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Reliance Power Ltd.

BSE: 532939 Sector: Infrastructure
NSE: RPOWER ISIN Code: INE614G01033
BSE 00:00 | 25 Sep 2.89 0.25
(9.47%)
OPEN

2.66

HIGH

2.90

LOW

2.65

NSE 00:00 | 25 Sep 2.90 0.25
(9.43%)
OPEN

2.65

HIGH

2.90

LOW

2.60

OPEN 2.66
PREVIOUS CLOSE 2.64
VOLUME 5793579
52-Week high 5.23
52-Week low 1.00
P/E 144.50
Mkt Cap.(Rs cr) 811
Buy Price 2.90
Buy Qty 95908.00
Sell Price 2.89
Sell Qty 5860.00
OPEN 2.66
CLOSE 2.64
VOLUME 5793579
52-Week high 5.23
52-Week low 1.00
P/E 144.50
Mkt Cap.(Rs cr) 811
Buy Price 2.90
Buy Qty 95908.00
Sell Price 2.89
Sell Qty 5860.00

Reliance Power Ltd. (RPOWER) - Auditors Report

Company auditors report

To the Members of Reliance Power Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Reliance Power Limited (the Company) which comprise the standalone balance sheet as at March 31 2020 and the standalone statement of profit and loss (including other comprehensive income) standalone statement of changes in equity and standalone statement of cash flows for the year then ended and notes to the standalone financial statements including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the standalone financial statements).

In our opinion and to the best of our information and according to the explanations given to us the aforesaid standalone financial statements give the information required by the Companies Act 2013 (Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31 2020 and loss and other comprehensive loss changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the standalone financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 23 of the standalone financial statements wherein the Company has incurred loss during the current year as well as in the previous year excess of current liabilities over current assets and loans that have fallen due for repayments and the loans which have been fallen due of subsidiary companies for which the Company is guarantor indicate that material uncertainty exists that may cast a significant doubt on the Company's ability to continue as a going concern. However for the reasons more fully described in the aforesaid note the accounts of the Company have been prepared as a Going Concern. Our opinion is not modified in respect of this matter.

Emphasis of Matter

We draw attention to Note 26 of the standalone financial statements as regards to the management evaluation of COVID - 19 impact on the future performance of the Company. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. In addition to the matters described in the Material Uncertainty Related to Going Concern section we have determined the matters described below to be the key audit matters to be communicated in our report.

The Key Audit MatterHow the matter was addressed in our audit
Investments - evaluation of fair value of investments
Besides obtaining an understanding of management's processes and controls with regard to testing the impairment of investment in unquoted equity and preference instruments in subsidiaries our procedures included the following:
The Company has investments in subsidiaries and associates. These investments are recognised at fair value through other comprehensive income. Determination of fair value is subject to a significant level of judgement. Therefore there is a risk that the value of investments may be misstated. Refer to note 3.3 (a) - Investments of the standalone financial statements.  Perused fair valuation reports of significant investments obtained from an independent external valuation expert engaged by the Company.
 Evaluated the appropriateness of the Company's assumptions with comparable benchmarks in relation to key inputs such as long-term growth rates and discount rates;
 Assessed the appropriateness of the forecast cash flows within the budgeted period based on our understanding of the business;
 Considered historical forecasting accuracy by comparing previously forecasted cash flows to actual results achieved;
 Performed a sensitivity analysis in relation to key assumptions; and
 Evaluated the appropriateness of the related disclosures in Note 3.3 (a) of the standalone financial statements.

Loans and advances and Other Receivables - evaluation of adequacy of provision for loans and advances given

Our procedures included the following:
 Obtained independent confirmation of balances outstanding from recipients and traced the amounts confirmed to the books of account;
The Company have granted loans and advances to subsidiaries and other companies and also have receivables from various parties. These loans and receivables are tested for impairment annually. If impairment exists the recoverable amounts of the loans and receivables are estimated in order to determine the extent of the impairment loss if any. Determination of whether there exists any impairment in the value of loans is subject to a significant level of judgment. There is therefore a risk that the value of loans may be misstated. Refer to note no. 3.3(b) and 3.5(d) - of the standalone financial statements.  Verified whether the requisite approvals were obtained for the loan given and ensured other compliances as required by the applicable regulation.
 Perused the audited financial statements of those entities to evaluate whether its net assets being an approximation of its minimum recoverable amount were in excess of the amounts due for assessing the repayment capability of the concerned entity;
 Verified the adequacy of the provision made by management where applicable
 Evaluated the adequacy of the related disclosures in note no. 3.3(b) and 3.5(d) of the standalone financial statements.

Other Information

The Company's Board of Directors is responsible for the other information. The other information comprises the information included in Company's annual report but does not include the standalone financial statements and our auditor's report thereon. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the standalone financial statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If based on the work we have performed we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs profit/loss and other comprehensive income / (loss) changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management and Board of Directors are responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

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

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

 Identify and assess the risks of material misstatement of the standalone financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

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

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

 Evaluate the overall presentation structure and content of the standalone financial statements including the disclosures and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 (the Order) issued by the Central Government in terms of section 143 (11) of the Act we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

(A) As required by section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The standalone balance sheet the standalone statement of profit and loss (including other comprehensive income) the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act read with relevant rules made thereunder.

e) On the basis of the written representations received from the directors as on March 31 2020 taken on record by the Board of Directors none of the directors is disqualified as on March 31 2020 from being appointed as a director in terms of section 164(2) of the Act.

f) The going concern matter described in Material Uncertainty Related to Going Concern Section above in our opinion may have an adverse effect on the functioning of the Company.

g) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure B.

h) With respect to the matter to be included in the Auditors' Report under section 197(16) of the Act: In our opinion and according to the information and explanations given to us the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by provisions of section 197 read with Schedule V to the Act. The Ministry of Corporate Affairs has not prescribed other details under section 197(16) of the Act which are required to be commented upon by us.

(B) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations as at March 31 2020 on its financial position in its standalone financial statements - Refer Note 4 to the standalone financial statements;

b) The Company has made provision as required under the applicable law or accounting standards for material foreseeable losses if any on long-term contracts including derivative contracts.

c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company; and

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For Pathak H. D. & Associates LLP

Chartered Accountants

Firm's Registration No:107783W/W100593

Vishal D. Shah

Partner

Membership No:119303

UDIN: 20119303AAAACU5315

Place: Mumbai

Date: May 08 2020

Referred to in paragraph 1 under `Report on Other Legal and Regulatory Requirements' section of our report in the Independent Auditors' Report of even date to the Members of Reliance Power Limited on the standalone financial statements as of and for the year ended March 31 2020

i. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) According to the information and explanations given to us and records examined by us the title deeds of freehold land are in the name of erstwhile company i.e. Reliance Clean Power Limited which has merged with the Company under Section 391 to 394 of the Companies Act 1956 pursuant to the scheme of amalgamation approved by Honorable High Court with an appointed date of April 01 2012.

ii. The Company does not hold any inventory. Accordingly the provisions of Clause 3(ii) of the said Order are not applicable to the Company.

iii. In our opinion and according to the information and explanations given to us the Company has not granted any loans secured or unsecured to any company firm limited liability partnership or other party covered in the register maintained under Section 189 of the Act. Accordingly the provisions stated in paragraph 3(iii)(a)(b) & (c) of the Order are not applicable.

iv. Based on the information and explanations given to us in respect of loans investments guarantees and securities the Company has complied with the provisions of Sections 185 and 186 of the Act to the extent applicable.

v. In our opinion and according to the information and explanations given to us the Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the Rules framed there under. Accordingly paragraph 3(v) of the Order is not applicable to the Company.

vi. We have broadly reviewed the books of account maintained by the Company in respect of sale of electricity where the maintenance of cost records has been specified by the Central Government under subsection (1) of Section 148 of the Act and the rules framed there under and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not however made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us in our opinion the Company is generally regular in depositing the undisputed statutory dues in respect of income tax though there has been a slight delay in a few cases and is regular in depositing undisputed statutory dues including provident fund goods and services tax and other material statutory dues as applicable with the appropriate authorities. There are no undisputed amounts payable in respect of such applicable statutory dues as at March 31 2020 for a period of more than six months from the date they became payable. As explained to us the Company did not have any dues on account of value added tax employee state insurance sales tax cess duty of customs and duty of excise. Refer Note 4 of standalone financial statements.

(b) According to the information and explanations given to us and the records of the Company examined by us the particulars of dues of income-tax and entry tax as at March 31 2020 which has not been deposited on account of dispute is as under:

Name of StatuteNature of DuesAmount (Rs in lakhs)Period to which it relatesForum where dispute is pending
Income Tax Act 1961Income Tax474A.Y. 2011-12Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai
Income Tax Act 1961Income Tax19A.Y. 2012-13Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai
Income Tax Act 1961Income Tax2921A.Y. 2014-15Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai
Income Tax Act 1961Income Tax1935A.Y. 2015-16Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai
Income Tax Act 1961Income Tax2380A.Y. 2016-17Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai
Income Tax Act 1961Income Tax3241A.Y. 2017-18Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai
Subtotal (a)10970
Maharashtra Tax on the Entry of Goods into Local Areas Act 2002Entry Tax114F.Y. 2010-11Deputy Commissioner of Income Tax Bilaspur
Subtotal (b)114
Total (a+b)11084

viii. In our opinion and according to the information and explanations given to us the Company has not defaulted in repayment of loans or borrowings to financial institutions and banks and in payment of dues to the debenture holders except for the following instances of default in repayment of principal amounts and interest:

Name of Lender

Borrowings

Interest

Amount (Rs in lakhs)Period (Maximum days)Amount (Rs in lakhs)Period (Maximum days)
I Loan from Banks
1 Axis Bank370892481123
2 Yes Bank5032542610206426
3 Axis Bank - Gift City231--
4 IDBI Bank--541
5 ICICI Bank172134404211426
II Non Convertible Debentures
6 Yes Bank--6761186
7126921713

The Company did not have any loans or borrowings from Government during the year.

ix. According to the information and explanations given to us and based on our examination of the records of the Company the Company has not raised any monies by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly paragraph 3(ix) of the Order is not applicable to the Company.

x. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees noticed or reported during the year nor have we been informed of any such instance by the management.

xi. In our opinion and according to the information and explanations given to us the Company has paid / provided managerial remuneration in accordance with the provisions of Section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us the Company is not a Nidhi Company and accordingly the provisions of the clause 3(xii) of the Order are not applicable.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company in our opinion transactions entered into by the Company with the related parties are in compliance with Sections 177 and 188 of the Act. The details of related party transactions as required under Ind AS 24 Related Party Disclosures specified under Section 133 of the Act have been disclosed in the standalone financial statements. xiv. During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us during the year the Company has not entered into any non-cash transactions with its directors or persons connected with them. Accordingly the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company as legally advised is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are not applicable to the Company. (Refer note 7 of the standalone financial statements).

For Pathak H. D. & Associates LLP

Chartered Accountants

Firm's Registration No:107783W/W100593

Vishal D. Shah

Partner

Membership No:119303

UDIN: 20119303AAAACU5315

Place: Mumbai

Date: May 08 2020

Annexure B to Independent Auditors' Report

Annexure B to the Independent Auditor's Report on the standalone financial statements of Reliance Power Limited for year ended March 31 2020 Report on the Internal Financial Controls with reference to the aforesaid standalone financial statements under clause (i) of sub-section 3 of section 143 of the Companies Act 2013 (Referred to in Paragraph 1(A)(g) under `Report on Other Legal and Regulatory Requirements' section of our report of even date)

We have audited the internal financial controls with reference to standalone financial statements of Reliance Power Limited (the Company) as of March 31 2020 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (Guidance Note) issued by the Institute of Chartered Accountants of India (ICAI'). These responsibilities include the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to company's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls with reference to standalone financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements were established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of such internal financial controls assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement including the assessment of the risks of material misstatement of the standalone financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls with reference to standalone financial statements.

Meaning of Internal Financial controls with Reference to Financial Statements

A company's internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial controls with reference to financial statements include those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition use or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial controls with Reference to Financial Statements

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

Opinion

In our opinion and to the best of our information and explanation given to us the Company has in all material respects maintained adequate internal financial controls with reference to standalone financial statements and such internal financial controls with reference to financial statements were operating effectively as of March 31 2020 based on the internal control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India

For Pathak H. D. & Associates LLP

Chartered Accountants

Firm's Registration No:107783W/W100593

Vishal D. Shah

Partner

Membership No:119303

UDIN: 20119303AAAACU5315

Place: Mumbai

Date: May 08 2020