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Tata Power Company Ltd.

BSE: 500400 Sector: Infrastructure
NSE: TATAPOWER ISIN Code: INE245A01021
BSE LIVE 15:59 | 15 Dec 91.25 0.75
(0.83%)
OPEN

91.90

HIGH

92.00

LOW

90.85

NSE 15:56 | 15 Dec 91.20 0.70
(0.77%)
OPEN

91.55

HIGH

92.10

LOW

90.70

OPEN 91.90
PREVIOUS CLOSE 90.50
VOLUME 319996
52-Week high 97.05
52-Week low 72.60
P/E 44.51
Mkt Cap.(Rs cr) 24,681
Buy Price 0.00
Buy Qty 0.00
Sell Price 91.25
Sell Qty 75.00
OPEN 91.90
CLOSE 90.50
VOLUME 319996
52-Week high 97.05
52-Week low 72.60
P/E 44.51
Mkt Cap.(Rs cr) 24,681
Buy Price 0.00
Buy Qty 0.00
Sell Price 91.25
Sell Qty 75.00

Tata Power Company Ltd. (TATAPOWER) - Auditors Report

Company auditors report

TO THE MEMBERS OF

THE TATA POWER COMPANY LIMITED

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of THE TATAPOWER COMPANY LIMITED ("the Company") which comprise the Balance Sheet asat 31st March 2017 and the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit 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 withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our qualified audit opinion on the standalone Ind AS financialstatements.

Basis for Qualified Opinion

As described in Note 34 (b) and (c) to the standalone Ind AS financial statements thefair value of unquoted equity shares of Tata Teleservices Limited (TTSL) has not beendetermined as at 31st March 2017. We are therefore unable to comment on whether thecarrying value of: a) Investments in TTSL of Rs 384.88 crore represents the fair value ofsuch investments as at 31st March 2017 and the consequent impact thereof on OtherComprehensive Income and b) ‘Other advance' which represent TTSL shares receivablefrom DoCoMo under a contractual obligation of Rs 138.55 crore as at 31st March 2017represents the fair value of such shares and the consequent impact thereof on theStatement of Profit and Loss.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion paragraph above the aforesaid standalone Ind AS financial statementsgive the information required by the Act in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of Affairs of the Company as at 31st March 2017 and its Profit totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Emphasis of Matters

We draw attention to the following matters in the Notes to the standalone Ind ASfinancial statements:

(a) Note 37(d) to the standalone Ind AS financial statements which describesuncertainties relating to the outcome of the Appeal filed before the Hon'ble SupremeCourt. Pending outcome of the Appeal filed before the Hon'ble Supreme Court no adjustmenthas been made by the Company in respect of the standby charges estimated at Rs 519 croreaccounted for as revenue in earlier periods and its consequential effects for the periodupto 31st March 2017. The impact of the same on the standalone Ind AS financialstatements for the year ended 31st March 2017 cannot presently be determined pending theultimate outcome of the matter. Since the Company is of the view supported by legalopinion that the Tribunal's Order can be successfully challenged adjustment if anywill 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 taxmatter estimated at Rs 1967.43 crore (including interest of ` 643.99 crore and penaltyof Rs 740.89 crore) has been decided by the Hon'ble Bombay High Court against theCompany. The Company is of the view supported by legal opinions that it has a strongcase on merits and has appealed the matter before the Hon'ble Supreme Court. Adjustmentsif 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 basison which Management has considered that no impairment is necessary as at 31st March 2017for long term-investments of Rs 11136.15 crore in Coastal Gujarat Power Limited (CGPL)and no provision is required in respect of guarantees of Rs 2781.69 crore given to CGPL'slenders.

Our opinion is not modifified 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 theOther Matters paragraphs above we report to the extent applicable that:

a) We have sought and except for the matters described in the Basis for QualifiedOpinion paragraph above obtained all the information and explanations which to the bestof 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 QualifiedOpinion paragraph above in our opinion proper books of account as required by law havebeen kept by the Company.

c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d) Except for the possible effects of the matters described in the Basis for QualifiedOpinion paragraph above in our opinion the aforesaid standalone Ind AS financialstatements comply with the Indian Accounting Standards prescribed under section 133 of theAct.

e) The matters described in the Basis for Qualified Opinion paragraph and Emphasis ofMatters paragraphs above in our opinion may have an adverse effect on the functioning ofthe Company.

f) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms ofSection 164(2) of the Act.

g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.

h) With respect to the adequacy of the internal financial controls over financialreporting of the Company refer to our separate Report in "Annexure A". Ourreport expresses a qualified opinion on the operating effectiveness of the Company'sinternal financial controls over financial reporting.

i) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company. iv. The Company has providedrequisite disclosures in the standalone Ind AS financial statements as regards its holdingand dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the8th November 2016 of the Ministry of Finance during the period from 8th November 2016 to30th December 2016. Based on audit procedures performed and the representations providedto us by the management we report that the disclosures_are in accordance with the books ofaccount maintained 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 theOrder.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm's Registration No. 117366W/W-100018)

UDAYAN SEN

Partner

(Membership No. 031220)

MUMBAI 19th May 2017

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(h)under ‘Report on Other Legal and RegulatoryRequirements' of our report of even date) Report on the Internal Financial Controls OverFinancial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 ("the Act")

We have audited the internal financial controls over financial reporting of THE TATAPOWER COMPANY LIMITED ("the Company") as of 31st March 2017 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified opinion

According to the information and explanations given to us and based on our audit andas described in note [34(b) and 34 (c)] in the absence of a valuation report andappropriate evidence to determine the fair value as at 31st March 2017 of investment inTata Teleservices Limited (TTSL) a material weakness has been identified relating toinadequate internal financial controls over financial reporting in respect of theassessment of appropriateness of carrying amount of these investments.

Qualified Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects maintained adequate internal financialcontrols over financial reporting as of 31st March 2017 based on "the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India" and except for the possible effects of the material weaknessdescribed in Basis for Qualified Opinion paragraph above on the achievement of theobjectives of the control criteria the Company's internal financial controls overfinancial reporting were operating effectively as of 31st March 2017.

We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the standalone Ind ASfinancial statements of the Company for the year ended 31st March 2017 and the materialweakness has affected our opinion on the said standalone Ind AS financial statements ofthe Company and we have issued a qualified opinion on the standalone Ind AS financialstatements of the Company.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm's Registration No. 117366W/W-100018)

UDAYAN SEN Partner

(Membership No. 031220) MUMBAI 19th May 2017

ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a program of verification of fixed assets to cover all the items ina phased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain fixed assets were physically verified by the Management during the year. Accordingto the information and explanation given to us no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and the records examinedby 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 theimmovable properties of land and buildings which are freehold and property plant andequipment are held in the name of the Company as at the balance sheet date except thefollowing:

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 50000/-

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification.

(iii) According to the information and explanations given to us the Company hasgranted loans secured or unsecured to companies firms Limited Liability Partnershipsor other parties covered in the Register maintained under Section 189 of the CompaniesAct 2013 in respect of which: (a) The terms and conditions of the grant of such loansare 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 stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

(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 theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year. In respect of unclaimed deposits the Company hascomplied with the provisions of Sections 73 to 76 or any other relevant provisions of theCompanies Act. According to the information and explanations given to us no Order hasbeen passed by the Company Law Board or the National Company Law Tribunal or the ReserveBank of India or any Court or any other Tribunal.

(vi) The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013 for Generation transmission distribution andsupply of electricity regulated by the relevant regulatory body or authority under theElectricity Act 2003 (36 of 2003) other than for captive generation (as defined underthe Electricity Rules 2005) and machinery and mechanical appliances used in defence spaceand atomic energy sectors. We have broadly reviewed the cost records maintained by theCompany pursuant to the Companies (Cost Records and Audit) Rules 2014 as amendedprescribed by the Central Government under sub-section (1) of Section 148 of the CompaniesAct 2013 and are of the opinion that prima facie the prescribed cost records have beenmade and maintained. We have however not made a detailed examination of the cost recordswith a view to determine whether they are accurate or complete

(vii) According to the information and explanations given to us in respect ofstatutory dues: (a) The Company has generally been regular in depositing undisputedstatutory dues including provident fund employees' state insurance income-tax salestax service tax customs duty excise duty value added tax cess and other materialstatutory 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 exciseduty value added tax cess and other material statutory dues in arrears as at 31st March2017 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 dutyexcise duty and value added tax which have not been deposited as on 31st March 2017 onaccount of disputes are given below:

Name of the statute Nature of the dues Amount Period to which the amount relates Forum where dispute is pending
(Rs crore)
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 1967.43 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 usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions banks government and dues to debenture holders.

(ix) In our opinion and according to the information and explanations given to usmoney raised by way of initial public offer/ further public offer (including debtinstruments) and the term loans have been applied by the Company during the year for thepurposes for which they were raised.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its Officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable. (xiii) In our opinion and according to the informationand explanations given to us the Company is in compliance with Section 177 and 188 of theCompanies Act 2013 where applicable for all transactions with the related parties andthe details of related party transactions have been disclosed in the financial statementsetc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its holding subsidiary or associate company or personsconnected with them and hence provisions of Section 192 of the Companies Act 2013 are notapplicable.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants

(Firm's Registration No. 117366W/W-100018)

UDAYAN SEN Partner

(Membership No. 031220)

MUMBAI 19th May 2017