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India Power Corporation Ltd.

BSE: 532130 Sector: Infrastructure
NSE: DPSCLTD ISIN Code: INE360C01024
BSE 05:30 | 01 Jan India Power Corporation Ltd
NSE 00:00 | 26 Nov 24.00 4.00
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India Power Corporation Ltd. (DPSCLTD) - Auditors Report

Company auditors report

To

The Members of

India Power Corporation Limited (Formerly DPSC Limited)

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

OPINION

We have audited the accompanying Standalone financial statements of India PowerCorporation Limited (Formerly DPSC Limited) (‘the Company') which comprise theBalance Sheet as at 31 March 2019 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year then ended and notes to the Standalone financial statements including asummary of the significant accounting policies and other explanatory information (hereinafter referred to as "Standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31 March 2019 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act (SAs). Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the ethical requirements that are relevant to our audit of the Standalone financialstatements under the provisions of the Act and the Rules made there under and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

KEY AUDIT MATTERS

Key audit matters (KAM) are those matters that in our professional judgment were ofmost significance in our audit of the Standalone financial statements of the currentperiod. These matters were addressed in the context of our audit of the Standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Following are the Key Audit Matters (KAM) –

Sl. Key Audit Matter Auditor's Response
No.
1. Beneficial interest In Power Trust amounting to Rs. 82384.55 Lakhs considered as financial assets. The trust being an independent entity value of the said asset (beneficial interest) as considered has been taken based on report of an independent firm of chartered accountants appointed by the
Refer Note – 9.2 of the Standalone financial statement. Power Trust and the same has been relied upon for the purpose of these accounts and our opinion there upon.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Director's Report includingannexures to Director's Report but does not include the Standalone financial statementsand our auditor's report thereon.

Our opinion on the Standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. Based on therecords information and explanation provided we have nothing to report in this regard.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone financial statements that give a true and fair view and are free frommaterial misstatements whether due to fraud or error.

In preparing the Standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

AUDITOR'S RESPONSIBILITY FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the Standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the Standalonefinancial statements including the disclosures and whether the Standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the Standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonable knowledgeable user of the Standalone financial statements may be influenced. Weconsider quantitative and qualitative factors in (i) planning the scope of our audit workand in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the Standalone financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 Section 143(11) of the Act andaccording to the information and explanations given to us and also on the basis of suchchecks as we considered appropriate we give in the "Annexure A" a statement onthe 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 bestof our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of accounts as required by law have been kept by theCompany so far as it appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss (Including other comprehensiveIncome) Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account; d) In our opinion the aforesaidStandalone financial statements comply with the Indian Accounting Standards (Ind AS)specified under Section 133 of the Act read with relevant Rules issued thereunder;

e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164(2) of the Act;

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

As per the information and explanation given to us and on the basis of our examinationof the records the managerial remuneration has been paid or provided in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Act.

h) 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. Pending litigations (Other than those already recognised in the accounts) havingmaterial impact on the financial position of the Company have been disclosed in theStandalone financial statements as required in terms of the accounting standards andprovisions of the Act. (Refer Note 43 of the Standalone financial statements)

ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

For S. S. Kothari Mehta & Co.
Chartered Accountants
Firm Registration No. 000756N
Neeraj Bansal
Place: New Delhi Partner
Date: May 23 2019 Membership No. 095960

ANNEXURE – "A"TO THE INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OFINDIA POWER CORPORATION LIMITED (FORMELY DPSC LIMITED)

Report on the matters specified in paragraph 3 of the Companies (Auditor's Report)Order 2016 ("the Order') issued by the Central Government of India in terms ofsection 143(11) of the Companies Act 2013 ("the Act") as referred to inparagraph 1 of ‘Report on Other Legal and Regulatory Requirements' section

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) These fixed assets have been physically verified by the management according to aphased programme designed to cover all the items over a period of three years which inour opinion is reasonable having regard to the size of the company and nature of itsassets. In accordance with this programme fixed assets were physically verified by themanagement during the reporting period and no material discrepancies were noticed on suchverification; (c) According to the information explanations and representations providedto us and based on documents produced to us for our verification in our opinion exceptin the following cases title deeds of immovable properties are held in the name of theCompany. Lease deed has been taken as the basis for verification in respect of leaseholdland as well as self- constructed building thereupon.

Building

Total number of cases Gross Block as at 31.03.2019 Net Block as at 31.03.2019 Remarks
( Rs. in lakhs) ( Rs. in lakhs)
12 (TWELVE) CASES 166.67 140.32 These buildings have been constructed on land owned by others . (Refer note 5.2 of the Standalone financial statements)

(ii) As explained to us the inventories have been physically verified by the managementat reasonable intervals during the year. In our opinion the frequency of suchverification is reasonable. No material discrepancies were noticed on such physicalverification.

(iii) The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnership or other parties covered in the register maintained undersection 189 of the Act. Accordingly paragraph 3(iii) (a) to (c) of the order is notapplicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act in respect ofloans investments guarantees or securities wherever transacted and applicable.

(v) The Company has not accepted any deposits and hence the directives issued by theReserve Bank of India and the provisions of sections 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder are not applicable.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the Rules made by Central Government for the maintenance of cost records under section148(1) of the Act and are of the opinion that prima facie the prescribed records havebeen made and maintained. We however have not made a detailed examination of the saidrecords with a view to determine whether they are accurate or complete.

(vii) (a) According to information and explanations given to us and the records of thecompany examined by us in our opinion the Company is generally regular indepositing undisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax duty of customs duty of excise value added tax goods andservice tax cess and any other statutory dues except in case of Electricity Dutywhere Company has generally delayed in making payments to the appropriate authorities.There are no arrears of outstanding undisputed statutory dues as on the last day ofthe financial year concerned for a period of more than six months from the date they becamepayable.

(b) According to information and explanations given to us and the records of thecompany examined by us the dues outstanding in respect of income tax sales tax servicetax duty of customs duty of excise goods and service tax and cess as at 31 March 2019on account of disputes are as follows:

Name of Statute Nature of Dues Amount ( Rs. . In lakhs.) Forum where dispute is pending Period to which the amount relates
Finance Act 1994 Service tax 21.49 Commissioner of service tax (Appeals) FY 2008-2009 to F.Y. 2012-2013

(viii) The Company has not defaulted in repayment of loans or borrowing to a financialinstitution bank Government or dues to debenture holders.

(ix) No money has been raised by way of initial public offer or further public offer(including debt instruments). Further the term loans raised by the Company during theyear were applied for the purpose for which they were obtained.

(x) To the best of our knowledge and according to information and explanations given tous no fraud by the Company or no fraud on the Company by its officers or employees hasbeen noticed or reported during the year.

(xi) The managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct.

(xii) The Company is not a Nidhi Company hence clause (xii) of the Order is notapplicable to the Company.

(xiii) According to the information and explanation given to us and on the basis ofour examination of the records the company has transacted with the related parties whichare in compliance with sections 177 and 188 of the Act and the details have been disclosedin the financial statements – Refer Note 46 to the Standalone financial statements.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year and hence paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) The Company has not entered into non-cash transactions with directors or personsconnected with the directors and therefore provisions of section 192 of the Act are notapplicable.

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

For S. S. Kothari Mehta & Co.
Chartered Accountants
Firm Registration No. 000756N
Neeraj Bansal
Place: New Delhi Partner
Date: May 23 2019 Membership No. 095960

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF INDIA POWERCORPORATION LIMITED (FORMELY DPSC LIMITED)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") as referred to in paragraph 2(f) of‘Report on Other Legal and Regulatory Requirements' section

We have audited the internal financial controls over financial reporting of India PowerCorporation Limited (Formerly DPSC Limited) ("the Company") as at March 31 2019in conjunction with our audit of the Standalone Ind AS financial statements of the Companyfor the year ended 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". 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 Act.

AUDITORS' 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 accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the "Guidance Note") and theStandards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) ofthe Act to the extent applicable to an audit of internal financial controls bothapplicable to an audit of Internal Financial Controls and both issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the Standalone 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 audit opinion on the Company's internal financial controls systemover 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 Standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that:

(a) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(b) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of Management and directors of the Company; and

(c) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the Standalone 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.

OPINION

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on"the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India".

For S. S. Kothari Mehta & Co.
Chartered Accountants
Firm Registration No. 000756N
Neeraj Bansal
Place: New Delhi Partner
Date: May 23 2019 Membership No. 095960

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