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 312021 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone 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 "the 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 accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2021 and profits and othercomprehensive 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 (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs 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 (the"ICAI") together with the ethical requirements that are relevant to our audit ofthe standalone financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note no. 23 of the standalone financial statements wherein theCompany has loans that have fallen due for repayments and the loans which have been fallendue of subsidiary companies for which the Company is a guarantor and its currentliabilities exceeds current assets indicate that material uncertainty exists that may casta significant doubt on the Company's ability to continue as a going concern. However forthe reasons more fully described in the aforesaid note the accounts of the Company havebeen prepared as a Going Concern. Our opinion is not modified in respect of this matter.
Emphasis of Matter
We draw attention to Note no. 27 of the standalone financial statements as regards tothe management evaluation of impact of COVID 19 on the future performance of theCompany. 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 mostsignificance 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 FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. In addition to the matters described in the MaterialUncertainty Related to Going Concern section we have determined the matters describedbelow to be the Key Audit Matters to be communicated in our report.
|The Key Audit Matter ||How 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 judgment. 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: |
|The Company has granted loans and advances to subsidiaries and other companies and also has 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 and receivables is subject to a significant level of judgment. ||- Obtained independent confirmation of balances outstanding from recipients and traced the amounts confirmed to the books of account; |
|Therefore there is a risk that the value of loans and receivables may be misstated. Refer to note 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 3.3(b) and 3.5(d) of the standalone financial statements. |
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in Company's Annual Report but does notinclude the standalone financial statements and our auditor's report thereon. Our opinionon the standalone financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon. In connection with our audit of thestandalone financial statements our responsibility is to read the other information andin doing so consider whether the other information is materially inconsistent with thestandalone financial statements or our knowledge obtained in the audit or otherwiseappears to be materially misstated. If based on the work we have performed we concludethat there is a material misstatement of this other information; we are required to reportthat 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 statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income/loss changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (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 were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue 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 areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities 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 inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone 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 to designaudit procedures that are appropriate in the circumstances. Under section 143(3) (i) ofthe Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
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 auditors' 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 (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 theOrder 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 bestof 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 theCompany so far as it appears from our examination of those books.
c) The standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified 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 March31 2021 taken on record by the Board of Directors none of the directors are disqualifiedas on March 31 2021 from being appointed as a director in terms of section 164(2) of theAct.
f) The going concern matter described in Material Uncertainty Related to Going Concernsection above in our opinion may have an adverse effect on the functioning of theCompany
g) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate report in "Annexure B".
h) With respect to the matter to be included in the Auditors' Report under section197(16) of the Act: In our opinion and according to the information and explanations givento us the Company has paid/provided for managerial remuneration in accordance with therequisite 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 inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at March 31 2021 onits financial position in its standalone financial statements - Refer Note 4 to thestandalone financial statements;
ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses. iii. There were no amounts which wererequired to be transferred to the Investor Education and Protection Fund by the Company.
Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' section of our report in the Independent Auditors' Report of even date tothe Members of Reliance Power Limited on the standalone financial statements as of and forthe year ended March 31 2021
i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assetsby which all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the program a portion ofthe fixed assets have been physically verified by the Management during the year and nomaterial discrepancies between the book records and the physical fixed assets have beennoticed.
(c) According to the information and explanations given to us and records examined byus the title deeds of freehold land are in the name of erstwhile company i.e. RelianceClean Power Private Limited which has merged with the Company under section 391 to 394 ofthe Companies Act 1956 pursuant to the scheme of amalgamation approved by Honorable HighCourt with an appointed date of April 1 2012.
ii. The Company does not hold any inventory. Accordingly the provisions of Clause3(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 theCompany has not granted any loans secured or unsecured to any company firm limitedliability partnership or other party covered in the register maintained under Section 189of the Act. Accordingly the provisions stated in paragraph 3(iii)(a)(b) & (c) of theOrder are not applicable.
iv. Based on the information and explanations given to us in respect of loansinvestments guarantees and securities the Company has complied with the provisions ofsections 185 and 186 of the Act to the extent applicable.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of sections 73 to76 of the Act and the Rules framed there under. Accordingly paragraph 3(v) of the Orderis not applicable to the Company.
vi. We have broadly reviewed the books of account maintained by the Company in respectof sale of electricity where the maintenance of cost records has been specified by theCentral Government under subsection (1) of Section 148 of the Act and the rules framedthere under and we are of the opinion that prima facie the prescribed accounts andrecords have been prepared and maintained. We have not however made a detailedexamination 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 ofthe Company examined by us in our opinion the Company is generally regular in depositingthe undisputed statutory dues in respect of income tax though there has been a slightdelay in a few cases and is regular in depositing undisputed statutory dues includingprovident fund goods and services tax and other material statutory dues as applicablewith the appropriate authorities. There are no undisputed amounts payable in respect ofsuch applicable statutory dues as at March 31 2021 for a period of more than six monthsfrom the date they became payable. As explained to us the Company did not have any dueson account of value added tax employee state insurance sales tax cess duty of customsand duty of excise. Refer note 4 of standalone financial statements.
(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of income-tax and entry tax as at March31 2021 which has not been deposited on account of dispute is as under:
|Name of Statute ||Nature of Dues ||Amount (` in lakhs) || |
Period to which Forum where dispute is pending it relates
|Income Tax Act 1961 ||Income Tax ||474 ||A.Y. 2011-12 ||Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai |
|Income Tax Act 1961 ||Income Tax ||19 ||A.Y. 2012-13 ||Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai |
|Income Tax Act 1961 ||Income Tax ||2921 ||A.Y. 2014-15 ||Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai |
|Income Tax Act 1961 ||Income Tax ||1935 ||A.Y. 2015-16 ||Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai |
|Income Tax Act 1961 ||Income Tax ||2380 ||A.Y. 2016-17 ||Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai |
|Income Tax Act 1961 ||Income Tax ||3241 ||A.Y. 2017-18 ||Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai |
|Income Tax Act 1961 ||Income Tax ||3157 ||A.Y. 2018-19 ||Commissioner of Income Tax (Appeals) [CIT(A)] Mumbai |
|Subtotal (a) || ||14127 || || |
|Entry Tax Act 1976 Korba Chattissgarh ||Entry Tax ||35 ||F.Y. 2010-11 ||Deputy Commissioner Commercial Tax Bilaspur Chattissgarh CTO Circle 2-Korba |
|Subtotal (b) || ||35 || || |
|Total (a+b) || ||14162 || || |
viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowings to financial institutionsand banks and in payment of dues to the debenture holders except for the followinginstances of default in repayment of principal amounts and interest:
|Sr. Name of Lender ||Borrowings || ||Interest || |
| ||Amount (` in lakhs) ||Period (Maximum days) ||Amount (` in lakhs) ||Period (Maximum days) |
|I Loan from Banks || || || || |
|1 Axis Bank ||6960 ||457 ||1649 ||457 |
|2 Yes Bank ||52458 ||791 ||19114 ||791 |
|3 Axis Bank - Gift City ||517 ||90 ||171 ||90 |
|4 DBS India ||63 ||1 ||363 ||59 |
|5 IDBI Bank ||- ||- ||15 ||30 |
|6 ICICI Bank ||17213 ||805 ||8412 ||791 |
|II Non Convertible Debentures || || || || |
|7 Yes Bank ||- ||- ||9419 ||185 |
| ||77211 || ||39143 || |
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 ourexamination of the records of the Company the Company has not raised any monies by way ofinitial public offer or further public offer (including debt instruments) and term loansduring the year. Accordingly paragraph 3(ix) of the Order is not applicable to theCompany.
x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by themanagement.
xi. In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the provisions ofSection 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and accordingly the provisions of the clause 3(xii) of theOrder are not applicable. xiii. According to the information and explanations given to usand based on our examination of the records of the Company in our opinion transactionsentered into by the Company with the related parties are in compliance with Sections 177and 188 of the Act. The details of related party transactions as required under Ind AS 24Related Party Disclosures specified under Section 133 of the Act have been disclosed inthe standalone financial statements.
xiv. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence the provisions ofClause 3(xiv) of the Order are not applicable to the Company.
xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with them. Accordingly the provisions of Clause 3(xv) ofthe Order are not applicable to the Company.
xvi. The Company as legally advised is not required to be registered under Section45-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 financialstatements).
For Pathak H. D. & Associates LLP
Firm's Registration No:107783W/W100593
Vishal D. Shah
Membership No:119303 UDIN: 21119303AAAAJM1077
Place: Mumbai Date: May 07 2021
Annexure B to the Independent Auditors' Report on the standalone financial statementsof Reliance Power Limited for year ended March 31 2021 Report on the Internal FinancialControls 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 Paragraph1(A)(g) under Report on Other Legal and Regulatory Requirements' section of ourreport of even date)
We have audited the internal financial controls with reference to standalone financialstatements of Reliance Power Limited ("the Company") as of March 31 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting ("Guidance Note") issued by theInstitute of Chartered Accountants of India (the "ICAI"). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operate effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisk of material misstatement of the standalone financial statements whether due to fraudor 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 withreference 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 aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are made only in accordance with authorisationsof management 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 with Reference to FinancialStatements
Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
In our opinion and to the best of our information and explanation given to us theCompany has in all material respects maintained adequate internal financial controlswith reference to standalone financial statements and such internal financial controlswith reference to financial statements were operating effectively as of March 31 2021based on the internal control with reference to financial statements criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India
For Pathak H. D. & Associates LLP
Firm's Registration No:107783W/W100593
Vishal D. Shah
Date: May 07 2021