To the Members of Alaknanda Hydro Power Company Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Alaknanda Hydro Power Company Limited
("the Company), which comprise the balance sheet as at March 31, 2021, and the
statement of profit and loss (including other comprehensive income), statement of changes
in equity and statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory
information (hereinafter referred to as "the financial statements").
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid financial statements, give the information required by the
Companies Act, 2013 ("the Act") in the manner so required and give a true and
fair view in conformity with accounting principles generally accepted in India, of the
state of affairs of the Company as at March 31, 2021, and profit (including other
comprehensive income), 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 Companies Act, 2013. Our responsibilities under those
Standards are further described in the Auditors Responsibilities for the Audit of the
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 ("ICAI") together with the ethical requirements that are relevant to our
audit of the financial statements under the provisions of the Companies Act, 2013 and the
Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance
with these requirements and the ICAls Code of Ethics. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for opinion on the
financial .statements.
Emphasis of Matter
We draw your attention to Note 11 to the financial statements regarding unsecured
interest free intercorporate loan to holding company repayable on demand.
Our opinion is not modified in this matter.
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. The other
information comprises the information included in the management report but does not
include the financial statements and our auditors report thereon.
Our opinion on the 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 financial statements, our responsibility is to read
the other information and, in doing so, consider whether such other information is
materially inconsistent the financial statements or our knowledge obtained in the audit or
otherwise appears to be materiality 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.
Responsibilities of Management for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these financial statements that give a true and fair view of the financial position,
financial performance, changes in equity and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the accounting Standards
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 financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the
Companys 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.
The Board of Directors are also responsible for overseeing the companys financial
reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors 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 financial statements.
As part of an audit in accordance with SAs, we exerci.se professional Judgment and
maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether
the company has adequate internal financial controls system 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 managements 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 Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention auditors report to the related disclosures in the
financial statements or, if such disclosures arc inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditors
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 financial
statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
We communicate with tho.se 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors report) Order, 2016 (‘‘the
Order) issued by the Central Government of India in terms of sub-section (11) of section
143 of the Companies Act, 2013, we give in the "Annexure - 1" a statement on the
matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our audit;
b) In our opinion proper books of account required by law have been kept by the Company
so far as appears from our examination of those books;
c) The balance sheet, the statement of profit and loss (including other comprehensive
income), statement of changes in equity and the cash How statement dealt with by this
report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Indian
Accounting Standards specified under section 133 of the Act, read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended;
e) On the basis of the written representations received from the directors as on March
31, 2021 taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2021 from being appointed as a director in terms of Section 164 (2) of the
Act.
f) 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 - 2";
g) The Company has neither paid nor provided any managerial remuneration for the
year ended March 31, 2021, accordingly, the provisions of section 197 read with Schedule V
to the Act are not applicable to the Company;
h) 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:
i. The Company has disclosed the impact of pending litigations on its financial
position in its financial statements - Refer Note 29 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There are no amounts to be transferred to the Investor Education and Protection
Fund by the Company.
Annexure- 1 to Independent Auditors Report
Referred to in paragraph I under Report on Other Legal and Regulatory Requirements of
the
Independent Auditors Report of even date to the members of Alaknanda Hydro Power
Company
Limited on the financial statements for the year ended March 31, 2021. We Report that:
i. (a) The Company is maintaining proper records showing full particulars, including
quantitative details and situation of fixed assets.
(b) According to information and explanations given to us, the company has a regular
program of physical verification of its fixed assets. In accordance with this program the
management conducted the verification of fixed assets. In our opinion, this periodicity of
physical verification is reasonable having regard to the size of the Company and the
nature of its fixed assets. As informed to us, no material discrepancies have been noticed
on such verification.
(c) According to information and explanations given to us and the records of company
examined by us, in our opinion, the title deeds of immovable properties included in note 3
to the financial statements "Property, plant and equipment" are held in the name
of the Company.
ii. According to information and explanations given to us, the companys Management has
physically verified its inventory during the year. In our opinion, the frequency of
verification is reasonable. As informed to us, no material discrepancies have been noticed
on such verification.
iii. According to the information and explanation given to us, the Company, during the
year, has not granted any loans, secured or unsecured, to companies, firms, limited
liability partnerships or other parties covered in the register maintained under Section
189 of the Act, Therefore, the provisions of clause 3(iii) of the said order not
applicable to the Company.
iv. The Company has not granted any loans or made any investments or provided any
guarantees or security to the parties covered under sections 185 and 186. Therefore, the
provisions of clause 3(iv) of the said order not applicable to the Company.
V. The Company has not accepted any deposits from the public within the meaning of
Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent
notified. Therefore, the provisions of clause 3(v) of the said order not applicable to the
Company,
vi. We have broadly reviewed the books of account maintained by the Company in respect
of services where, pursuant to the rules made by the Central Government of India, the
maintenance of cost records has been specified under sub-section (1) of Section 148 of the
Act, and are of the opinion that, prima facie, the prescribed accounts and records have
been made and maintained. However, we have not, made a detailed examination of the records
with a view to determine whether they arc 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 regular in depositing the
undisputed statutory dues, including provident fund, employees state insurance, income
tax, sales tax, service tax, duty of customs, value added tax, cess, goods and service tax
and other material statutory dues, as applicable, with the appropriate authorities though
there are slight delays in few cases of tax deducted at source, employees state
insurance, goods and service tax, provident fund and payment of advance income tax.
(b) According to the information and explanations given to us, no undisputed amounts
payable in respect of provident fund, employees state insurance, income-tax, service tax,
sales-tax, customs duty, value added tax, cess, goods and service tax and other material
statutory dues were outstanding, at the year end, for a period of more than six months
from the date they became payable.
(c) According to the information and explanations given to us and the records of the
Company examined by us, there are no dues of sales-tax, customs duty, value added tax,
service tax, goods and service tax and cess which have not been deposited on account of
any dispute. The particulars of dues of income tax as at March 31, 2021, which have not
been deposited on account of a dispute are as follows:
| Name of the statute |
Nature of the dues |
Amount INR in Lakhs |
Assessment Year/ Tariff period to which the amount relates |
Forum where the dispute is pending |
| The Income- tax Act, 1961 |
|
0.07 |
2008-09 |
Commissioner of Income Tax (Appeals), Mumbai |
|
Income Tax |
3.07 |
2009-10 |
Commissioner of Income Tax (Appeals), Hyderabad |
|
|
49.75 |
2010-1 1 |
|
|
|
37.98 |
2014-15 |
|
viii. In our opinion and according to the information and explanations given by the
management,
(a) the Company has not defaulted in repayment of loans or borrowings to financial
institutions or banks during the year. The Company had obtained moratorium granted by the
banks and financial institutions in line with the Reserve Bank of India circulars dated
March 27, 2020 and May 23, 2020 in respect of principal instalment / interest due as of
March 2021 amounting to INR 85.92 crores.
(b) during the year, the Company as per the Settlement Agreement with Edelweiss Finvest
Limited and Ecap Equities Limited for debentures and ECL Finance Limited for term loan
restructured its Term loans and Debentures along with interest accrued thereon. The
Company during the year adhered the terms of the said agreement (refer note 15 to the
financial statements).
(c) the Company has not obtained any loans or borrowing from Government.
ix. In our opinion and according to the information and explanations given to us, the
Company has not raised any money by way of initial public offer or further public offer
(including debt instruments) and term loan.
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 explanation given to us, we have neither come across any
instance of 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 case by the Management.
xi. The Company has neither paid nor provided any managerial remuneration for the year
ended March 31, 2021, accordingly, the provisions of section 197 read with Schedule V to
the Act are not applicable to the Company. Accordingly, the provisions of Clause 3 (xi) of
the Order are not applicable to the company.
xii. As the Company is not a Nidhi company and Nidhi Rules, 2014 are not applicable to
it. Accordingly, the provisions of clause 3(xii) of the order are not applicable to the
Company.
xiii. The Company has entered into transactions with related parties in compliance with
the provisions of section 177 and 188 of Companies Act. The details of such related party
transactions have been disclosed in the financial statements as required under Indian
Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of
the Act and the Companies (Indian Accounting Standards) Rules, 2015, as amended.
xiv. According to the information and explanations given to us and the records of the
company examined by us. The Company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures during the year under
review. Accordingly, the provisions of clause 3(xiv) of the Order are not applicable to
the company.
XV. The Company has not entered into any non-cash transactions with directors or
persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are
not applicable to the company.
xvi. The Company is not required to be registered under Section 45-1A of the Reserve
Bank of India Act, 1934. Accordingly, the provisions of Clause 3 (xvi) of the Order arc
not applicable to the company.
Annexure - 2 to Independent Auditors Report
Referred to in paragraph 2(0 under Report on Other Legal and Regulatory Requirements of
the Independent Auditors Report of even date to the members of Alaknanda Hydro Power
Company Limited on the financial statements for the year ended March 31, 2021
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")
To the Members of Alaknanda Hydro Power Company Limited
1. We have audited the internal financial controls with reference to financial
statements of Alaknanda Hydro Power Company Limited ("the Company") as of March
31, 2021 in conjunction with our audit of the financial statements of the Company for the
year ended on that date.
Managements Responsibility for Internal Financial Controls
2. The Companys Management is responsible for establishing and maintaining internal
financial controls 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" (the "Guidance Note") issued by the Institute of
Chartered Accountants of India. 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 the
Companys 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 Companies Act, 2013.
Auditors Responsibility
3. Our responsibility is to express an opinion on the Companys internal financial
controls with reference to financial statements based on our audit. We conducted our audit
in accordance with the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting (the "Guidance Note") and the Standards on Auditing as
specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an
audit of internal financial controls, both applicable to an audit of Internal Financial
Controls and, both issued by the Institute of Chartered Accountants of India. 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 financial statements was established and maintained
and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy
of the internal financial controls system with reference to financial statements and their
operating effectiveness. Our audit of internal financial controls with reference to
financial statements included obtaining an understanding of internal financial controls
with reference to financial statements, 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 auditors
judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the internal financial controls system with
reference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
6. A companys internal financial control 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 companys internal financial control with
reference to financial reporting includes 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 companys assets that could have a
material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial
Statements
7. 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 control 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
8. In our opinion, the Company has, in all material respects, an adequate internal
financial controls system with reference to financial statements and such internal
financial controls with reference to financial statements were operating effectively as at
March 31, 2021, 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.
+91-9892691696
