependent on availability declared. Accordingly, the Company accrues capacity revenue based on the actual declared capacity. |
o |
Assessing the impact recognized by the Company in respect of tariff orders received, revenue adjustment on account of actual declared capacity and revenue recognized based on |
During the current year, the Company has supplied power to customers under various arrangements and certain matters under such arrangements are under litigation. As at March 31, 2023, the total |
ongoing discussion in relation to proposed amendments in PPA; |
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outstanding amount under litigation in relation to the Mundra Plant is |
o |
Reading the legal opinion obtained by the management |
'' 1,445.79 crore. |
for assessing the Company''s right with respect to power |
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However, based on management assessment, legal opinion obtained |
supply to customer for the period wherein terms of PPA are |
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for some disputed matters and favourable orders by the Regulatory |
under discussion; |
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Authorities in respect of disputed matters, management believes that |
o |
Assessing the disclosures in accordance with the |
no significant reversal of revenue is expected. |
requirements of Ind AS 114 "Regulatory Deferral Accountsâ |
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Revenue recognition and accrual of regulatory deferrals is a key audit matter considering the significance of the amount, interpretation of clauses in PPA and tariff regulations and significant judgements involved in the determination of revenue and regulatory accruals. |
and Ind AS 115 "Revenue from Contract with Customersâ. |
Key audit matters |
How our audit addressed the key audit matter |
Impairment of assets (as described in Note 5a, 5b and 5c of the standalone Ind AS financial statements) |
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At the end of every reporting period, the Company assesses whether there is any indication that an asset or cash generating unit (CGU) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or CGU. The determination of recoverable amount, being the higher of fair value less costs to sell and value-in-use involves significant estimates, assumptions and judgements of the long-term financial projections. The Company is carrying impairment provision amounting to '' 310.94 crore with respect to Mundra CGU (comprising of Mundra power plant, investment in companies owning coal mines and related infrastructure), '' 552.91 crore for investment in Company owning hydro power plant in Georgia and '' 100.00 crore with respect to a generating unit in Trombay. During the year, as the indication exists, the Company has reassessed its impairment assessment with respect to the specified CGUs and no additional impairment provisions has been created. . Impairment of assets is a key audit matter considering the significance of the carrying value, estimations and the significant judgements involved in the impairment assessment including projected generation, coal prices, exchange rate, energy prices post power purchase agreement period and weighted average cost of capital. |
Our procedures included the following: ⢠Read the Company''s accounting policies with respect to impairment in accordance with Ind AS 36 "Impairment of assetsâ; ⢠Performing test of controls over key financial controls related to accounting, valuation and recoverability of assets through inspection of evidence; ⢠Performing substantive audit procedures including: o Obtaining the management''s impairment assessment; o Evaluating the key assumptions including projected generation, coal prices, exchange rate, energy prices post power purchase agreement period and weighted average cost of capital by comparing them with prior years and external data, where available; o Obtaining and evaluating the sensitivity analysis; ⢠Assessing the disclosures in accordance with the requirements of Ind AS 36 "Impairment of assetsâ |
Other Information
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone Ind AS financial statements and our auditor''s report thereon.
Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance
including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 the 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone Ind AS financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1" 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) In our opinion, proper books of account as required by law have been kept by the Company, in electronic mode on servers physically located in India so far as it appears from our examination of those books except that we were unable to verify the back up of books of accounts maintained in electronic mode for the period from August 5, 2022 to January 12, 2023, as necessary logs in respect of such period are not available with the company as stated in note 51 to the standalone Ind AS financial statements;
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in
Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph (b) above;
(g) With respect to the adequacy of the internal financial controls with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;
(h) In our opinion, the managerial remuneration for the year ended March 31, 2023 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(i) 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, as amended 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 Ind AS financial statements - Refer Note 39 and 40 to the standalone Ind AS financial statements;
ii. 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 Note 11 and 25 to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts,
required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. a) The management has represented that, to the
best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or
entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
As stated in note 21 to the standalone Ind AS financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approvals of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. April 1,2023, reporting under this clause is not applicable.
For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003
per Abhishek Agarwal Partner
Place of Signature: Mumbai Membership Number: 112773
Date: May 4, 2023 UDIN: 23112773BGRIEQ2255
Mar 31, 2022
The Tata Power Company LimitedReport on the Audit of the Standalone Ind AS Financial StatementsOpinion
We have audited the accompanying standalone Ind AS financial statements of The Tata Power Company Limited ("the Company"), which comprise the Balance sheet as at March 31, 2022, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended ("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 March 31, 2022, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s
Responsibilities for the Audit of the Standalone Ind AS Financial Statements'' section of our report. We are independent of the Company in accordance with the ''Code of Ethics'' issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone Ind AS financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2022. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the ''Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements'' section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Management''s assessment of appropriateness of Going Concern assumption (as described in Note 43.4.3 of the standalone ind AS financial statements) |
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The Company has current liabilities of '' 14,472.74 crores and current |
Our procedures included the following: |
assets of '' 7,095.60 crores as at March 31,2022. |
⢠Obtaining an understanding of the process which includes approval |
Current liabilities exceed current assets as at the year end. Given the |
of annual business plan, raising short term borrowings and review |
nature of its business i.e. contracted long term power supply agreements |
of MIS; and testing the internal controls associated with the |
and a significant composition of cost plus contracts leading to significant |
management''s assessment of Going Concern assumption. |
stability of cashflows and profitability, management is confident of refinancing and consider the liquidity risk as low and accordingly, the Company uses significant short term borrowings to reduce its borrowing costs. |
⢠Discussing with management and assessing the assumptions, judgements and estimates used in developing business plan and cash flow projections having regards to past performance and current |
emerging business trends affecting the business and industry. |
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Management has made an assessment of the Company''s ability to continue as a Going Concern as required by Ind AS 1 Presentation of Financial Statements considering all the available information and has concluded that the going concern basis of accounting is appropriate. |
⢠Assessing the Company''s ability to refinance its short term obligation based on the past trends, credit ratings, analysis of solvency and liquidity ratios and ability to generate cash flows and access to capital. |
Going Concern assessment has been identified as a key audit matter considering the significant judgements and estimates involved in the assessment and its dependence upon management''s ability to complete the planned divestments, raising long term capital and / or successful refinancing of certain current financial obligations. |
⢠Assessing the adequacy of the disclosures in the standalone Ind AS financial statements. |
Key audit matters |
How our audit addressed the key audit matter |
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Revenue recognition and accrual of regulatory deferrals (as described in Note 19 and Note 31 of the standalone ind /AS financial statements) |
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In the regulated generation, transmission and distribution business of |
Our procedures included the following: |
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the Company, tariff is determined by the regulator on cost plus return |
⢠Read the Company''s accounting policies with respect to revenue |
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on equity basis wherein the cost is subject to prudential norms. The |
recognition and accrual of regulatory deferrals and assessing its |
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Company invoices its customers on the basis of pre-approved tariff which |
compliance with Ind AS 114 "Regulatory Deferral Accountsâ and Ind |
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is based on budget and is subject to true up. |
AS 115 "Revenue from Contract with Customersâ. |
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The Company recognizes revenue as the amount invoiced to customers |
⢠Performing test of controls over revenue recognition and accrual of |
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based on pre-approved tariff rates agreed with regulator. As the Company |
regulatory deferrals through inspection of evidence of performance |
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is entitled to a fixed return on equity, the difference between the revenue |
of these controls. |
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recognized and entitlement as per the regulation is recognized as |
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regulatory assets / liabilities. The Company has recognized '' 1,368.05 |
⢠Performing substantive audit procedures including: |
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crores for generation and transmission business and '' 725.92 crores for |
o |
Read the executed PPAs with the customer, tariff regulations |
distribution business as accruals as at March 31, 2022. |
and tariff orders and evaluating relevant clauses to understand |
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Accruals are determined based on tariff regulations and past tariff orders |
management''s assessment of the Company''s right vis-a-vis the |
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and are subject to verification and approval by the regulators. Further the |
customers. |
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costs incurred are subject to prudential checks and prescribed norms. |
o |
Evaluating the key assumptions used by the Company by |
Significant judgements are made in determining the accruals including |
comparing it with prior years, past precedents and the legal |
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interpretation of tariff regulations. Further certain disallowances of claims |
opinion obtained by the management. |
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have been litigated by the Company which are in various stages of dispute. |
o |
Considering the independence, objectivity and competence of |
Mundra power plant: |
management''s expert. |
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The Company sells power to customers in accordance with the long-term Power Purchase Agreement (PPA) entered into with them. |
o |
Assessing management''s evaluation of the likely outcome of the key disputes based on past precedents and / or advice of management''s expert. |
As per the PPA, the Company''s entitlement to capacity revenue is dependent on availability declared. Accordingly, the Company accrues capacity revenue based on the actual declared capacity. As per PPA, Company is required to pay compensation to customers in case the declared capacity is lower than the minimum capacity to be declared |
o |
Assessing the impact recognized by the Company in respect of tariff orders received, revenue adjustment on account of actual declared capacity and revenue recognized based on ongoing discussion in relation to proposed amendments in PPA. |
as per PPA. Based on the actual capacity declared, management has |
o |
Reading the legal opinion obtained by the management for |
recognized an amount of '' 509.55 crores as a reduction in revenue which |
assessing the Company''s right with respect to power supply |
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includes '' 123.27 crores relating to earlier years and compensation |
to customer for the period wherein terms of PPA are under |
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towards lower annual availability. |
discussion. |
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Also, Company is in discussion to amend certain terms of PPA with |
o |
Assessing the disclosures in accordance with the requirements |
one of the customers. The discussions are at very advanced stage and |
of Ind AS 114 "Regulatory Deferral Accountsâ and Ind AS 115 |
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agreement is reached except few items. for which discussions are ongoing and accordingly the SPPA is yet to be signed and approved. To ensure continuous supply of power, customer has requested the Company to continue supplying power based on the proposed amendments which will be effective January 1,2022. Accordingly, based on the legal opinion obtained, the differential revenue of ? 324.00 crores has been recognized on the basis of the current agreed draft of SPPA. |
"Revenue from Contract with Customersâ. |
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Revenue recognition and accrual of regulatory deferrals is a key audit matter considering the significance of the amount, interpretation of clauses in PPA and tariff regulations and significant judgements involved in the determination of revenue and regulatory accruals. |
Key audit matters |
How our audit addressed the key audit matter |
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Recognition and Measurement of Deferred Tax (as described in Note 36 of the standalone ind /AS financial statements) |
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The Company has recognized deferred tax assets of '' 100 crores on |
Our |
procedures included the following: |
unabsorbed depreciation. |
⢠|
Read Company''s accounting policies with respect to recognition and |
During the year, National Company Law Tribunal (''NCLT'') has approved |
measurement of tax balances in accordance with Ind AS 12 "Income |
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the composite scheme of arrangement between the Company and |
Taxesâ |
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Coastal Gujarat Power Limited (''CGPL'') with the Appointed date as |
⢠|
Performing test of controls over recognition and measurement of tax |
April 1, 2020. Accordingly, the Company has reassessed tax provisions |
balances through inspection of evidence of performance of these |
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recognized by the Company since the effective date of merger and recoverability of unabsorbed depreciation and brought forward business lossess of CGPL available for utilization against Company''s future |
⢠|
controls. Performing substantive audit procedures including: |
profit. Basis the assessment, Company has reversed the tax provision |
o Involving tax specialists who evaluates the Company''s tax |
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amounting to '' 105.11 crores and has recognized the deferred tax |
positions basis the tax law and also by comparing it with prior |
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assets on unabsorbed depreciation amounting to '' 968.56 crores in the |
years and past precedents |
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statement of profit and loss. |
o Discussing the future business plans and financial projections |
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The recognition and measurement of deferred tax balances; is a key |
with the management |
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audit matter considering the significance of the amount, judgement |
o Assessing the management''s long-term financial projections and |
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involved in assessing the recoverability of such tax credits, estimation |
the key assumptions used in the projections by comparing it to |
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of the financial projections for utilization of unabsorbed depreciation |
the approved business plan and projections used for impairment |
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and judgements involved in the interpretation of tax regulations and tax |
assessment where applicable. |
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positions adopted by the Company. |
⢠|
Assessing the disclosures in accordance with the requirements of Ind AS 12 "Income Taxes". |
Impairment of assets (as described in Note 5a, 5b and 5c of the standalone ind AS financial statements) |
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At the end of every reporting period, the Company assesses whether |
Our |
procedures included the following: |
there is any indication that an asset or cash generating unit (CGU) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or CGU. |
⢠|
Read the Company''s accounting policies with respect to impairment in accordance with Ind AS 36 "Impairment of assets" |
The determination of recoverable amount, being the higher of fair value less costs to sell and value-in-use involves significant estimates, assumptions and judgements of the long-term financial projections. |
⢠|
Performing test of controls over key financial controls related to accounting, valuation and recoverability of assets through inspection of evidence. |
⢠|
Performing substantive audit procedures including: |
|
The Company is carrying impairment provision amounting to '' 310.94 crores with respect to Mundra CGU (comprising of Mundra power plant, |
o Obtaining the management''s impairment assessment |
|
investment in companies owning coal mines and related infrastructure), |
o Evaluating the key assumptions including projected generation, |
|
'' 552.91 crores for investment in Company owning hydro power plant in |
coal prices, exchange rate, energy prices post power purchase |
|
Georgia and '' 100 crores with respect to a generating unit in Trombay. |
agreement period and weighted average cost of capital by |
|
During the year, as the indication exists, the Company has reassessed |
comparing them with prior years and external data, where |
|
its impairment assessment with respect to the specified CGUs and has |
available. |
|
recognized additional impairment provision of '' 106.82 crores towards investment in Company owning hydro power plant in Georgia. |
o Obtaining and evaluating the sensitivity analysis |
|
⢠|
Assessing the disclosures in accordance with the requirements of Ind |
|
Impairment of assets is a key audit matter considering the significance of the carrying value, estimations and the significant judgements involved in the impairment assessment including projected generation, coal prices, exchange rate, energy prices post power purchase agreement period and weighted average cost of capital. |
AS 36 "Impairment of assets". |
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone Ind AS financial statements and our auditor''s report thereon.
Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 the 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone Ind AS financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1" 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) 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 including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with
Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2022 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(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, as amended 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 Ind AS financial statements - Refer Note 39 to the standalone Ind AS financial statements;
ii. 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 Note 11 and Note 25 to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
iv. a) The management has represented that, to the best of
its knowledge and belief, other than as disclosed in the note 9 to the standalone Ind AS financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under subclause (a) and (b) contain any material misstatement.
v. The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
As stated in note 21 to the standalone Ind AS financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
Chartered Accountants ICAI Firm Registration Number: 324982E/E300003
Partner
Place of Signature: Mumbai Membership Number: 112773
Date: May 6, 2022 UDIN: 22112773AINAVY3679
Mar 31, 2021
To the Members of
The Tata Power Company Limited
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion
We have audited the accompanying standalone Ind AS financial statements of The Tata Power Company Limited ("the Company"), which comprise the Balance sheet as at March 31, 2021, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended ("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 March 31, 2021, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial
Statements'' section of our report. We are independent of the Company in accordance with the ''Code of Ethics'' issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone Ind AS financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2021. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the ''Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements'' section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Management''s assessment of appropriateness of Goina Concern assumption (as described in Note 42.4.3 of the standalone |
|
Ind/AS financial statements) |
|
The Company has current liabilities of Rs. 10,434.06 crores and current assets of Rs. 3,874.50 crores as at March 31, 2021. Current liabilities exceed current assets as at the year end. Given the nature of its business i.e. contracted long term power supply agreements and a significant composition of cost plus contracts leading to significant stability of cashflows and profitability, management is confident of refinancing and consider the liquidity risk as low and accordingly, the Company uses significant short term borrowings to reduce its borrowing costs. Management has made an assessment of the Company''s ability to continue as a Going Concern as required by Ind AS 1 Presentation of Financial Statements considering all the available information and has concluded that the going concern basis of accounting is appropriate. Going Concern assessment has been identified as a key audit matter considering the significant judgements and estimates involved in the assessment and its dependence upon management''s ability to complete the planned divestments, raising long term capital and / or successful refinancing of certain current financial obligations. |
Our procedures included the following: ⢠Obtained an understanding of the process and tested the internal controls associated with the management''s assessment of Going Concern assumption. ⢠Discussed with management and assessed the assumptions, judgements and estimates used in developing business plan and cash flow projections having regards to past performance and current emerging business trends affecting the business and industry. ⢠Assessed the Company''s ability to refinance its short term obligation based on the past trends, credit ratings, analysis of solvency and liquidity ratios and ability to generate cash flows and access to capital. ⢠Assessed the adequacy of the disclosures in the standalone Ind AS financial statements. |
Revenue recognition and accrual of regulatory deferrals (as described in Note 19 and Note 30 of the standalone Ind AS |
|
financial statements) |
|
In the regulated generation, transmission and distribution business of the Company, the tariff is determined by the regulator on cost plus return on equity basis wherein the cost is subject to prudential norms. The Company invoices its customers on the basis of pre-approved tariff which is based on budget and is subject to true up. The Company recognizes revenue as the amount invoiced to customers based on pre-approved tariff rates agreed with regulator. As the Company is entitled to a fixed return on equity, the difference between the revenue recognized and entitlement as per the regulation is recognized as regulatory assets / liabilities. The Company has recognized Rs. 1,148.45 crore for generation and transmission business and Rs. 573.60 crore for distribution business as accruals as at March 31,2021. Accruals are determined based on tariff regulations and past tariff orders and are subject to verification and approval by the regulators. Further the costs incurred are subject to prudential checks and prescribed norms. Significant judgements are made in determining the accruals including interpretation of tariff regulations. Further certain disallowances of claims have been litigated by the Company which are in various stages of dispute. Revenue recognition and accrual of regulatory deferrals is a key audit matter considering the significance of the amount and significant judgements involved in the determination. |
Our procedures included the following: ⢠Read the Company''s accounting policies with respect to accrual ofregulatory deferrals and assessed its compliance with Ind AS 114 "Regulatory Deferral Accounts" and Ind AS 115 "Revenue from Contract with Customers". ⢠Performed test of controls over revenue recognition and accrual of regulatory deferrals through inspection of evidence of performance of these controls. ⢠Performed substantive audit procedures including: o Evaluated the key assumptions used by the Company by comparing it with prior years, past precedents and the opinion of management''s expert. o Considered the independence, objectivity and competence of management''s expert. o Assessed management''s evaluation of the likely outcome of the key disputes based on past precedents and / or advice of management''s expert. o Assessed the impact recognized by the Company In respect of tariff orders received. o Assessed the disclosures in accordance with the requirements of Ind AS 114 "Regulatory Deferral Accounts" and Ind AS 115 "Revenue from Contract with Customers". |
Recognition and Measurement of Deferred Tax (as described in Note 35 of the standalone Ind AS financial statements) |
|
The Company has recognized Minimum Alternate Tax (MAT) |
Our procedures included the following: |
credit receivable of Rs. 437.51 crores as at March 31, 2021. |
⢠Read Company''s accounting policies with respect |
The Company also has recognized deferred tax assets of |
to recognition and measurement of tax balances in |
Rs. 492.56 crores on long term capital loss on sale of investments. |
accordance with Ind AS 12 "Income Taxes" ⢠Performed test of controls over recognition and |
Further, pursuant to the Taxation Laws (Amendment) Act, 2019 |
measurement of tax balances through inspection of |
(new tax regime), the Company has measured its deferred tax balances expected to reverse after the likely transition to new |
evidence of performance of these controls. |
tax regime, at the rate specified in the new tax regime. |
⢠Performed substantive audit procedures including: o Involved tax specialists who evaluated the |
The recognition and measurement of MAT credit receivable |
Company''s tax positions basis the tax law and also |
and deferred tax balances; is a key audit matter considering the significance of the amount, judgement involved in |
by comparing it with prior years and past precedents |
assessing the recoverability of such credits, estimation of |
o Discussed the future business plans and financial |
the financial projections for determination of the year of |
projections with the management |
transition to new tax regime and judgements involved in the |
o Assessed the management''s long-term financial |
interpretation of tax regulations and tax positions adopted |
projections and the key assumptions used in the |
by the Company. |
projections by comparing it to the approved business plan, projections used for estimation of likely year of transition to the new tax regime and projections used for impairment assessment where applicable. ⢠Assessed the disclosures in accordance with the requirements of Ind AS 12 "Income Taxes". |
Impairment of assets (as described in Note 5 and Note 7 of the standalone Ind AS financial statements) |
|
At the end of every reporting period, the Company assesses whether there is any indication that an asset or cash generating unit (CGU) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or CGU. |
Our procedures included the following: ⢠Read the Company''s accounting policies with respect to impairment in accordance with Ind AS 36 "Impairment of assets" |
The determination of recoverable amount, being the higher |
⢠Performed test of controls over key financial controls |
of fair value less costs to sell and value-in-use involves |
related to accounting, valuation and recoverability of |
significant estimates, assumptions and judgements of the |
assets through inspection of evidence. |
long-term financial projections. |
⢠Performed substantive audit procedures including: |
The Company is carrying impairment provision amounting to |
o Obtained the management''s impairment assessment |
Rs. 3,555.00 crores with respect to Mundra CGU (comprising of investment in companies owning Mundra power plant, |
o Evaluated the key assumptions including projected |
coal mines and related infrastructure), Rs. 446.09 crores |
generation, coal prices, exchange rate, energy |
for investment in Company owning hydro power plant in |
prices post power purchase agreement period and |
Georgia and Rs. 100 crores with respect to a generating unit |
weighted average cost of capital by comparing them |
in Trombay. During the year, as the indication exists, the |
with prior years and external data, where available. |
Company has reassessed its impairment assessment with respect to the specified CGUs. |
o Obtained and evaluated the sensitivity analysis |
⢠Assessed the disclosures in accordance with the |
|
Impairment of assets is a key audit matter considering the significance of the carrying value, estimations and the significant judgements involved in the impairment assessment. |
requirements of Ind AS 36 "Impairment of assets". |
Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone Ind AS financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause
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The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone Ind AS financial statements and our auditor''s report thereon.
Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 the 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
⢠Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2021 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1" 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) 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 including the statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the
(e) On the basis of the written representations received from the directors as on March 31, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2021 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(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, as amended 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 Ind AS financial statements - Refer Note 38 to the standalone Ind AS financial statements;
ii. 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 Note 24 to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003
per Abhishek Agarwal Partner
Mumbai Membership Number: 112773
Date: May 12, 2021 UDIN: 21112773AAAADG2459
Mar 31, 2019
Report on the Audit of the Standalone Ind AS Financial Statements Opinion
We have audited the accompanying standalone Ind AS financial statements of The Tata Power Company Limited (âthe Companyâ), which comprise the Balance sheet as at March 31, 2019, the Statement of Profit and Loss, including Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended (âthe Actâ) 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 March 31, 2019, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Standalone Ind AS Financial Statementsâ section of our report. We are independent of the Company in accordance with the âCode of Ethicsâ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditorâs responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Accrual of Regulatory Deferrals (as described in Note 20 of the financial statements) |
|
In the power distribution business of the Company, the tariff is determined by the regulator on cost plus return on equity basis wherein the cost is subject to prudential norms. The Company invoices its customers on the basis of pre-approved tariff which is based on budget and is subject to true ups to be adjusted in the future tariff. The Company recognizes revenue on the basis of tariff invoiced to consumers. As the Company is entitled to a fixed return on equity, the Company recognizes regulatory deferral for the shortage / excess compared to the entitled return on equity. The Company has recognized regulatory deferrals of Rs. 999 crore as at March 31, 2019. |
- Our audit procedures included considering the Companyâs accounting policies with respect to accrual of regulatory deferrals and assessing compliance with Ind AS 114 âRegulatory Deferral Accountsâ - We performed test of controls over accrual of regulatory deferrals through inspection of evidence of performance of these controls. |
Regulatory deferrals are determined based on tariff regulations and past tariff orders and are subject to verification and approval by the regulators. Further the costs incurred are subject to prudential checks and prescribed norms. Significant judgements are made in determining the regulatory deferrals including interpretation of tariff regulations. Further certain disallowances of claims have been challenged by the Company before higher authorities. Accrual of regulatory deferrals is a key audit matter considering the significance of the amount of regulatory deferrals and the significant judgements involved in the determination of accruals. |
- We performed the following tests of details: - Evaluated the key assumptions used by the Company by comparing it with prior years, past precedents and the opinion of managementâs expert. - Considered the independence, objectivity and competence of managementâs expert. - For tariff orders received by the Company, we have assessed the impact recognized by the Company and for matters challenged by the Company, we have also assessed the managementâs evaluation of the likely outcome of the dispute based on past precedents and / or advice of managementâs expert. - We have assessed the disclosures in accordance with the requirements of Ind AS 114 âRegulatory Deferral Accountsâ. |
Recognition of tax credits (as described in Note 35 of the financial statements) |
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The Company has recognized Minimum Alternate Tax (MAT) credit receivable of Rs. 517.51 crore and unrecognized MAT credit receivable of Rs. 149.19 crore as at 31st March 2019. The Company also has unrecognized other deferred tax assets of Rs. 306.94 crore on provision for diminution in value of investment classified as asset held for sale. The recognition of MAT credit and deferred tax assets (together referred to as âtax creditsâ hereinafter) is a key audit matter as the recoverability of such tax credits within the allowed time frame involves significant estimate of the financial projections, availability of sufficient taxable income in the future and significant judgements in the interpretation of tax regulations and tax positions adopted by the Company. |
- Our audit procedures included considering Companyâs accounting policies with respect to recognition of tax credits in accordance with Ind AS 12 âIncome Taxesâ - We performed test of controls over recognition of tax credits through inspection of evidence of performance of these controls. - We performed the following tests of details: - We involved our tax specialists who evaluated the Companyâs tax positions by comparing it with prior years and past precedents. - We discussed the future business plans and financial projections with the Company. - We assessed the managementâs long term financial projections and the key assumptions used in the projections by comparing it to the approved business plan and projections used for impairment assessment where applicable. - We have assessed the disclosures in accordance with the requirements of Ind AS 12 âIncome Taxesâ. |
Impairment of Assets (as described in Note 5 and 8 of the financial statements) |
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At the end of every reporting period, the Company assesses whether there is any indication that an asset or cash generating unit (CGU) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or CGU. The determination of recoverable amount, being the higher of fair value less costs to sell and value-in-use involves significant estimates, assumptions and judgements of the long term financial projections. During the earlier years, the Company has recognized impairment provision with respect to Mundra CGU (including coal mines and related infrastructure), hydro power plant in Georgia and a generating unit in Trombay. During the year, as the indication exists, the Company has reassessed its impairment assessment with respect to the specified CGUs. Impairment of assets is a key audit matter considering the significance of the carrying value, long term estimation and the significant judgements involved in the impairment assessment. |
- Our audit procedures included considering the Companyâs accounting policies with respect to impairment in accordance with Ind AS 36 âImpairment of assetsâ - We performed test of controls over impairment process through inspection of evidence of performance of these controls. - We performed the following tests of details: - We obtained the managementâs impairment assessment. - We evaluated the key assumptions including projected generation, coal prices, exchange rate, energy prices post power purchase agreement period and weighted average cost of capital by comparing them with prior years and external data, where available. - We have obtained and evaluated the sensitivity analysis. - We assessed the disclosures in accordance with Ind AS 36 âImpairment of assetsâ |
Related party transactions (as described in Note 19 and 41 of the standalone Ind /AS financial statements) |
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During the year, the Company has sold its investments in shares of Tata Communications Limited and Panatone Finvest Limited to Tata Sons Private Limited for a total consideration of Rs. 1,542.61 crore and Rs. 613.49 crore respectively. Further, during the previous year, the Board of Directors of the Company had approved sale of its Strategic Engineering Division (SED) to Tata Advanced Systems Limited, a wholly owned subsidiary of Tata Sons Private Limited at an enterprise valuation of â2,230 crore (including â1,190 crore contingent upon achieving certain milestones). The transaction is subject to regulatory and necessary approvals. Determination of transaction price for such related party transactions outside the normal course of business is a key audit matter considering the significance of the transaction value and the significant judgements involved in determining the transaction value. |
- Our audit procedures included considering the compliance with the various requirements for entering in to such related party transactions. - We performed test of controls over related party transactions through inspection of evidence of performance of these controls. - We performed the following tests of details: - We have read the valuation reports and fairness opinion obtained from independent valuers and assessed the objectivity and competence of the independent valuers. - We have read the approvals obtained from Audit Committee, Board of Directors, Shareholders and all other regulatory approvals for the transactions. - We have assessed the disclosures in accordance with Ind AS 24 âRelated Party Disclosuresâ. |
Other Information
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone Ind AS financial statements and our auditorâs report thereon.
Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 the 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2019 and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â 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) 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 including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid / provided by the Company to its directors is in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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 Ind AS financial statements - Refer Note 38 to the standalone Ind AS financial statements;
ii. 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 Note 25 to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure 1 to the Independent Auditorâs Report referred to in paragraph 1 under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date on the standalone Ind AS financial statements of The Tata Power Company Limited
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company, except for:
a. immovable properties aggregating to Rs. 0.88 crore acquired during merger of Chemical Terminal Trombay Limited in the previous year for which registration of title of deeds is in progress;
b. immovable properties aggregating to Rs. 26.54 crore acquired in earlier years for which registration of title of deeds is in progress;
c. immovable properties aggregating to Rs. 27.57 crore for which the title deed is in dispute and pending resolution as at March 31, 2019;
Further registration of title deed is in progress in respect of leasehold land classified under Asset held for sale aggregating to Rs. 215.56 crore (Gross value Rs. 225.65 crore).
According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are pledged with the banks and not available with the Company as described in note 23 and 28 of financials statements. The same has not been independently confirmed by the bank and hence we are unable to comment on the same.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted loans to fourteen companies covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the Companyâs interest.
(b) The Company has granted loans to fourteen companies covered in the register maintained under section 189 of the Companies Act, 2013. The schedule of repayment of principal and payment of interest has been stipulated for the loans granted and the repayment/receipts are regular.
(c) There are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Companies Act 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made, guarantees and securities given have been complied with by the Company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal, Reserve Bank of India or any Court or any other Tribunal.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to generation of electricity and arms and ammunitions, electricals or electronic machinery and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) According to the information and explanations given to us in respect of statutory dues:
(a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, duty of custom, goods and service tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income tax, service tax, sales tax, custom duty, excise duty, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues of income tax, sales tax, service tax, custom duty, excise duty, value added tax and cess on account of any dispute are as follows:
Name of statute |
Nature of the Dues |
Amount (Rs. crores) |
Period to which the amount relates |
Forum where the dispute is pending |
The Customs Act, 1962 |
Customs Duty |
34.43 |
2011-12 and 2012-13 |
Tribunal |
3.60 |
2004-05 to 2005-06 |
Tribunal |
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1.37 |
2004-05 to 2005-06 and 2009-10 |
Principal Commissioner |
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Maharashtra Tax on the Entry of Goods into Local Areas Act, 2002 |
Entry tax |
709.17 |
2005-06 and 2008-09 |
Supreme Court |
1,000.22 |
2006-07, 2007-08, 2010-11, 2011-12 |
Tribunal |
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325.79 |
2009-10, 2012-13 and 2013-14 |
Joint Commissioner Appeal |
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The Central Excise Act, 1944 |
Excise Duty |
0.81 |
1993-94 to 1995-96 |
Tribunal |
The Water (Prevention & Control of Pollution) Cess Act 1977 |
Cess |
1.13 |
2009-10 |
Chairman, Maharashtra Pollution Control Board (MPCB) |
The Finance Act, 1994 |
Service Tax |
375.29 |
July 2012 to June 2017 |
High Court |
5.86 |
2011-12 to 2014-15 |
Tribunal |
||
0.25 |
2007-08 |
Joint Commissioner appeal |
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank or government or dues to debenture holders.
(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of debt instruments in the nature of debentures and term loans for the purposes for which they were raised. According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer or further public offer.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a Nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure 2 to the Independent Auditorâs Report of even date on the Standalone Ind AS Financial Statements of the Tata Power Company Limited Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of The Tata Power Company Limited (âthe Companyâ) as of March 31, 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these standalone financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these standalone financial statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial Statements
A companyâs internal financial control over financial reporting with reference to these standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting with reference to these standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting With Reference to these Standalone Financial Statements
Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these standalone Ind AS financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Sudhir Soni
Partner
Membership Number: 41870
UDIN: 19041870AAAAAJ8566
Place : Mumbai
Date : 2nd May, 2019
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of The Tata Power Company Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safe guarding of 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS 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 of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS 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, 2018, its loss including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matters
The Ind AS financial statements of the Company for the year ended 31st March, 2017, included in these standalone Ind AS financial statements, have been audited by the predecessor auditor who expressed a modified opinion on those statements on 19th May, 2017.
We audited the adjustments, as fully described in Note 43 to the standalone Ind AS financial statements, which have been made to the comparative standalone Ind AS financial statements presented for the years prior to year ended 31st March, 2018. In our opinion, such adjustments are appropriate and have been properly applied.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â 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 purpose 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, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on 31st March, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018, from being appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) With respect to the other matters to be included in the Auditorâs 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 Ind AS financial statements - Refer Note 23 & Note 37 to the standalone Ind AS financial statements;
ii. 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 Note 23 & 24 to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure 1 to the Independent Auditorâs Report referred to in paragraph 1 under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date on the standalone Ind AS financial statements of The Tata Power Company Limited
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company, except for:
a. immovable properties aggregating to Rs.0.88 crore acquired during merger of Chemical Terminal Trombay Limited in the current year for which registration of title of deeds is in progress;
b. immovable properties aggregating to Rs.27.32 crore acquired in earlier years for which registration of title of deeds is in progress;
c. land aggregating to Rs.217.92 crore (Gross value Rs.225.65 crore), taken on lease for which registration of title of deeds is in progress;
d. immovable properties aggregating to Rs.27.57 crore for which the title deed is in dispute and pending resolution as at 31st March, 2018;
According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are pledged with the banks and not available with the Company as described in note 22 and 27 of financials statements. The same has not been independently confirmed by the bank and hence we are unable to comment on the same.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted loans to five companies covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the Companyâs interest.
(b) The Company has granted loans to five companies covered in the register maintained under section 189 of the Companies Act, 2013. The schedule of repayment of principal and payment of interest has been stipulated for the loans granted and the repayment/receipts are regular.
(c) There are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Companies Act 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made, guarantees and securities given have been complied with by the Company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal, Reserve Bank of India or any Court or any other Tribunal.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to generation of electricity and arms and ammunitions, electricals or electronic machinery and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) According to the information and explanations given to us in respect of statutory dues:
(a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income tax, service tax, sales tax, custom duty, excise duty, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues of income tax, sales tax, service tax, custom duty, excise duty, value added tax and cess on account of any dispute are as follows:
Name of statute |
Nature of the Dues |
Amount (Rs. crore) |
Period to which the amount relates |
Forum where the dispute is pending |
The Customs Act, 1962 |
Customs Duty |
34.43 |
2011-12 and 2012-13 |
Tribunal |
The Customs Act, 1962 |
3.60 |
2004-05 to 2005-06 |
Tribunal |
|
The Customs Act, 1962 |
1.37 |
2004-05 to 2005-06 and 2009-10 |
Principal Commissioner |
|
Maharashtra Tax on the Entry of Goods into Local Areas Act, 2002 |
Entry Tax |
709.17 |
2005-06 and 2008-09 |
Supreme Court |
1,000.22 |
2006-07, 2007-08, 2010-11, 2011-12 |
Tribunal |
||
325.79 |
2009-10, 2012-13 & 2013-14 |
Joint Commissioner appeal |
||
The Central Excise Act, 1944 |
Excise Duty |
0.81 |
1993-94 to 1995-96 |
Tribunal |
The Water (Prevention & Control of Pollution) Cess Act 1977 |
Cess |
1.13 |
2009-10 |
Chairman, Maharashtra Pollution Control Board (MPCB) |
The Finance Act, 1994 |
Service Tax |
375.29 |
July 2012 to June 2017 |
High Court |
5.86 |
2011-12 to 2014-15 |
Tribunal |
||
0.25 |
2007-08 |
Joint Commissioner appeal |
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank or government or dues to debenture holders.
(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of debt instruments in the nature of debentures and term loans for the purposes for which they were raised. According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer or further public offer.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a Nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Sudhir Soni
Partner
Membership Number: 41870
Place: Mumbai
Date: 2nd May, 2018
Mar 31, 2017
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of THE TATA POWER COMPANY LIMITED (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2017, and the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.
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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
In conducting 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 of the standalone Ind AS financial statements 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 Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence obtained by us, is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone Ind AS financial statements.
Basis for Qualified Opinion
As described in Note 34 (b) and (c) to the standalone Ind AS financial statements, the fair value of unquoted equity shares of Tata Teleservices Limited (TTSL) has not been determined as at 31st March, 2017. We are, therefore, unable to comment on whether the carrying value of:
a) Investments in TTSL of Rs.384.88 crore represents the fair value of such investments as at 31st March, 2017 and the consequent impact thereof on Other Comprehensive Income, and
b) âOther advanceâ, which represent TTSL shares receivable from DoCoMo under a contractual obligation of Rs.138.55 crore as at 31st March, 2017 represents the fair value of such shares and the consequent impact thereof on the Statement of Profit and Loss.
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 matters described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone Ind AS 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, 2017, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the standalone Ind AS financial statements:
(a) Note 37(d) to the standalone Ind AS financial statements which describes uncertainties relating to the outcome of the Appeal filed before the Honâble Supreme Court. Pending outcome of the Appeal filed before the Honâble Supreme Court, no adjustment has been made by the Company in respect of the standby charges estimated at Rs.519 crore accounted for as revenue in earlier periods and its consequential effects for the period upto 31st March, 2017. The impact of the same on the standalone Ind AS financial statements for the year ended 31st March, 2017 cannot presently be determined pending the ultimate outcome of the matter. Since the Company is of the view, supported by legal opinion, that the Tribunalâs Order can be successfully challenged, adjustment, if any, will be recorded by the Company based on final outcome of the matter.
(b) Note 37(f) to the standalone Ind AS financial statements in respect of entry tax matter, estimated at Rs.1,967.43 crore (including interest of Rs.643.99 crore and penalty of Rs.740.89 crore), has been decided by the Honâble Bombay High Court against the Company. The Company is of the view, supported by legal opinions, that it has a strong case on merits and has appealed the matter before the Honâble Supreme Court. Adjustments, if any, will be recorded by the Company based on final outcome of the matter.
(c) Note 34(a) to the standalone Ind AS financial statements which describes the basis on which Management has considered that no impairment is necessary as at 31st March, 2017 for long term-investments of Rs.11,136.15 crore in Coastal Gujarat Power Limited (CGPL), and no provision is required in respect of guarantees of Rs.2,781.69 crore given to CGPLâs lenders.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit and referred to in the Other Matters paragraphs above we report, to the extent applicable that:
a) We have sought and except for the matters described in the Basis for Qualified Opinion paragraph above, 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 matters described in the Basis for Qualified Opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company.
c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) Except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) The matters described in the Basis for Qualified Opinion paragraph and Emphasis of Matters paragraphs 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, 2017, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017, 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 adequacy of the internal financial controls over financial reporting of the Company, refer to our separate Report in âAnnexure Aâ. Our report expresses a qualified opinion on the operating effectiveness of the Companyâs internal financial controls over financial reporting.
i) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, 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 Ind AS financial statements.
ii. 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.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from 8th November 2016 to 30th December 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the Company.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
ANNEXURE B TO THE INDEPENDENT AUDITORSâ REPORT
(Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ 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) The Company has a program of verification of fixed assets to cover all the items in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold and property, plant and equipment, are held in the name of the Company as at the balance sheet date, except the following:
Particulars of the land and Building |
Cost (as at the balance sheet date) Rs. crore |
Remarks |
Land at Vikhroli |
25.94 |
Agreement is pending finalization on account of dispute |
Land at Bhira |
1.44 |
Agreement is pending finalization |
Land at Bhivpuri |
0.77 |
Agreement is pending finalization |
Flats at Andheri |
0.24 |
Agreement is pending finalization |
Land at Haldia |
5.41 |
Agreement is pending finalization |
Land at Bhanwaj |
* |
Agreement is pending finalization |
Land at Sawle |
* |
Agreement is pending finalization |
Land at Sion Salt Pans |
* |
Agreement is pending finalization |
Land at Bhandup |
0.02 |
Agreement is pending finalization |
Land at Mahul |
0.07 |
Agreement is pending finalization |
Land at Wadhavli & Marawli |
0.07 |
Agreement is pending finalization |
Land at Mahul |
* |
Agreement is pending finalization |
Land at Kambe |
* |
Agreement is pending finalization |
Land at Vadol - Ambernath |
* |
Agreement is pending finalization |
Land at Malusar |
* |
Agreement is pending finalization |
* Denotes figures below Rs.50,000/-
(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013, in respect of which:
(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Companyâs interest.
(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.
(c) There is no overdue amount remaining outstanding as at the balance sheet date.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act. According to the information and explanations given to us, no Order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.
(vi) The maintenance of cost records has been specified by the Central Government under Section 148(1) of the Companies Act, 2013 for Generation, transmission, distribution and supply of electricity regulated by the relevant regulatory body or authority under the Electricity Act, 2003 (36 of 2003), other than for captive generation (as defined under the Electricity Rules 2005) and machinery and mechanical appliances used in defence, space and atomic energy sectors. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, 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, employeesâ state insurance, income-tax, sales 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, employeesâ 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, 2017 for a period of more than six months from the date they became payable.
(c) Details of dues of income-tax, sales tax, wealth tax, service tax, customs duty, excise duty and value added tax which have not been deposited as on 31st March, 2017 on account of disputes are given below:
Name of the statute |
Nature of the dues |
Amount (Rs. crore) |
Period to which the amount relates |
Forum where dispute is pending |
Customs Laws |
Customs Duty |
37.60 |
1993-94 to 1999-00 and 2012-13 |
Appellate Authority - upto Commissioner level |
Maharashtra Tax on the Entry of Goods into Local Areas Act, 2002 |
Entry Tax |
1,967.43 |
2005-06 to 2012-13 |
Supreme Court |
Maharashtra Value Added Tax Act, 2002 |
VAT |
17.91 |
2008-09 |
Sales Tax Appellate Tribunal |
Central Excise Laws |
Excise Duty |
0.90 |
1992-93 to 1995-96 |
Appellate Authority - upto Tribunal Level |
The Water ( Prevention & Control of Pollution ) Cess Act 1977 |
Cess |
1.13 |
2009-10 |
Chairman MPCB |
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks, government and dues to debenture holders.
(ix) In our opinion and according to the information and explanations given to us, money raised by way of initial public offer/ further public offer (including debt instruments) and the term loans have been applied by the Company during the year for the purposes for which they were raised.
(x) 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 by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year, the Company has not entered into any non-cash transactions with its directors or directors of its holding, subsidiary or associate company or persons connected with them and hence provisions of Section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firmâs Registration No. 117366W/W-100018)
UDAYAN SEN Partner
(Membership No. 031220)
MUMBAI, 19th May, 2017
Mar 31, 2016
We have audited the accompanying standalone financial statements of THE
TATA POWER COMPANY LIMITED ("the Company"), which comprise the Balance
Sheet as at 31st March, 2016, 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 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
prescribed under Section 133 of the Act, as applicable.
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 judgements 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 and the Order under Section 143 (11) of the Act.
We conducted our audit of the standalone financial statements 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 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 judgement, 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. 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 audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, 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, 2016, and its profit and its cash flows for the year
ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the
standalone financial statements:
(a) Note 32(d) to the standalone financial statements which describes
uncertainties relating to the outcome of the Appeal filed before the
Hon''ble Supreme Court. Pending outcome of the Appeal filed before the
Hon''ble Supreme Court, no adjustment has been made by the Company in
respect of the standby charges estimated atRs. 519 crores accounted for
as revenue in earlier periods and its consequential effects (Note 32
(d)) for the period upto 31st March, 2016. The impact of the same on
the results for the year ended 31 st March, 2016 cannot presently be
determined pending the ultimate outcome of the matter. Since the
Company is of the view, supported by legal opinion, that the Tribunal''s
Order can be successfully challenged, adjustment, if any, including
consequential adjustments to the deferred tax liability fund and the
deferred tax liability account, will be recorded by the Company based
on final outcome of the matter.
(b) Note 29(a) to the standalone financial statements which describes
the basis on which Management has considered that no provision is
considered necessary for long-term investment in Coastal Gujarat Power
Limited (CGPL), a wholly owned subsidiary of Rs. 6,030.42 crores, loans
of Rs. 3,795.89 crores and guarantees of Rs. 2,984.67 crores to CGPL as
at 31 st March, 2016.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. 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) 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 aforesaid standalone financial statements
comply with the Accounting Standards prescribed under Section 133 of
the Act, as applicable.
(e) The matters described in the Emphasis of Matters 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, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2016
from being appointed as a director in terms of Section 164 (2) of the
Act.
(g) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in "Annexure A". Our
report expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial controls over
financial reporting.
(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.
ii. 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.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government in terms of Section 143(11) of
the Act, we give in "Annexure B"a statement on the matters specified in
paragraphs 3 and 4 of the Order.
ANNEXURE B TO THE INDEPENDENT AUDITOR''S REPORT
(Referred to in paragraph 2 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) The Company has a program of verification of fixed assets to cover
all the items in a phased manner over a period of three years which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. Pursuant to the program, certain fixed
assets were physically verified by the Management during the year.
According to the information and explanation given to us, no material
discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the
records examined by us and based on the examination of the registered
sale deed/transfer deed/conveyance deed provided to us, we report that,
the title deeds, comprising all the immovable properties of land and
buildings which are freehold, are held in the name of the Company as at
the balance sheet date, except the following:
Particulars of the
land Gross Block (as at
the balance Remarks
sheet date)
Rs. crores
Land atVikhroli 25.94 Agreement is pending
realisation on account of
dispute
In respect of immovable properties of land and buildings that have been
taken on lease and disclosed as fixed assets in the standalone
financial statements, the lease agreements are in the name of the
Company, where the Company is the lessee in the agreement, except the
following:
Particulars of the
land and Gross
Block (as
at the
balance Remarks
building sheet
date)
Rs. crores
Lease hold Land at
Dehrand 225.60 The Company has received
allotment letters from
Leasehold land at
Ambivali village, 21.16 government, however, lease
agreements are
Versova pending finalisation
Land at Bhira 1.44 Agreement is pending finalisation
Land at Bhivpuri 0.77 Agreement is pending finalisation
Flats at Andheri 0.24 Agreement is pending finalisation
Land at Haldia 5.41 Agreement is pending finalisation
Land at Bhanwaj * Agreement is pending finalisation
Land at Sawle * Agreement is pending finalisation
Land at Sion Salt Pans * Agreement is pending finalisation
Land at Bhandup 0.02 Agreement is pending finalisation
Land at Mahul 0.07 Agreement is pending finalisation
Land at Wadhavli
& Marawli 0.07 Agreement is pending finalisation
Land at Mahul * Agreement is pending finalisation
Land at Kambe * Agreement is pending finalisation
Land at Vadol-
Ambernath * Agreement is pending finalisation
Land at Malusar * Agreement is pending finalisation
Building at Jojobera 238.16 Building is constructed on lease
land for which agreement is
pending finalisation
* Denotes figures below Rs. 50,000/-
(ii) As explained to us, the inventories were physically verified
during the year by the Management at reasonable intervals and no
material discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us, the
Company has granted loans, secured or unsecured, to companies, firms.
Limited Liability Partnerships or other parties covered in the Register
maintained under Section 189 of the Companies Act, 2013, in respect of
which:
(a) The terms and conditions of the grant of such loans are, in our
opinion, prima facie, not prejudicial to the Company''s interest.
(b) The schedule of repayment of principal and payment of interest has
been stipulated and repayments or receipts of principal amounts and
interest have been regular as per stipulations.
(c) There is no overdue amount remaining outstanding as at the balance
sheet date.
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
185 and 186 of the Companies Act, 2013 in respect of grant of loans,
making investments and providing guarantees and securities, as
applicable.
(v) According to the information and explanations given to us, the
Company has not accepted any deposit during the year. In respect of
unclaimed deposits, the Company has complied with the provisions of
Sections 73 to 76 or any other relevant provisions of the Companies
Act. According to the information and explanations given to us, no
Order has been passed by the Company Law Board or the National Company
LawTribunal or the Reserve Bank of India or any Court or any
otherTribunal.
(vi) The maintenance of cost records has been specified by the Central
Government under Section 148(1) of the Companies Act, 2013 for
Generation, transmission, distribution and supply of electricity
regulated by the relevant regulatory body or authority under the
Electricity Act, 2003 (36 of 2003), other than for captive generation
(as defined under the Electricity Rules, 2005) and machinery and
mechanical appliances used in defence, space and atomic energy sectors.
We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Records and Audit) Rules, 2014, as
amended prescribed by the Central Government under sub-section (1) of
Section 148 of the Companies Act, 2013, 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 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, 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, 2016 for a period
of more than six months from the date they became payable.
(c) Details of dues of income-tax, sales tax, wealth tax, service tax,
customs duty, excise duty and value added tax which have not been
deposited as on 31st March, 2016 on account of disputes are given
below:
Name of the statute Nature of the Amount Period to which the
dues (Rs. in
crores) amount relates
Customs Laws Customs Duty 37.60 1993-94 to 1999-00
and 2012-13
Maharashtra Tax on
the Entry of Entry Tax 1,104.54 2006-07,2007-08,
Goods into Local
Areas Act, 2002 2009-10 and 2011-12
709.15 2005-06 and 2008-09
Maharashtra Value
Added Tax Act, VAT 17.91 2008-09
2002
Central Excise Laws Excise Duty 0.90 1992-93 to 1995-96
The Water
(Preventions Control Cess 1.13 2009-10
of Pollution) Cess
Act, 1977
Name of the Statute Forum where dispute is pending
Customs Laws Appellate Authority - upto
Commissioner level
Maharashtra Tax on the Entry of
Goods into Local Areas Act, 2002 Appellate Authority- Joint
Commissioner
High Court
Maharashtra Value Added Tax
Act, 2002 Sales Tax Appellate Tribunal
Central Excise Laws Appellate Authority- upto
Tribunal Level
The Water (Prevention & Control
of Pollution) Cess Act, 1977 Chairman MPCB
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of loans or
borrowings to financial institutions, banks and government and dues to
debenture holders.
(ix) In our opinion and according to the information and explanations
given to us, money raised by way of initial public offer/ further
public offer (including debt instruments) and the term loans have been
applied by the Company during the year for the purposes for which they
were raised.
(x) 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 by its officers or employees has been noticed or
reported during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has paid/provided managerial remuneration in
accordance with the requisite approvals mandated by the provisions of
Section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under
clause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us the Company is in compliance with Section 177 and 188 of
the Companies Act, 2013, where applicable, for all transactions with
the related parties and the details of related party transactions have
been disclosed in the financial statements etc. as required by the
applicable accounting standards.
(xiv) During the yearthe Company has not made any preferential
allotment or private placement of shares orfully or partly convertible
debentures and hence reporting under clause (xiv) of CARO 2016 is not
applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any
non-cash transactions with its directors or directors of its holding,
subsidiary or associate company or persons connected with them and
hence provisions of Section 192 of the Companies Act, 2013 are not
applicable.
(xvi) The Company is not required to be registered under Section 45-1
of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm''s Registration No. 117366W/W-100018)
R. A. BANGA
Partner
Membership Number: 037915
MUMBAI, 23rd May, 2016.
Mar 31, 2014
We have audited the accompanying financial statements of THE TATA POWER
COMPANY LIMITED ("the Company"), which comprise the Balance Sheet as at
31st March, 2014, the Statement of Prof t and Loss and the Cash Flow
Statement for the year then ended, and a summary of the signif cant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these f
nancial 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 notif ed 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 Af
airs) 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
ef ectiveness 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 suf cient 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, 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 af airs of the
Company as at 31st March, 2014;
(b) in the case of the Statement of Prof t and Loss, of the prof t 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
(a) We draw attention to Note 32 (d) and (e) to the financial
statements which describes uncertainties relating to the outcome of the
Appeal filed before the Hon''ble Supreme Court. Pending outcome of the
Appeal filed before the Hon''ble Supreme Court, no adjustment has been
made by the Company in respect of the standby charges estimated at Rs.
519 crores accounted for as revenue in earlier periods and its
consequential ef ects (Note 32 (d) and (e)) for the period upto 31st
March, 2014. The impact of the same on the results for the year ended
31st March, 2014 cannot presently be determined pending the ultimate
outcome of the matter. Since the Company is of the view, supported by
legal opinion, that the Tribunal''s Order can be successfully
challenged, no provision/adjustment has been considered necessary.
(b) We draw attention to Note 29 (a) to the financial statements which
describes the key source of estimation uncertainties as at 31st March,
2014 relating to the Company''s assessment of the recoverability of the
carrying amount of assets of Coastal Gujarat Power Limited (CGPL), a
wholly owned subsidiary that could result in material adjustment to the
carrying amount of the long-term investment in the said subsidiary. For
the reasons explained in the said Note, no provision for diminution in
value of investment is considered necessary.
(c) We draw attention to Note 29 (d) to the financial statements
regarding notices received by the jointly controlled entities in
connection with delay in development of coal blocks and the consequent
de-allocation of the same and the management''s contention that in case
of one of the jointly controlled entity, notices will be withdrawn
considering the progress made by the said jointly controlled entity
towards obtaining necessary clearances and in the case of the second
jointly controlled entity the interim order of the High Court in which
the decision for de-allocation of the Coal Block to the promoters have
been kept on hold. For the reasons explained in the said Note, no
provision for diminution in value of investments is considered
necessary.
Our opinion is not qualif ed in respect of these matters.
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 specif ed
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 Prof t 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 Prof t and
Loss, and the Cash Flow Statement comply with the Accounting Standards
notif ed 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 Af
airs).
(e) 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 disqualif ed 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, clauses (xii), (xiii), (xiv), (xviii) and
(xx) of CARO are not applicable.
(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) The Company has a program of verif cation of fixed assets to cover
all the items in phased manner over a period of three years which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. Pursuant to the program, certain fixed assets
were physically verif ed by the Management during the year. According
to the information and explanation given to us, no material
discrepancies were noticed on such verif cation.
(c) The fixed assets disposed of during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company.
(ii) In respect of its inventories:
(a) As explained to us, the inventories were physically verif ed during
the year by the management at reasonable intervals. Materials lying
with third parties, have substantially been physically verif ed or conf
rmed by the third parties. In our opinion the frequency of verif cation
is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verif cation 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
verif cation.
(iii) According to the information and explanation given to us,
(a) The Company has granted loans aggregating to Rs. 598.90 crore to its
wholly owned subsidiary in an earlier year, a company covered in the
register maintained under Section 301 of the Companies Act, 1956. At
the year end, the outstanding balanced of such loan granted aggregated
Rs. 598.90 crore.
(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 receipt 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.
(e) The Company has not taken any loans, secured or unsecured, from
companies, f rms or other parties covered in the Register maintained
under Section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the
services rendered 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, fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
(v) In respect of contracts or arrangements entered in the register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect
of any party, the transactions have been made at prices which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time and having regard to our comment in paragraph (iv) above.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year.
In respect of unclaimed deposits, the Company has complied with the
provisions of Sections 58A and 58AA or any other relevant provisions of
the Companies Act, 1956.
(vii) In our opinion, the internal audit functions carried out during
the year by a f rm of Chartered Accountants appointed by the management
has been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Companies Cost Accounting Records (Electricity
Industry) Rules, 2011 and Cost Accounting Records 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 accounts and 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.
(ix) According to 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, 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, wealth tax, sales tax, service tax, customs
duty, excise duty and 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, sales tax, wealth tax, service tax,
customs duty, excise duty and cess which have not been deposited as on
31st March, 2014 on account of disputes are given below:
Name of the
statute Nature of the Amount Period to
which the Forum where
dispute is pending
dues (Rs.in
crore) amount
relates
Customs Laws Customs Duty 2.80 1993-94 to
1999-00 Appellate Author
-ity - upto
Commissioner level
Maharashtra
Tax on the
Entry of Enty Tax 1,119.69 2005-06,
2006-07, Sales Tax Appellate
Tribunal and Joint
Goods into
Local Areas
Act, 2002 2008-09,
and
2009-10 Commissioner
Maharashtra
Value
Added Tax VAT 17.91 2008-09 Sales Tax Appellate
Tribunal
Act, 2002
Central
Excise Laws Excise Duty 8.61 1992-93 to
2012-13 Appellate Authority
- upto Tribunal Level
Cess Laws Cess 1.13 2009-10 Chairman, MPCB
Income Tax
Act, 1961 Income Tax 46.09 2007-08 and
2008-09 Income Tax Appel
-late Tribunal
(x) The Company does not have accumulated losses as at 31st March, 2014
and the Company has not incurred cash losses during the financial year
covered by our audit and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks, financial institutions and debenture holders.
(xii) 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 and financial institutions
are not, prima facie, prejudicial to the interests of the Company.
(xiii) 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.
(xiv) 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 to
Rs. 1,521.56 crore have been used for long-term investments and fixed
assets.
(xv) According to information and explanations given to us, during the
period covered by our audit report, the Company has created securities/
charges in respect of the debentures issued.
(xvi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no signif cant
fraud on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm''s Registration No. 117366W/W-100018)
R. A. BANGA
Partner
Membership Number: 037915
MUMBAI, 29th May, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of THE TATA POWER
COMPANY LIMITED ("the Company") which comprise the Balance Sheet as at
31st 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, 1956 ("the Act") 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 judgement, 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, 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, 2013;
(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 Matters
(a) We draw attention to Note 32(d) to the financial statements which
describes uncertainties relating to the outcome of the Appeal filed
before the Hon''ble Supreme Court. Pending outcome of the Appeal filed
before the Hon''ble Supreme Court, no adjustment has been made by the
Company in respect of the standby charges estimated at Rs. 519 crore
accounted for as revenue in earlier periods and its consequential
effects [Note 32(d) and (e)] for the years upto 31st March, 2013. The
impact of the same on the results for the year ended 31st March, 2013
cannot presently be determined pending the ultimate outcome of the
matter. Since the Company is of the view, supported by legal opinion,
that the Tribunal''s Order can be successfully challenged, no
provision/adjustment has been considered necessary.
(b) We draw attention to Note 29(a) to the financial statements which
describes the key source of estimation uncertainties as at 31st March,
2013 relating to the Company''s assessment of the recoverability of the
carrying amount of assets that could result in material adjustment to
the carrying amount of the long-term investment in a subsidiary. For
the reasons explained in the Note, no provision for diminution in value
of investment is considered necessary.
Our opinion is not qualified in respect of these matters.
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, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
Section 211(3C) of the Act.
(e) On the basis of written representations received from the directors
as on 31st March, 2013 taken on record by the Board of Directors, none
of the directors is disqualified as on 31st March, 2013 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)
(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) The fixed assets were physically verified during the year by the
Management in accordance with a regular 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.
(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. Materials lying
with third parties, have substantially been physically verified or
confirmed by the third parties. In our opinion the frequency of
verification is reasonable.
(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) 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.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations thatsome of the services
rendered 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, fixed assets and the sale of goods and services. During the
course of our audit, we have not observed any major weakness in such
internal control system.
(v) In respect of contracts or arrangements entered in the register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rs. 5 lakhs in
respect of any party, the transactions have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time and having regard to our comment in
paragraph (iv) above.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year.
In respect of unclaimed deposits, the Company has complied with the
provisions of Sections 58A and 58AA or any other relevant provisions of
the Companies Act, 1956.
(vii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the management
has been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Companies Cost Accounting Records (Electricity
Industry) Rules, 2011 and Cost Accounting Records 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 accounts and 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.
(ix) According to information and explanations given to us in respect
of statutory dues:
(a) The Companyhasgenerallybeen regularin depositing undisputed
statutorydues,including providentfund,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, wealth tax, sales tax, service tax, customs
duty, excise duty and cess and other material statutory dues in
arrears, as at 31st March, 2013 for a period of more than six months
from the date they became payable.
(c) Details of dues of income tax, sales tax, wealth tax, service tax,
customs duty, excise duty and cess which have not been deposited as on
31st March, 2013 on account of disputes are given below:
Nature of the Amount
Name of the statute dues (Rs. in crore)
Customs Laws Customs Duty 2.61
Central Excise Laws Excise Duty 8.61
Cess Laws Cess 1.13
Income Tax Act, 1961 Income Tax 31.83
Wealth Tax Wealth Tax 0.88
Name of the Statute Period to which the Forum where dispute
is pending
amount relates
Customs Laws 1993-94 to 1999-00 Appellate Authority -
upto Commissioner level
Central Excise Laws 1992-93 to 1995-96 Appellate Authority -
upto Tribunal Level
Cess Laws 2009-10 Chairman MPCB
Income Tax Act 1961 2007-08 Income Tax Appellate
Tribunal
Wealth Tax 2009-10 Commissioner of Wealth
Tax (CWT(A))
(x) The Company does not have accumulated losses as at 31st March, 2013
and has not incurred cash losses during the financial year covered by
our audit and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks, financial institutions and debenture holders.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute as specified under Clause
(xiii) of the Order are not applicable to the Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not a dealer or trader in securities.
(xv) 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 and financial institutions
are not, prima facie, prejudicial to the interests of the Company.
(xvi) 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 of term loans of Rs. 458.30 crore, pending
application in short-term bank and inter-corporate deposits.
(xvii) 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.
(xviii) According to information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and Companies covered in the register maintained under section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company has created
securities/charges in respect of the debentures issued.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no significant
fraud on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117366W)
R. A. BANGA
Partner
(Membership Number: 37915)
Mumbai, 30th May, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of THE TATA POWER
COMPANY LIMITED ("the Company"), as at 31st March, 2012, the Statement
of Profit and Loss and the Cash Flow Statement of the Company for the
year ended on that date, both annexed thereto. These financial
statements are the responsibility of the Company's Management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. Without qualifying our opinion we draw attention to the following
matters referred to in the Notes forming part of the financial
statements:
(i) uncertainties relating to the outcome of the Appeal filed before
the Hon'ble Supreme Court. As stated in Note 32 (f) pending outcome of
the Appeal filed before the Hon'ble Supreme Court, no adjustment has
been made by the Company in respect of the standby charges estimated
at Rs. 519 crore accounted for as revenue in earlier periods and
its consequential effects [Notes 32(f) and (g)] for the years upto
31st March, 2012. The impact of the above on the results for the year
ended 31st March, 2012 cannot presently be determined pending the
ultimate outcome of the matter. Since the Company is of the view,
supported by legal opinion, that the Tribunal's Order can be
successfully challenged, no provision/adjustment has been considered
necessary.
(ii) provision for investment in a subsidiary referred to in Note
32(j), which describes the key source of estimation uncertainty as at
31st March, 2012 relating to the Company's assessment of the
recoverability of carrying amounts of assets including assets under
construction that could result in material adjustment to the carrying
amount of the long-term investment in that subsidiary.
(iii) applicability of depreciation rates as notified by Central
Electricity Regulatory Commission (CERC) to accounting for regulated
and non-regulated operations, referred to in Note 2.1 (h)(i) in respect
of which the Company has sought clarifications and guidance from the
Ministry of Corporate Affairs.
4. As required by the Companies (Auditor's Report) Order, 2003 (CARO)
issued by the Central Government of India in terms of Section 227(4A)
of the Companies Act, 1956, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
5. Read with our comments in paragraph 3 and annexure referred to in
paragraph 4 above, we report as follows:
(i) 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;
(ii) 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;
(iii) 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;
(iv) in our opinion, the Balance Sheet, the Statement of Profit and
Loss and the Cash Flow Statement dealt with by this report are in
compliance with the Accounting Standards referred to in Section 211(3C)
of the Companies Act, 1956;
(v) in our opinion and to the best of our information and according to
the explanations given to us, they said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
6. On the basis of the written representations received from the
Directors as on 31st March, 2012 taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2012 from being appointed as a director in terms of Section
274(1 )(g) of the Companies Act, 1956.
Annexure to the Auditors' Report
(Referred to in paragraph 4 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 the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular program 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.
(ii) In respect of its inventory:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals. Materials lying
with third parties, have substantially been physically verified or
confirmed by the third parties. In our opinion the frequency of
verification is reasonable.
(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 inventories
and no material discrepancies were noticed on physical verification.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to/from Companies, firms or other parties listed in the
register maintained under Section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the
Services rendered 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, fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rs. 5 lakh in respect
of any party, the transactions have been made at prices which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time except in respect of certain services rendered for which
comparable quotations are not available and in respect of which we are
unable to comment.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year.
In respect of unclaimed deposits, the Company has complied with the
provisions of Sections 58A and 58AA or any other relevant provisions of
the Companies Act, 1956.
(vii) In our opinion, the internal audit function carried out during
the year by a firm of Chartered Accountants appointed by the Management
has been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Companies Cost Accounting Records ( Electricity
Industry) Rules, 2011 and Cost Accounting Records 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 accounts and 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.
(ix) According to 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,
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 Income Tax,
Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Cess
and other material statutory dues in arrears, as at 31st March, 2012
for a period of more than six months from the date they became payable.
(c) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty and Cess which have not been deposited as on
31st March, 2012 on account of disputes are given below:
Name of the Nature of the Amount Period to
which the Forum where
dispute
statute dues (Rs. in crore) amount
relates is pending
Customs Laws Customs Duty 2.20 1993-94 to
1999-2000 Appellate
Authority
upto Commis
sioner level
Central
Excise Laws Excise Duty 0.90 1992-93 to
1995-96 Appellate
Authority-
upto Tribunal
Level
Income Tax
Act, 1961 Income Tax 24.52 2008-09 Appellate
Authority
Commissioner
(x) The Company does not have accumulated losses as at 31st March, 2012
and has not incurred cash losses during the financial year ended as on
that date or in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks, financial institutions and debenture holders.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute as specified under Clause
(xiii) of the Order are not applicable to the Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not a dealer or trader in securities.
(xv) 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 and financial institutions
are not prima facie prejudicial to the interests of the Company.
(xvi) 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 of term loans
of Rs. 870 crore pending application in short-term bank deposits.
(xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long-term investment.
(xviii) According to information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and Companies covered in the register maintained under Section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company has created
securities/charges in respect of the debentures issued.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
significant fraud on or by the Company, noticed or reported during the
year nor have we been informed of such case by the Management.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No. 117366W)
N.VENKATRAM
Partner
(Membership No. 71387)
Mumbai, 22nd May, 2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of THE TATA POWER
COMPANY LIMITED ("the Company"), as at 31st March, 2011, the Profit and
Loss Account and the Cash Flow Statement for the year ended on that
date, both annexed thereto. These financial statements are the
responsibility of the Company's Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. Without qualifying our opinion we draw attention to:
(i) Note 10 (f) of the Notes forming part of the Accounts. As stated in
the Note, subject to the outcome of the Appeal filed before the Supreme
Court, no adjustment has been made by the Company in respect of the
standby charges accounted for as revenue in earlier periods estimated
at Rs. 519 crores and its consequential effects [Note 10 (f) and (g)] for
the period upto 31st March, 2011.The impact of the above on the results
for the year cannot presently be determined pending the ultimate
outcome of the matter. The Company is of the view, supported by legal
opinion, that the Tribunal's Order can be successfully challenged. In
view of this no provision/adjustment has been considered necessary.
(ii) Note 10 (j) , which describes the key source of estimation
uncertainty as at 31st March, 2011 relating to the Company's long-term
investment in its subsidiary.
4. As required by the Companies (Auditor's Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
5. Further to our comments in the Annexure referred to in paragraph 4
above, we report that:
(i) 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;
(ii) 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 ;
(iii) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(v) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(1) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
(2) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(3) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
6. On the basis of the written representations received from the
Directors, as on 31st March, 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2011 from being appointed as a director in terms of Section
274(1)(g) of the Companies Act, 1956.
Annexure to the Auditors' Report
(Referred to in paragraph 3 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 the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular program 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 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 inventory:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals. In respect of
materials lying with third parties, these have substantially been
physically verified or confirmed by third parties. In our opinion the
frequency of verification is reasonable.
(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) The Company has neither granted nor taken any loans, secured or
unsecured, to/from Companies, firms or other parties listed in the
register maintained under Section 301 of the Companies Act, 1956.
(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 systems 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 goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
(v) According to the information and explanations given to us, the
Company has not entered into any contract or arrangement with other
parties, which needs to be entered in the register maintained under
Section 301 of the Companies Act, 1956.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
In respect of unclaimed deposits, the Company has complied with the
provisions of Sections 58A and 58AA or any other relevant provisions of
the Companies Act, 1956.
(vii) In our opinion, the internal audit function carried out during
the year by a firm of Chartered Accountants appointed by the Management
has been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 in respect of the electricity business and electronic
products of the Company and are of the opinion that prima facie the
prescribed accounts and records have been made and maintained. We have,
however, not made a detailed examination of the records with a view to
determining whether they are accurate or complete.
(ix) According to 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,
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 Income Tax,
Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Cess
and other material statutory dues in arrears, as at 31st March, 2011
for a period of more than six months from the date they became payable.
(c) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty and Cess which have not been deposited as on
31st March, 2011 on account of disputes are given below:
Name of Nature of Amount Period to
which the Forum where dispute
is pending
the statute the dues (Rs. in
Crores) amount
relates
Customs Laws Customs Duty 2.74 1993-94 to
2003-04 Appellate Authority -
upto Commissioner level
Central
Excise Excise Duty 13.78 1992-93 to
2002-03 Appellate Authority -
upto Tribunal Level
Laws
Sales Tax
Laws Sales Tax/
Entry 13.27 2006-07 to
2010-11 Supreme Court
Tax
Cess Laws Cess 8.71 1992-93 to
2009-10 Appellate Authority of
The Water (Prevention
and Control of
Pollution) Cess
Act, 1977
Income Tax Income Tax 25.77 2008-09 to
2009-10 Appellate Authority-
Commissioner
Act, 1961
(x) The Company does not have accumulated losses as at 31st March, 2011
and has not incurred cash losses during the financial year ended as on
that date or in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks, financial institutions and debenture holders.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute as specified under Clause
(xiii) of the Order are not applicable to the Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not a dealer or trader in securities.
(xv) 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 and financial institutions
are not prima facie prejudicial to the interests of the Company.
(xvi) 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
application of term loans of Rs. 252 crores in working capital and
short-term bank deposits.
(xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long-term investment.
(xviii)According to information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and Companies covered in the register maintained under section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company has created
securities/charges in respect of the debentures issued.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud on or by the Company has been
noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No. 117366W)
N. VENKATRAM
Partner
(Membership Number: 71387)
Mumbai, 19th May, 2011.
Mar 31, 2010
1. We have audited the attached Balance Sheet of THE TATA POWER
COMPANY LIMITED ("the Company"), as at 31 st March, 2010, the Profit
and Loss Account and the Cash Flow Statement for the year ended on that
date, both annexed thereto in which is incorporated the Return from
Bangladesh Branch audited by other auditor. These financial statements
are the responsibility of the Companys Management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India.Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining,on a test basis,evidence supporting the amounts and
the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) 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;
(ii) 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 and proper return adequate for the purpose of our audit
have been received from the Bangladesh Branch audited by other auditor.
The report on the accounts of Bangladesh Branch audited by other
auditors has been forwarded to the Company and has been appropriately
dealt with;
(iii) the report on the accounts of the Bangladesh Branch audited by
other auditor has been forwarded to us and has been dealt with by us in
preparing this report;
(iv) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account and the audited Branch Return;
(v) without qualifying our opinion, we draw attention to Note 10 (f) of
the Notes forming part of the Accounts. As stated in the Note, subject
to the outcome of the Appeal filed before the Supreme Court, no
adjustment has been made by the Company in respect of the standby
charges accounted for as revenue in earlier periods estimated at Rs.
519 crores and its consequential effects [Note 10(f) and (g)] for the
period upto 31st March, 2010.The impact of the above on the results for
the year cannot presently be determined pending the ultimate outcome of
the matter. The Company is of the view, supported by legal opinion,
that theTribunals Order can be successfully challenged. In view of
this no provision/adjustment has been considered necessary;
(vi) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211 (3C) of the
Companies Act, 1956;
(vii) in our opinion and to the best of our information and according
to the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(1) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 st March, 2010;
(2) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(3) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors, as on 31 st March,2010 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31 st March, 2010 from being appointed as a director in terms of
Section 274(1)(g) of the Companies Act, 1956.
Annexure to the Auditors Report (Referred to in paragraph 3 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 the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular program 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.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of 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 inventory:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals. In respect of
materials lying with third parties, these have substantially been
physically verified or confirmed by third parties. In our opinion the
frequency of verification is reasonable.
(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) The Company has neither granted nor taken any loans, secured or
unsecured, to/from Companies, firms or other parties listed in the
register maintained under Section 301 of the Companies Act, 1956.
(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 systems 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 goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
(v) According to the information and explanations given to us, the
Company has not entered into any contract or arrangement with other
parties, which needs to be entered in the register maintained under
Section 301 of the Companies Act, 1956.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
In respect of unclaimed deposits, the Company has complied with the
provisions of Sections 58A and 58AA or any other relevant provisions of
the Companies Act, 1956.
(vii) In our opinion, the internal audit function carried out during
the year by a firm of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1 )(d) of the Companies
Act, 1956 in respect of the electricity business and electronic
products of the Company and are of the opinion that prima facie the
prescribed accounts and records have been made and maintained. We have,
however, not made a detailed examination of the records with a view to
determining whether they are accurate or complete.
(ix) According to 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,EmployeesState 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 Income Tax,
Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Cess
and other material statutory dues in arrears, as at 31st March, 2010
for a period of more than six months from the date they became payable.
(c) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty and Cess which have not been deposited as on
31 st March, 2010 on account of disputes are given below:
Name of the Nature of Amount Period to which the
statute the dues (Rs. in Crores) amount relates
Customs Customs 3.71 1993-94 to 2003-04
Laws Duty
Central Excise Duty 13.78 1992-93 to 2002-03
Excise Laws
Sales Tax Sales Tax/ 11.51 2006-07 to 2009-10
Laws Entry Tax
Cess Laws Cess 7.78 1992-1993 to 2004-2005
Income Tax Income Tax 64.20 2005-06 to 2007-08
Act, 1961
Name of the Forum where dispute is pending
statue
Customs
Laws Appellate Authority - upto Commissioner level
Central
Excise Laws Appellate Authority - upto Tribunal Level
Sales Tax
Laws Supreme Court
Cess Laws Appellate Authority of The Water (Prevention
and Control of Pollution) Cess Act, 1977
Income Tax
Act, 1961 Appellate Authority - Commissioner
(x) The Company does not have accumulated losses as at 31st March, 2010
and has not incurred cash losses during the financial year ended as on
that date or in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks, financial institutions and debenture holders.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute as specified under Clause
(xiii) of the Order are not applicable to the Company.
(xiv) In our opinion and according to the information and explanations
given to us,the Company is not a dealer or trader in securities.
(xv) 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 and financial institutions
are not prima facie prejudicial to the interests of the Company.
(xvi) 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
application of term loans of Rs.472 crores, in working capital and
short-term investments.
(xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long-term investment.
(xviii) According to information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and Companies covered in the register maintained under section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, during
the period covered by our Audit Report, the Company has created
securities/charges in respect of the debentures issued.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud on or by the Company has been
noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No. 117366W)
N.VENKATRAM
Partner
Membership Number: 71387
Mumbai, 24th May, 2010.
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