To the members of RattanIndia Power Limited (formerly Indiabulls Power Limited.) Reporton the Audit of the Standalone Financial Statements Qualified Opinion
1. We have audited the accompanying standalone financial statements of RattanIndiaPower Limited (formerly Indiabulls Power Limited.) (the Company') which comprisethe Balance Sheet as at 31 March 2019 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information.
2. 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 section of our report the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 (Act') in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including Indian Accounting Standards (Ind AS')specified under section 133 of the Act of the state of affairs (financial position) ofthe Company as at 31 March 2019 and its loss (financial performance including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.
Basis for Qualified Opinion
3. As explained in Note 55 to the accompanying standalone financial statements theCompany has a non-current investment of र 302621.55 lakhs in inter corporatedeposits (classified as loans under current financial assets) of र 5098.36 lakhs andtrade receivable of र 532.65 lakhs recoverable from Sinnar Thermal Power Limited(formerly RattanIndia Nasik Power Limited) (STPL) a wholly-owned subsidiary of theCompany as at 31 March 2019. The subsidiary company has incurred losses since itsinception and is yet to commence operations. The accumulated losses in the subsidiarycompany amount to र 377824.45 lakhs as at 31 March 2019 and the management of thesubsidiary company has determined that a material uncertainty exists as at 31 March 2019that may cast significant doubt about the subsidiary company's ability to continue as agoing concern. The management of the Company based on an internal estimate has recordedan impairment against carrying value of investment in STPL amounting to र 151310.77lakhs and has also written off aforementioned balances of inter corporate depositsamounting to र 4848.36 lakhs and trade receivables of र 532.65 lakhs. In theabsence of evidence for such impairment assessment performed by the management we areunable to obtain sufficient appropriate evidence to comment on any adjustment that mayfurther be required to be made to the balance carrying value of the above mentionednon-current investment as at 31 March 2019 and the consequential impact thereof on theaccompanying standalone financial statements.
4. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.
Material Uncertainty Related to Going Concern
5. We draw attention to Note 53 to the standalone financial statements which indicatesthat the Company has incurred a net loss of र 279152.62 lakhs during the year ended31 March 2019 and as of that date the Company's accumulated losses amounts to र411673.83 lakhs and the Company's current liabilities exceed its current assets by र285867.93 lakhs. The Company has also made defaults in repayment of borrowings frombanks including interest by an amount aggregating र 237051.14 crores till 31 March2019. These conditions along with other matters as set forth in such note indicate theexistence of material uncertainty that may cast significant doubt about the Company'sability to continue as a going concern. However in view of withdrawal of the petitionbefore the National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code 2016by the lender banks on 14 May 2019 the ongoing discussions relating to restructuring ofits borrowings and other debts with the lenders which includes a binding One TimeSettlement (OTS) offer made by the Company based on identification of new investors andinfusion of funds by the promoters better financial performance as a result of favourablebusiness conditions expected in future and other mitigating factors mentioned in theaforesaid note the management is of the view that going concern basis of accounting isappropriate for preparation of the accompanying standalone financial statements. Ouropinion is not modified in respect of this matter.
The above assessment of the Company's ability to continue as going concern is by itsnature considered as key audit matter in accordance with SA 701 In relation to the abovekey audit matter our audit work included but was not limited to the followingprocedures: a) Obtained understanding of the management's process for identifying allevents or conditions that could impact the Company's ability to continue as a goingconcern and the process to assess the corresponding mitigating factors existing againsteach such event or condition. b) Evaluated the design and tested the operatingeffectiveness of key controls around aforesaid identification of events or conditions andmitigating factors and controls around cash flow projections prepared by the management.c) Tested the appropriateness of the key assumptions in the cash flow projections for next12 months by considering our understanding of the business past performance of theCompany external data and market conditions apart from discussing these assumptions withthe management and the Audit Committee. d) Evaluated the sensitivity analysis performed bythe management in respect of the key assumptions discussed above to ensure that there wassufficient headroom with respect to the estimation uncertainty impact of such assumptionson the calculation. e) Tested the arithmetical accuracy of the calculations includingthose related to sensitivity analysis performed by the management. f) Evaluated thehistorical accuracy of the cash flow projections made by the management in prior periods.g) Reviewed the minutes of meetings of lenders binding offer correspondence withproposed investors etc. with respect to the status of OTS offer. h) Evaluated theappropriateness of the disclosures made in the financial statements in respect of goingconcern basis of accounting in accordance with the applicable accounting standards.
Emphasis of Matter
6. We draw attention to Note 54 to the accompanying standalone financial statementswith respect to capital work-in-progress (CWIP) aggregating to र 54657.35 lakhsoutstanding as at 31 March 2019 pertaining to construction of second 1350 MW power plant(Phase II) of the Company which is currently suspended. Based on expected revival of theproject and other factors described in the aforesaid note the management believes that noadjustment is required to the carrying value of the aforesaid balances. Our audit opinionis not modified in respect of this matter.
Key Audit Matter
7. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current year.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
8. In addition to the matter described in the Basis for Qualified Opinionand MaterialUncertainty Related to Going Concern sections we have determined the matters describedbelow to be the key audit matters to be communicated in our report.
|Recoverability of amounts due from Maharashtra State Electricity Distribution Company Limited (MSEDCL) ||Our audit work in relation to assessment of recoverability of amounts due from MSEDCL included but was not limited to the following: |
|The Company has dues from MSEDCL amounting to Rs. 123297.03 lakhs as at 31 March 2019. || Obtained an understanding of the nature of litigations and key developments during the year from the management. |
|As detailed in Note no 32(C) to the standalone financial statements there are certain claims by the Company which are disputed by MSEDCL including claim on account of Compensatory Claim (CCEA) amounting to Rs. 28658.80 lakhs and Late Payment Surcharge (LPS) thereon and Change- in-law (CIL) Claims. These are under litigation at various levels of regulatory authorities. || Tested the design implementation and operating effectiveness of the controls that the Company has established in relation to recoverability of such dues. |
|The Company has obtained a legal opinion from an independent counsel with respect to recoverability of Rs. 28658.80 lakhs on account of CCEA claims and LPS thereon. || Evaluated the reasonableness of the key assumptions used by the management in determination of recoverable amount based on our knowledge of the business and industry. |
| || Obtained legal opinion from the Company's external legal counsel and analysed the same in light of the current industry practice. |
|Further in respect of claim related to CIL the Maharashtra Electricity Regulatory Commission vide order dated 3 April 2018 has decided a methodology for computing the quantum of claim which is disputed by the Company and the matter is pending for resolution under Appellate Tribunal for Electricity. || Obtained and reviewed the necessary evidence which includes correspondence with the internal legal counsels and where necessary inspected minutes of case proceedings available in public domain to support the decisions and rationale for creation of provisions and / or disclosure of receivables in respect of each such litigation selected for testing. |
|Considering the materiality of the balances to the Company's standalone financial statements and the judgements involved in the estimation of recoverability this matter is considered to be a key audit matter for the current year audit. || Ensured appropriateness of disclosures made in the financial statements with respect to the receivables are in accordance with the applicable accounting standards. |
|Impairment of power plant at Amravati ||Our audit procedures included but were not limited to the following: |
|Refer Note 3 for the accounting policies for impairment of assets. The Company has a power generating plant and allied facilities valuing र 639000.41 lakhs and र 64591.69 lakhs respectively. || Obtained an understanding of the management process and performed a walkthrough to evaluate design effectiveness and tested the operating effectiveness of key controls for identifying impairment indicators as well as determining the appropriate methodology to carry out impairment testing for plant property and equipment. |
|In accordance with Ind AS 36 Impairment of assets the management identified that impairment indicators existed for the power plant owing to the fact that there has been less than full capacity utilisation of the plant since the commencement of operations and currently the plant is operating at around 34% capacity. || Evaluated the appropriateness of applying relevant accounting standards in recognising the impairment loss. |
|The aforesaid assessment of the impairment involves exercising a significant judgement with regard to assumptions and estimates involved in forecasting future cash flows. These assumptions include plant operating level discount rates estimation of terminal value. || Challenged the management on the underlying assumptions used for the cash flow projections including the implied growth rates discount rate estimation of terminal value etc. considering the evidence available to support these assumptions and our understanding of the business and industry. |
|Changes in the management forecasts or assumptions can impact the assessment of the discounted cash flows and consequently the valuation of such power plant. || Tested the discount rate and plant operating level used in the forecasts including comparison to economic and industry forecasts where appropriate. |
|A significant amount of audit effort was required particularly as some of these assumptions are dependent on the economic factors and trading conditions in the markets in which the Company operates. Considering the significance of the amounts involved degree of judgement and subjectivity involved in the estimates and key assumptions used in determining the cash flows used in the impairment evaluation we have determined impairment of power generating plant as a key audit matter. || Evaluated the sensitivity analysis performed by the management in respect of the key assumptions discussed above to ensure that there was sufficient headroom with respect to the estimation uncertainty impact of such assumptions on the calculation. |
| || Ensured that disclosures for the aforesaid balances and transactions are adequately disclosed in accordance with the applicable accounting standards. |
|Litigation and contingent liabilities ||Our audit procedures included but were not limited to the following: |
|We refer to the Note 32 of the standalone financial statements of the Company for the year ended 31 March 2019. The Company operates in an industry which is heavily regulated which increases inherent risk of litigations. There are a number of legal and regulatory cases of which the most significant ones are claims by the Company on MSEDCL as explained in the KAM on recoverability from MSEDCL and claims by the vendors / suppliers on the Company. || Obtained an understanding of the management process for: |
| ||- identification of legal and tax matters initiated against the Company; |
| ||- assessment of accounting treatment for each such litigation identified under Ind AS 37 accounting principles; and |
| ||- for measurement of amounts involved. |
|The eventual outcome of these legal proceedings is dependent on the outcome of future events and unexpected adverse outcomes could significantly impact the Company's reported profits and balance sheet position. || Evaluated the design and tested the operating effectiveness of key controls around above process. |
|The amounts involved are material and the application of accounting principles as given under Ind AS 37 Provisions Contingent Liabilities and Contingent Assets in order to determine the amount to be recorded as a liability or to be disclosed as a contingent liability in each case is inherently subjective and needs careful evaluation and judgement to be applied by the management. || Obtained an understanding of the nature of litigations pending against the Company and discussed the key developments during the year for key litigations with the management and respective legal counsels handling such cases on behalf of the Company. |
| || Obtained and reviewed the necessary evidence which includes correspondence with the external and internal legal counsels wherever applicable and inspected minutes of case proceedings available in public domain to support the decisions and rationale for creation of provisions and / or disclosure of contingent liabilities in respect of each such litigation selected for testing. |
|Key judgments are also made by the management in estimating the amount of liabilities provisions and/or contingent liabilities related to aforementioned litigations. ||We focused on the developments in the existing litigations and new litigations which could have materially impacted the amounts recorded as provisions or disclosed as contingent liability in the standalone financial statements. |
|Considering the degree of judgment significance of the amounts involved inherent high estimation uncertainty and reliance on external legal and tax experts this matter has been identified as a key audit matter for the current year audit. || |
| || Assessed management's conclusions through discussions held with the in-house legal counsel and understanding precedents set in similar cases. |
| || Obtained and read the correspondence with the regulatory authorities including past judgements on the subject matter of specific significant litigations. |
| || Assessed the appropriateness of methods used and the reliability of underlying data for the underlying calculations made for quantifying the amounts involved. Tested the arithmetical accuracy of such calculations. |
| || Evaluated the adequacy of disclosures made by the Company in the financial statements in view of the requirements as specified in the Indian Accounting Standards. |
Information other than the Financial Statements and Auditor's Report thereon
9. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon. The Annual Report is expectedto be made available to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
10. 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 state of affairs (financial position) loss(financial performance including other comprehensive income) changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Ind AS specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
11. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. 12. Those Board of Directors are also responsible for overseeingthe Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
13. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
14. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for explaining our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
15. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
16. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
17. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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
18. As required by section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under section 197 read with Schedule V to the Act.
19. 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 we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.
20. Further to our comments in Annexure A as required by section 143(3) of the Act wereport that: a) we have sought and except for the possible effect of the matter describedin the Basis for Qualified Opinion paragraph obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposeof our audit; b) except for the possible effects of the matter described in the Basis forQualified Opinion paragraph in our opinion proper books of account as required by lawhave been kept by the Company so far as it appears from our examination of those books; c)the standalone financial statements dealt with by this report are in agreement with thebooks of account; d) except for the possible effects of the matter described in the Basisfor Qualified Opinion paragraph in our opinion the aforesaid standalone financialstatements comply with Ind AS specified under section 133 of the Act; e) the mattersdescribed in paragraph 3 under the Basis for Qualified Opinion paragraph and paragraph 5under Material Uncertainty Related to Going Concern and paragraph 6 under the Emphasis ofMatters paragraph in our opinion may have an adverse effect on the functioning of theCompany; f) on the basis of the written representations received from the directors andtaken on record by the Board of Directors none of the directors is disqualified as on 31March 2019 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 connectedtherewith are as stated in the Basis for Qualified Opinion paragraph; h) we have alsoaudited the internal financial controls over financial reporting (IFCoFR) of the Companyas on 31 March 2019 in conjunction with our audit of the standalone financial statementsof the Company for the year ended on that date and our report dated 20 May 2019 as perAnnexure B expressed modified opinion; and i) with respect to the other matters to beincluded in the Auditor's Report in accordance with rule 11 of the Companies (Audit andAuditors) Rules 2014 (as amended) in our opinion and to the best of our information andaccording to the explanations given to us: i. the Company as detailed in Note 32(A) and32(B) to the standalone financial statements has disclosed the impact of pendinglitigations on its financial position as at 31 March 2019; ii. the Company did not haveany long-term contracts including derivative contracts for which there were any materialforeseeable losses as at 31 March 2019; iii. there were no amounts which were required tobe transferred to the Investor Education and Protection Fund by the Company during theyear ended 31 March 2019; and iv. the disclosure requirements relating to holdings as wellas dealings in specified bank notes were applicable for the period from 8 November 2016 to30 December 2016 which are not relevant to these standalone financial statements. Hencereporting under this clause is not applicable.
| ||For Walker Chandiok & Co LLP |
| ||Chartered Accountants |
| ||Firm's Registration No.: 001076N/N500013 |
| ||Rohit Arora |
|Place : New Delhi ||Partner |
|Date : 20 May 2019 ||Membership No.: 504774 |
Annexure A to the Independent Auditor's Report of even date to the members ofRattanIndia Power Limited (formerly Indiabulls Power Limited.) on the standalone financialstatements for the year ended 31 March 2019 Annexure A
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that: (i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant andequipment.
(b) The Company has a regular program of physical verification of its property plantand equipment under which fixed assets are verified in a phased manner over a period ofthree years which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. In accordance with this program certain fixed assets wereverified during the year and no material discrepancies were noticed on such verification.(c) The title deeds of all the immovable properties (which are included under the headProperty plant and equipment') are held in the name of the Company except for thefollowing properties:
| || || || ||(Amount in र Lakhs) |
|Nature of property ||Total number of cases ||Whether leasehold/ freehold ||Gross block as on 31 March 2019 ||Net block on 31 March 2019 |
|Land ||1 ||Freehold ||337.35 ||337.35 |
(ii) In our opinion the management has conducted a physical verification of inventoryat reasonable intervals during the year except for goods-in-transit and stocks lying withthird parties. For stock lying with the third parties at the year-end writtenconfirmations have been obtained by the management. No material discrepancies were noticedon the aforesaid verification.
(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii)(c) of the Order are not applicable.
(iv) In our opinion the Company has complied with the provisions of Sections 185 and186 of the Act in respect of loans investments guarantees and security.
(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.
(vii) (a) The Company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax cess and other material statutory dues asapplicable to the appropriate authorities. Further no undisputed amounts payable inrespect thereof were outstanding at the year-end for a period of more than six months fromthe date they become payable.
(b) There are no dues in respect of income-tax sales-tax service tax duty ofcustoms duty of excise and value added tax that have not been deposited with theappropriate authorities on account of any dispute.
(viii) There are no loans or borrowings payable to government and no dues payable todebenture-holders. The Company has defaulted in repayment of loans/borrowings to thefollowing banks and financial institutions:
Statement of defaults in repayment of borrowings from banks and financial institutionsthat are not paid as at Balance Sheet date:
| || || || |
(Amount in र Lakhs)
|Name of bank/financial ||0-3 months ||3-6 months ||6-12 months ||More than |
|institution || || || ||12 months |
|Banks || || || || |
|Axis Bank ||470.76 ||- ||- ||- |
|Bank of India ||901.00 ||901.22 ||1702.30 ||1966.11 |
|Canara Bank ||538.36 ||538.36 ||1076.72 ||1794.53 |
|Central Bank of India ||518.00 ||239.00 ||- ||- |
|IDBI Bank ||- ||3750.00 ||4605.97 ||5000.00 |
|ICICI Bank ||- ||- ||- ||1795.82 |
|Punjab National Bank ||901.00 ||901.22 ||1802.43 ||3003.89 |
|State Bank of Bikaner & Jaipur ||189.61 ||189.61 ||379.22 ||632.03 |
|State Bank of India ||1949.00 ||1948.50 ||3897.00 ||6495.00 |
|State Bank of Travancore ||269.19 ||269.19 ||538.38 ||897.30 |
|Syndicate Bank ||362.84 ||362.84 ||168.12 ||- |
|UCO Bank ||608.00 ||275.48 ||- ||- |
|United Bank of India ||422.42 ||422.42 ||844.83 ||803.34 |
|Financial institutions || || || || |
|Life Insurance Corporation ||598.18 ||598.18 ||682.35 ||- |
|Power Finance Corporation ||5355.98 ||5355.98 ||4162.95 ||- |
|Rural Electrification Corporation ||1778.94 ||1571.98 ||- ||- |
(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained though idle funds which were not required forimmediate utilisation have been invested in liquid investments payable on demand.
(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the Company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.
(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable. (xiii) In our opinion all transactions withthe related parties are in compliance with Sections 177 and 188 of Act where applicableand the requisite details have been disclosed in the financial statements etc. asrequired by the applicable Ind AS. (xiv) During the year the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures.
(xv) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
| ||For Walker Chandiok & Co LLP |
| ||Chartered Accountants |
| ||Firm's Registration No.: 001076N/N500013 |
| ||Rohit Arora |
|Place : New Delhi ||Partner |
|Date : 20 May 2019 ||Membership No.: 504774 |
Annexure B to the Independent Auditor's Report of even date to the members ofRattanIndia Power Limited (formerly Indiabulls Power Limited.) on the standalone financialstatements for the year ended 31 March 2019 Annexure B
Independent Auditor's report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act')
1. In conjunction with our audit of the standalone financial statements of RattanIndiaPower Limited (formerly Indiabulls Power Limited.) (the Company') as of and for theyear ended 31 March 2019 we have audited the internal financial controls over financialreporting (IFCoFR) of the company of as of that date.
Management's Responsibility for Internal Financial Controls
2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (Guidance Note') issued by the Institute of Chartered Accountants of India(ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the company's business including adherence to company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of IFCoFR and the Guidance Note issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate IFCoFR wereestablished and maintained and if such controls operated effectively in all materialrespects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCoFR 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
7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
8. We have not been provided sufficient and appropriate audit evidence with respect toassessment of the carrying value of
investment in a wholly owned subsidiary. In the absence of sufficient audit evidencewe are unable to comment on adequacy and operating effectiveness of controls over theimpairment assessment process and it's the potential impact on carrying value ofinvestment and the consequential impact on the accompanying standalone financialstatements.
9. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting as at 31 March 2019 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note issued by ICAI exceptfor the possible effect of the material weakness described above on the achievement of theobjectives of the control criteria the Company's internal financial controls overfinancial reporting were operating effectively as at 31 March 2019.
10. We have considered the material weakness identified and reported above indetermining the nature timing and extent of audit tests applied in our audit of thestandalone financial statements of the Company as at and for the year ended 31 March 2019and the material weakness has affected our opinion on the standalone financial statementsof the Company and we have issued a qualified opinion on the standalone financialstatements.
| ||For Walker Chandiok & Co LLP |
| ||Chartered Accountants |
| ||Firm's Registration No.: 001076N/N500013 |
| ||Rohit Arora |
|Place : New Delhi ||Partner |
|Date : 20 May 2019 ||Membership No.: 504774 |