Mar 31, 2023
Adani Ports and Special Economic Zone Limited
Report on the Audit of the Standalone Financial StatementsQualified Opinion
We have audited the accompanying standalone financial statements of Adani Ports and Special Economic Zone Limited ("the Companyâ), which comprise the Balance Sheet as at March 31, 2023, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information,
In our opinion and to the best of our information and
according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion section below, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its loss, total comprehensive loss, its cash flows and the changes in equity for the year ended on that date.
The Company has entered into Engineering, Procurement and Construction (EPC) purchase contracts substantially with a fellow subsidiary ("Contractorâ) of a party identified in the allegations made in the Short Seller Report. As at March 31, 2023, a net balance of H2,457.05 crores is recoverable from this Contractor, of which H713.63 crores relate to security deposits paid to the Contractor and H1,501.50 crores in respect of capital advances. The security deposits carry an interest of approximately 8% per annum and are refundable by the Contractor either on completion or termination of the project against which the security deposit was given by the Company. Security deposits totalling H713.63 crores have been given prior to April 1, 2022, of which security deposits amounting to H253.63 crores relate to projects which have not commenced as at March 31, 2023. The Company has represented to us that the Contractor is not a related party,
Additionally, there were financing transactions (including equity) with/by certain other parties identified in the allegations made in the Short Seller
Report, which the Company has represented to us were not related parties. As at March 31, 2023,
all receivable and payable amounts were settled including interest and there were no outstanding balances,
Subsequent to the year end, the Company renegotiated the terms of sale of its container terminal under construction in Myanmar (held through a subsidiary audited by other auditors) with Solar Energy Limited, a company incorporated in Anguilla. The Company has represented to us that the buyer is not a related party, The carrying amount of the assets (classified as held for sale) was ?1,752.92 crores. The sale consideration was revised from H2,015 crores (USD 260 million) to H246.51 crores (USD 30 million), which has been received, and an impairment loss of H1,558.16 crores has been recognised as an expense in the Statement of Profit and Loss.
The Company has represented to us that there is no effect of the allegations made in the Short Seller Report on the standalone financial statements based on their evaluation and after consideration of a memorandum prepared by an external law firm on the responses to the allegations in the Short Seller Report issued by the Adani group. The Company did not consider it necessary to have an independent external examination of these allegations because of their evaluation and the ongoing investigation by the Securities and Exchange Board of India as directed by the Hon''ble Supreme Court of India. The evaluation performed by the Company, as stated in Note 46 to the standalone financial statements, does not constitute sufficient appropriate audit evidence for the purposes of our audit, In the absence of an independent external examination by the Company and pending completion of investigation, including matters referred to in the Report of the Expert Committee constituted by the Hon''ble Supreme Court of India as described in Note 46 to the standalone financial statements, by the Securities and Exchange Board of India of these allegations, and in respect of the sale of asset described in the immediately preceding paragraph, we are unable to comment whether these transactions or any other transactions may result in possible adjustments and/or disclosures in the standalone financial statements in respect of
related parties, and whether the Company should have
complied with the applicable laws and regulations,
We conducted our audit in accordance with the standards on Auditing ("SAsâ) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibility 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 (ICAI) 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 made thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics, Except for the matters described in the Basis for Qualified Opinion section above, we believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our qualified opinion on the standalone financial statements.
We draw attention to Note 44 of the standalone financial statements, which describes the matter relating to delay in achievement of scheduled commercial operation date ("CODâ i.e., December 03,
2019, as stipulated under the concession agreement) of the international deep-water multipurpose seaport being constructed by Adani Vizhinjam Port Private Limited ("AVPPL'') at Vizhinjam, Kerala (the "Projectâ). The matter has been referred to arbitration proceedings by AVPPL to resolve disputes relating to force majeure events and failure of the Authority of the concession to fulfil its obligations under the concession agreement, which AVPPL contends, contributed to the delay in achieving COD.
Our opinion is not modified in respect of this matter.
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. Additionally, the matter below in respect of the Short Seller Report has been reported in the Basis for Qualified Opinion section of our report. We have determined the matter described below to be the key audit matter to be communicated in our report,
Sr. No. |
Key Audit Matter Description |
Auditor''s Response |
1 |
Short Seller Report ("the Reportâ) (Refer to Basis for Qualified Opinion section above) In January 2023, there was a Report containing allegations relating to the Adani group of companies. The Report alleged that transactions with certain parties named in the Report were not appropriately identified and reported as related parties, which were not in compliance with applicable laws and regulations, The Company had purchases, sale of services and financing transactions (including equity) with/by certain parties including those identified in the allegations made in the Report. The allegations in the Report are under investigation by the Securities and Exchange Board of India in accordance with the direction and monitoring of Hon''ble Supreme Court of India, |
Principal audit procedures performed ⢠We inquired with the Company on their approach to assess these allegations to ascertain whether there is any effect on the standalone financial statements. ⢠We requested the Company to initiate an independent external examination of these allegations to determine whether these allegations may have any possible effect on the standalone financial statements of the Company. The Company represented to us that these allegations have no effect on the standalone financial statements of the Company, based on the evaluation it performed and because of the ongoing investigation by the Securities and Exchange Board of India as directed by the Hon''ble Supreme Court of India, did not consider it necessary to initiate an independent external examination, ⢠We evaluated the assessment performed by the Company, as described in Note 46 to the standalone financial statements and have read the memorandum prepared by an external law firm which the Company considered in its assessment, to determine whether these allegations have any possible effect on the standalone financial statements of the Company. The assessment by the Company did not constitute sufficient appropriate audit evidence for the purposes of our audit, |
Sr. No. |
Key Audit Matter Description |
Auditor''s Response |
⢠In the absence of an independent external examination by the Company and because of insufficient appropriate audit evidence described immediately above, we have performed alternative audit procedures in respect of these allegations including consideration of information relating to the ownership and association of the parties identified in the Report to the extent publicly available, ⢠We also evaluated the design of the internal controls in respect of allegations made on the Company, |
Information Other than the Financial Statements and Auditor''s Report Thereon
⢠The Company''s Board of Directors is responsible
for the other information, The other information comprises the information included in the Directors
report, but does not include the consolidated financial statements, 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 during the
course of our audit or otherwise appears to be materially misstated,
⢠If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. As described in the Basis for Qualified Opinion section above, in the absence of an independent external examination by the Company and pending completion of investigation, including matters referred to in the Report of the Expert Committee constituted by the Hon''ble Supreme Court of India as described in Note 46 to the standalone financial statements, by the Securities and Exchange Board of India of these allegations and in respect of sale of assets, we are unable to comment whether transactions stated in Basis for Qualified Opinion section above, or any other transactions may result in possible adjustments and/or disclosures in the standalone financial statements in respect of related parties, and whether the Company should have complied with the relevant laws and regulations. Accordingly, we are unable to conclude whether or not the other information is materially misstated with respect to this matter,
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is 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 financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India, This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 standalone financial statements, management is 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so,
The Company''s Board of Directors is also responsible for overseeing the Company''s financial reporting process,
Auditor''s Responsibility 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 financial 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 standalone 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 the 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.
Materiality is the magnitude of misstatements in the
standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced, We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements,
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 auditor''s 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.
We are not statutory auditors of majority of the other
Adani group companies and therefore the scope of our audit does not extend to any transactions or balances which may have occurred or been undertaken between these Adani group companies and any supplier, customer or any other party which has had a business relationship with the Company during the year.
Our opinion on the standalone financial statements and our report on the Other Legal and Regulatory
Requirements below is not modified in respect of this
matter,
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on
our audit we report that:
a) We have sought and except for the matters described in Basis for Qualified Opinion
section above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) Except for the possible effects of the matters described in the Basis for Qualified Opinion
section above, 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 Balance Sheet, the Statement of Profit and Loss including Other Comprehensive
Income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d) Except for the possible effects of the matters described in the Basis for Qualified Opinion
section above, in our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e) The matter described in the Basis for Qualified Opinion section above, in our opinion, may
have an adverse effect on the functioning of the Company.
f) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 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 connected therewith, are as stated in the Basis for Qualified Opinion section and in paragraph
(b) above.
h) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure Aâ. Our report expresses qualified opinion on the adequacy and operating effectiveness of the
Company''s internal financial controls with reference to standalone financial statements for the reasons stated therein.
i) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of
the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
j) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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 standalone financial statements -Refer Note 37 to the standalone financial
statements;
ii. 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 -Refer Note 33 to the standalone financial statements;
iii. There has been no delay in transferring
amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. (a) The Management has represented
that, to the best of it''s knowledge and belief, other than as disclosed in the note 43(a) to the standalone financial statements no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities ("Intermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented that, to the best of it''s knowledge and belief, as disclosed in the note 43(b) to the standalone financial statements no funds have been received by the Company from any person or entity, including foreign entities ("Funding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures that has been considered reasonable and appropriate in the circumstances, except for the possible effects of the matters described in the Basis for Qualified Opinion section above, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable.
As stated in Note 52 (iii) to the standalone
financial statements, the Board of
Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting.
The dividend proposed is in accordance with section 123 of the Act, as applicable.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining
books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company w.e.f. April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.
2. As required by the Companies (Auditor''s Report) Order, 2020 ("the Orderâ) issued by the Central
Government in terms of Section 143(11) of the Act, we give in "Annexure Bâ a statement on the
matters specified in paragraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells LLP
Chartered Accountants (Firm''s Registration No 117366W/W-100018)
Kartikeya Raval
Partner
Place: Ahmedabad (Membership No. 106189)
Date: May 30, 2023 UDIN: 23106189BGVORL6331
Mar 31, 2022
Adani Ports and Special Economic Zone LimitedReport on the Audit of the Standalone Financial
Statements
Opinion
We have audited the accompanying standalone financial statements of Adani Ports and Special Economic Zone Limited ("the Companyâ), which comprise the Balance Sheet as at March 31, 2022, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information,
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 ("the Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date,
Basis for Opinion
We conducted our audit of the standalone financial
statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs), Our responsibilities under those Standards are further described in the Auditor''s Responsibility 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 (ICAI) 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 made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics,
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our
audit opinion on the standalone financial statements,
Emphasis of Matter
We draw attention to Note 46 of the standalone financial statements, which describes the matter relating to delay in achievement of scheduled commercial operation date ("CODâ i.e. December 03, 2019) of the development of international deep-water multipurpose seaport being constructed by Adani Vizhinjam Port Private Limited ("AVPPL'') at Vizhinjam, Kerala (the "Projectâ), as stipulated under the relevant concession agreement ("Agreementâ) and matter subject to arbitration proceedings thereof, initiated by the AVPPL, to resolve disputes with the Government authorities relating to various matters pertaining to development of project which AVPPL represents led to delay in achieving scheduled COD, as at reporting date,
Our conclusion on the Statement 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, We have determined the matter described below to be the key audit matter to be communicated in our report,
Impairment of Non-current Investment and Loans to Adani Kandla Bulk Terminal Private Limited ("AKBTPL'') â Refer to Note 4(b)(ii) to the Standalone Financial StatementsKey Audit Matter Description
The Company has made equity investments of H370,05 crores and has advanced loans of H918,06 crores (including interest accrued H101,23 crores) to
AKBTPL (a wholly owned subsidiary of the Company),
The Company''s evaluation of impairment of its equity
investments and loans given involves the comparison of its recoverable value of each cash-generating unit to its corresponding carrying value, The Company
used the discounted cash flow model to estimate recoverable value, which requires management to make significant estimates and assumptions related to forecasts of future revenues and discount rates, In the current financial year, the Company has provided an impairment of H491,23 crore (included as exceptional item in the Statement of Profit and Loss) due to changes in the business assumptions related to their future projections mainly due to change in macro-economic conditions in which the AKBTPL operates,
We focused on this area as Key Audit Matter due to the size/materiality of the balances of equity investments
and loans given and because the Company''s assessment of the ''recoverable value'' of the CGU (at the entity level) involves judgements about the future results of the business and the discount rates applied
to future cash flow forecasts.
How the Key Audit Matter Was Addressed in the Audit
Our audit procedures related to forecasts of future
revenue and operating margin and selection of the discount rate for these assets included the following,
among others:
¦ We tested the Design, Implementation and Operating effectiveness of controls over impairment assessment process, including those over the forecasts of future revenue and operating margin,
and the selection of the discount rate.
¦ We assessed the appropriateness of changes made in business assumptions as attributable to future
projection
¦ We evaluated the reasonableness of management''s revenue forecasts by comparing it with:
¦ Historical revenues growth
¦ Internal communications to management, Audit Committee and the Board of Directors.
¦ With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation
methodology and (2) discount rate by:
¦ Testing the source information underlying the
determination of the discount rate and the mathematical accuracy of the calculation.
¦ Developing a range of independent estimates and comparing those to the discount rate selected by management.
¦ Performed a sensitivity analysis to determine
the effect of variation in the cash flow estimates.
Information Other than the Financial Statements and Auditor''s Report Thereon
¦ The Company''s Board of Directors is responsible
for the other information. The other information comprises the information included in the Directors
report, but does not include the consolidated financial statements, 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 during the course of our audit or otherwise appears to be materially misstated.
¦ If, based on the work we have performed, we conclude that there is a 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 Board of Directors is 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 financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 statement 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 is 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.
Those Board of Directors are also responsible for
overseeing the Company''s financial reporting process.
Auditor''s Responsibility 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 financial 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 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 the 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.
Materiality is the magnitude of misstatements in the
standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
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 auditor''s 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 Section 143(3) of the Act, based
on our audit, 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 Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity 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.
e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 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 over financial reporting of the Company and the operating
effectiveness of such controls, refer to
our separate Report in "Annexure Aâ. Our
report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of
the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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 standalone financial statements.
ii. 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;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented
that, to the best of it''s knowledge and belief, other than as disclosed in the note 44 to the financial statements no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of it''s knowledge
and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"),
with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable.
As stated in note 51(i) to the financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.
2. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells LLP
Chartered Accountants (Firm''s Registration No 117366W/W-100018)
Partner
(Membership No. 106189)
(UDIN: 22106189AJNMNT1083)
Place: Ahmedabad
Date: May 24, 2022
/ino
Mar 31, 2021
Independent Auditor''s Report
To The Members of
Adani Ports and Special Economic Zone Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Adani Ports and Special Economic Zone Limited ("the Companyâ), which comprise the Balance Sheet as at March 31, 2021, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Financial Statementsâ).
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 ("the Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor''s Responsibility 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 (ICAI) 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 made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Emphasis of Matter
We draw attention to:
(i) Note 4 (b) (ii) to the standalone financial statements regarding the management''s assessment of its investment of Rs. 115.89 crores and outstanding loans aggregating Rs. 441.63 crores (including accrued interest of Rs. 28.20 crore) in Adani Murmugao Port Terminal Private Limited ("AMPTPLâ) and investment of Rs. 370.05 crore and outstanding loans aggregating Rs. 864.55 crore (including interest accrued Rs. 43.79 crore) in Adani Kandla Bulk Terminal Private Limited ("AKBTPLâ), as at March 31, 2021, subsidiaries of the Company, being considered recoverable based on the various judgements and estimates related to cargo traffic, port tariffs, inflation, discount rates, implications expected to arise from COVID-19 pandemic, and operational benefits over the balance concession period to determine the cashflows for AMPTPL and AKBTPL and receipt of future relaxation of revenue share in case of AMPTPL. Accordingly, for the reasons stated in the said Note, no provision towards impairment of carrying values of the aforesaid investments and loans is considered necessary at this stage.
(ii) Note 42 to the standalone financial statements which describes a matter relating to delay in achievement of scheduled Commercial Operational Date ("CODâ i.e. December 03, 2019) for the development of international deep-water multipurpose seaport being constructed by a wholly owned subsidiary, Adani Vizhinjam Port Private Limited ("AVPPLâ), at Vizhinjam, Kerala as stipulated under the relevant Concession Agreement and status of the arbitration proceedings initiated by AVPPL to resolve disputes with the Government authorities over various matters relating to development of the project, which led to delay in achieving scheduled COD, as at reporting date, detailed in the said note.
Our opinion is not modified in respect of these matters.
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. We have determined the matters described below to be the key audit matters to be communicated in our report.
Impairment of Non-current Investment and Loans to Adani Murmugao Port Terminal Private Limited ("AMPTPLâ) and Adani Kandla Bulk Terminal Private Limited ("AKBTPLâ) â Refer to Note 4 (b) (ii) to the standalone financial statements
Key Audit Matter Description
The Company has equity investments of Rs. 370.05 crores and Rs. 115.89 crores in AMPTPL and AKBTPL respectively. Further the Company has also provided loans of Rs. 864.55 crores (including interest accrued Rs. 43.79 crores) and Rs. 441.63 crores (including interest accrued Rs. 28.20 crores) to these entities respectively.
The Company has carried out detailed evaluation of recoverable values of its equity investments in and loans to these companies considering various factors, as further explained in Note 4 (b) (ii) to the standalone financial statements. The Company used the discounted cash flow model to estimate recoverable value, which requires management to make significant estimates and assumptions related to forecasts of future revenues and discount rates. Based on such assessment the management has concluded that the carrying value of the investments and loans are good and recoverable. Any adverse changes in these assumptions could have a significant impact on either the recoverable value, or the amount of any impairment charge, or both.
We focused on this area as Key Audit Matter due to the size/materiality of the balances of equity investment in and loans to these companies, and due to the multitude of factors and assumptions involved in determining the forecasted revenues/cash flows and discount rate in the projection period requiring significant judgments to estimate the recoverable values
How the Key Audit Matter Was Addressed in the Audit
Our audit procedures related to forecasts of future revenue and operating margin and selection of the discount rate for these assets included the following, among others:
⢠Evaluated the Design and Implementation of the relevant internal controls and tested the operating effectiveness of such internal controls over impairment assessment process, which inter-alia included the management''s control over reasonableness of the assumptions considered to forecastsof future revenues and operating margin, and the selection of the discount rate.
⢠We obtained the investment valuations from the management and performed the following substantive procedures:
⢠Evaluated the reasonableness of revenue related assumptions considered in the projections with the company''s historical revenue growth and internal communications to management, Audit Committee and the Board of Directors
⢠Evaluated the appropriateness of other key assumptions considered, in developing the projections by considering the historical accuracy of the Company''s estimates in the prior periods.
⢠With internal fair-value specialists, we evaluated the reasonableness of (1) the valuation methodology and (2) the discount rate considered, by
⢠Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.
⢠Developing a range of independent estimates and comparing those to the discount rate selected by management.
⢠Performed a sensitivity analysis to determine the effect of variation in the cash flow estimates.
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Director''s report, but does not include the consolidated financial statements, 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 during the course of our audit or otherwise appears to be materially misstated.
⢠If, based on the work we have performed, we conclude that there is a 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 Board of Directors is 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 financial position, financial performance including other comprehensive income , cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 statement 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 is 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.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibility 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 financial 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 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 the 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.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
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 auditor''s 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 Section 143(3) of the Act, based on our audit, 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 Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g. With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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 standalone financial statements ;
ii. The Company has made provision, as required under the applicable law or accounting standard, for material foreseeable losses, if any, on long-term derivative contracts;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 ("the Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
Place: Ahmedabad Date: May 04, 2021 | For Deloitte Haskins & Sells LLP Chartered Accountants (Firm''s Registration No 117366W/W-100018) Kartikeya Raval Partner (Membership No. 106189) (UDIN: 21106189AAAAEN3060) |
Mar 31, 2019
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of Adani Ports and Special Economic Zone
Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
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 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditorâs Responsibility 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 (ICAI) 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 made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Emphasis of Matter
We draw attention to:
(i) Note 38 to the standalone financial statements, which describes the managementâs assessment for recoverability of the project cost incurred by the Company, pending execution of definitive agreements between the parties.
(ii) Note 4(b)(ii) to the standalone financial statements which describes the basis on which Management has considered that no impairment is necessary as at March 31, 2019 for long term-investments amounting to Rs.115.89 crore and loan amounting to Rs.442.47 crore (including interest accrued Rs.48.81 crore) in Adani Murmugao Port Terminal Private Limited and long term-investments amounting to Rs.120.05 crore and loan amounting to Rs.1,233.69 crore (including interest accrued Rs.69.07 crore) in Adani Kandla Bulk Terminal Private Limited.
Our report is not modified in respect of these matters.
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. We have determined the matters described below to be the key audit matters to be communicated in our report.
Impairment of Long-term Investment and Loans to Adani Murmugao Port Terminal Private Limited (âAMPTPLâ) and Adani Kandla Bulk Terminal Private Limited (âAKBTPLâ) â Refer to Note 4(b)(ii) to the standalone financial statements_ Key Audit Matter Description
The Company has made equity investments of Rs.115.89 crore and Rs.120.05 crore in AMPTPL and AKBTPL respectively. Further the Company has also provided loans of Rs.442.47 crore (including interest accrued Rs.48.81 crore) and Rs.1,233.69 crore (including interest accrued Rs.69.07 crore) to these entities respectively.
The Companyâs evaluation of impairment of its equity investments in and loan to these companies involves the comparison of their recoverable values to their corresponding carrying values. The Company used the discounted cash flow model to estimate recoverable values, which requires management to make estimates and assumptions related to forecasts of future revenues and operating margins, and discount rates. Changes in these assumptions could have a significant impact on either the recoverable value, the amount of any impairment charge, or both.
We focused on this area as Key Audit Matter due to the size/materiality of the balances of equity investment in and loans to these companies, and because the Companyâs assessment of the recoverable values involves judgements about the future results of the business and the discount rates applied to future cash flow forecasts.
How the Key Audit Matter Was Addressed in the Audit
Our audit procedures related to forecasts of future revenue and operating margin and selection of the discount rate for these assets included the following, among others:
- We tested the Design, Implementation and Operating effectiveness of controls over impairment assessment process, including those over the forecasts of future revenue and operating margin, and the selection of the discount rate.
- We evaluated the reasonableness of managementâs revenue and operating margin forecasts by comparing the forecasts to:
- Historical revenues and operating margins.
- Internal communications to management and the Board of Directors.
- With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate by:
- Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.
- Developing a range of independent estimates and comparing those to the discount rate selected by management.
Recoverability of project cost â Refer to Note 38 to the standalone financial statements Key Audit Matter Description
The Companyâs assets include project inventories of Rs.562.89 crore towards construction of project facilities as referred to in a preliminary agreement entered into by the Company with one of its customers. Pending definitive agreement between the parties, the assessment of recoverability of the project assets involved judgement and hence considered a key audit matter.
How the Key Audit Matter Was Addressed in the Audit
Our audit procedures related to the assessment of recoverability of aforesaid balances included the following:
- We tested key controls over the management judgments and the assumptions-setting processes including judgments regarding expected realization date and value.
- Assessing the underlying preliminary agreement, project progress reports, the reports of the committee set up by the customer to facilitate the execution of definitive agreements with the Company and various communications between the Company and the customer, which indicate that considerable progress has been made towards signing of the definitive agreements.
Information Other than the Financial Statements and Auditorâs Report Thereon
- The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Directorâs Report of even date and annexure thereof, but does not include the consolidated financial statements, standalone financial statements and our auditorâs 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 during the course of our audit or otherwise appears to be materially misstated.
- If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is 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 financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 is responsible for assessing the Companyâs 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.
Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibility 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 auditorâs 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 financial 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 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 the management.
- Conclude on the appropriateness of managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
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 auditorâs 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 Section 143(3) of the Act, based on our audit 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 Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity 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.
e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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 standalone financial statements;
ii. 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;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
Annexure âAâ to the Independent Auditorâs Report
(Referred to in paragraph 1(f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Adani Ports and Special Economic Zone Limited (âthe Companyâ) as of March 31, 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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. 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 companyâs 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 over financial reporting was established and maintained and if 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 system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditorâs judgement, including the assessment of the risks of material misstatement of the 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs internal financial control over financial reporting 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 companyâs internal financial control over 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 companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting 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, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the criteria for internal financial control over financial reporting 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.
Annexure âBâ to the Independent Auditorâs Report
(Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
(i) In respect of fixed assets
a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b. Some of the fixed assets were physically verified during the year by the Management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
c. According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed/ transfer deed/ conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and acquired buildings which are freehold, are held in the name of the Company as at the balance sheet date, except the following:
Particulars of the land and building |
Gross Block as at Balance sheet Date (Rs. in crore) |
Net Block as at Balance sheet Date (Rs.in crore) |
Remarks |
Reclaimed land measuring 1093.53 Hectares |
180.18 |
143.35 |
The said land pertains to reclaimed land at the Mundra Port, which are pending to be registered in the name of the Company. (Refer note 3(a)(vi)&(vii) of standalone financial statements) |
612 Residential Flats and a Hostel Building |
130.75 |
120.26 |
The said flats and building are located at Samundra Township, Mundra and are pending to be registered in the name of the Company. (Refer note 3 (iv) of the standalone financial statements) |
In respect of immovable properties of land that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.
(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.
(iii) The Company 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 Companies Act, 2013.
(iv) I n our opinion and according to the information and explanations given to us, and considering the legal opinion taken by the Company on applicability of section 185 of the Companies Act, 2013, in respect of certain loan transactions and that the same have been given in the ordinary course of business, the Company has complied with the provisions of the Section 185 of the Companies Act, 2013 in respect of grant of loans and providing guarantees and securities, as applicable. Further, based on the information and explanations given to us, the Company has complied with the provisions of Section 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2014, as amended, would apply. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.
(vi) To the best of our knowledge and according to the information and explanations given to us, the Company is not required to maintain cost records pursuant to Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under section 148(1) of the Companies Act, 2013.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues of Provident Fund, Employeesâ State Insurance, Income-tax, Custom Duty, Goods and Services Tax, cess and other material statutory dues applicable to it to the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Income-tax, Custom Duty, Goods and Services Tax, cess and other material statutory dues in arrears as at March 31, 2019 for a period of more than six months from the date they became payable.
(c) Details of dues of Income-tax, Service Tax and Customs Duty which have not been deposited as on March 31, 2019 on account of disputes are given below:
Name of Statute |
Nature of Dues |
Forum where Dispute is Pending |
Period to which the Amount Relates |
Amount Involved (Rs. in Crore) |
Amount Unpaid (Rs. in Crore) |
Customs Act, 1962 |
Custom Duty |
Commissioner of Customs & Excise, Ahmedabad |
June, 2008 |
2.00 |
2.00 |
Assistant Commissioner of Customs, Mundra |
July, 2003 |
0.14 |
0.14 |
||
Deputy Commissioner of Customs, Mundra |
August, 2007 |
0.25 |
0.25 |
||
Finance Act, 1994 |
Service Tax |
Supreme Court |
December, 2004 to March, 2006 |
11.22 |
6.72 |
Commissioner (Appeals) Rajkot |
October, 2003 to August, 2005 |
0.56 |
0.56 |
||
High Court of Gujarat |
April, 2006 to September, 2011 |
173.63 |
173.63 |
||
Commissioner of Service Tax, Ahmedabad |
September, 2009 to March, 2010 |
0.61 |
0.61 |
||
Commissioner/ Additional Commissioner of Service Tax, Ahmedabad |
April, 2011 to March, 2014 |
190.04 |
190.04 |
||
High Court of Gujarat |
April, 2004 to August, 2009 |
6.72 |
6.72 |
||
Commissioner of Service Tax, Ahmedabad |
April, 2009 to March, 2011 |
0.17 |
0.17 |
||
Income Tax Act, 1961 |
Income Tax |
Income Tax Appellate Tribunal |
AY 2011-12 |
43.57 |
43.57 |
Commissioner of Income Tax (Appeal) |
AY 201213 to AY 2015-16 |
63.96 |
40.41 |
There are no dues of Sales Tax, Excise Duty, Value Added Tax and Goods & Services Tax as on March 31, 2019 on account of disputes.
(viii) I n our opinion and according to the information and explanations given to us, as at the reporting date, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and dues to debenture holders. The Company has not taken any loans from the government.
(ix) I n our opinion and according to the information and explanations given to us, and on an overall examination of the balance sheet, monies raised by way of term loans have been applied by the Company during the year for the purposes for which they were raised, other than temporary deployment pending application of proceeds. The Company has not raised monies by way of initial public offer or further public offer (including debt instruments) during the year.
(x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
(xi) I n our opinion and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of paragraph 3 of the Order is not applicable.
(xiii) I n our opinion and according to the information and explanations given to us and considering the legal opinion taken by the Company on applicability of Section 188(1)(d) of the Companies Act, 2013, in respect of loans given by the Company to its subsidiary companies, the Company is in compliance with Sections 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(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 reporting under clause (xiv) of paragraph 3 of the Order is 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 him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firmâs Registration No. 117366W/W-100018)
Kartikeya Raval
Partner
Ahmedabad, May 27, 2019 (Membership No. 106189)
Mar 31, 2018
To
The Members of
Adani Ports and Special Economic Zone Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Adani Ports and Special Economic Zone Limited ("the Companyâ), which comprise the Balance Sheet as at 31st March, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone Ind AS financial statementsâ).
Management''s Responsibility for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013
("the Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under and the Order issued under section 143(11) of the Act.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018, and its profit, total comprehensive income, its changes in equity and cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to:
(i) Note 41 to the standalone Ind AS financial statements which describes the management''s basis for recoverability of accrued revenue and the related project assets costs in earlier years based on a preliminary agreement entered into by the Company with a customer in respect of a project being undertaken, pending execution of definitive agreement between the parties.
(ii) Note 4(c)(ii) to the standalone Ind AS financial statements which describes the basis on which Management has considered that no impairment is necessary as at 31st March, 2018 for long term-investments amounting to '' 115.89 crore and loan amounting to '' 412.74 crore in Adani Murmugao Port Terminal Private Limited and long term-investments amounting to '' 120.05 crore and loan amounting to '' 1,146.51 crore in Adani Kandla Bulk Terminal Private Limited.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1) As required by Section 143(3) of the Act, based on our audit we report, to the extent applicable 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 Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors of the Company as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March,
2018 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, 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 standalone Ind AS financial statements;
ii. 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;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
I) As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure
B" a statement on the matters specified in paragraphs 3 and 4 of the Order.
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Actâ)
We have audited the internal financial controls over financial reporting of Adani Ports and Special Economic Zone Limited
("the Company") as of 31st March, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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. 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 companyâs 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting 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") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 over financial reporting was established and maintained and if 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 system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 judgment, including the assessment of the risks of material misstatement of the 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 system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting 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 control over 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized 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 Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting 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, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2018, based on the criteria for internal financial control over financial reporting 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.
)In respect of fixed assets
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) Some of the fixed assets were physically verified during the year by the Management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed/ transfer deed/ conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and acquired buildings which are freehold, are held in the name of the Company as at the balance sheet date, except the following:
Particulars of the land and building |
Gross Block as at Balance sheet Date (Rs, in crores) |
Net Block as at Balance sheet Date (Rs,in crores) |
Remarks |
Reclaimed land measuring 1112.80 Hectares |
182.96 |
154.96 |
The said land pertains to reclaimed land at the Mundra Port, which are pending to be registered in the name of the Company. (Refer note 3(a)(vi)&(vii) of standalone financial statements) |
Residential Flats and a Hostel Building |
130.75 |
122.94 |
The said flats and building are located at Samundra Township, Mundra and are pending to be registered in the name of the Company. (Refer note 3(a)(iv) of standalone financial statements) |
In respect of immovable properties of land that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.
(ii) As explained to us, the inventories were physically verified
during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us,
the Company has granted unsecured loans to a company covered in the register maintained under section 189 of
the Companies Act, 2013, in respect of which:
(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the
Company''s interest.
(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.
(c) There is no overdue amount remaining outstanding
as at the year-end.
(iv) In our opinion and according to the information and explanations given to us, and considering the legal opinion taken by the Company on applicability of section 185 of the Companies Act, 2013, in respect of certain loan transactions and that the same have been given in the ordinary course of business, the Company has complied with the provisions of Section 185 of the Companies Act, 2013 in respect of grant of loans and providing guarantees and securities, as applicable. Further, based on the information and explanations given to us, the Company has complied with the provisions of Sections 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2014, as amended, would apply. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.
(vi) To the best of our knowledge and according to the information and explanations given to us, the Company is not required to maintain cost records pursuant to Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under section 148(1) of the Companies Act, 2013. (vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues of Provident Fund, Employees'' State Insurance, Income-tax,
Sales Tax, Service Tax, Excise Duty, Custom Duty, Value Added Tax, Goods and Service Tax, cess and other material statutory dues applicable to it to the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Service Tax, Excise Duty, Custom Duty, Value Added Tax, Goods and Service Tax, cess and other material statutory dues in arrears as at 31st March, 2018 for a period of more than six months from the date they became payable.
(c) Details of dues of Income-tax, Service Tax and Customs Duty which have not been deposited as on 31st March, 2018 on account of disputes are given below:
Name of Statute |
Nature of Dues |
Forum where Dispute is Pending |
Period to which the Amount Relates |
Amount Involved (Rs, in Crores) |
Amount Unpaid (Rs, in Crores) |
Customs Act, 1962 |
Custom Duty |
Commissioner of Customs & Excise, Ahmadabad |
June, 2008 |
2.00 |
2.00 |
Assistant Commissioner of Customs, Mundra |
July, 2003 |
0.14 |
0.14 |
||
Deputy Commissioner of Customs, Mundra |
August, 2007 |
0.25 |
0.25 |
||
Finance Act, 1994 |
Service Tax |
Supreme Court |
December, 2004 to March, 2006 |
11.22 |
6.72 |
Commissioner (Appeals) Rajkot |
October, 2003 to August, 2005 |
0.56 |
0.56 |
||
High Court of Gujarat |
April, 2006 to September, 2011 |
173.63 |
173.63 |
||
Commissioner of Service Tax, Ahmedabad |
September, 2009 to March, 2010 |
0.61 |
0.61 |
||
Commissioner/ Additional Commissioner of Service Tax, Ahmedabad |
April, 2011 to March, 2014 |
190.04 |
190.04 |
||
High Court of Gujarat |
April, 2004 to August, 2009 |
6.72 |
6.72 |
||
Commissioner of Service Tax, Ahmedabad |
April, 2009 to March, 2011 |
0.17 |
0.17 |
||
Income Tax Act, 1961 |
Income Tax |
Income Tax Appellate Tribunal |
AY 2009-10 to AY 2011-12 |
71.27 |
71.27 |
Commissioner of Income Tax (Appeal) |
AY 2012-13 to AY 2014-15 |
14.14 |
14.14 |
There are no dues of Sales Tax, Excise Duty, Value Added Tax and Goods and Service Tax as on 31st March, 2018 on account of disputes.
(viii) In our opinion and according to the information and explanations given to us, as at the reporting date, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and dues to debenture holders. The Company has not taken any loans from the government.
(ix) In our opinion and according to the information and explanations given to us, and on an overall examination of the balance sheet, monies raised by way of term loans have been applied by the Company during the year for the purposes for which they were raised, other than temporary deployment pending application of proceeds. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year.
(x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
(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 requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of paragraph 3 of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us and considering the legal opinion taken by the Company on the applicability of Section 188(1)(d) of the Companies Act, 2013, in respect of loans given by the Company to its subsidiary companies, the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(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 reporting under clause (xiv) of paragraph 3 of the Order is 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 him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934
For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm''s Registration No. 117366W/W-100018)
Kartikeya Raval
Place: Ahmedabad (Partner)
Date: May 03, 2018 (Membership No. 106189
Mar 31, 2017
Report on the Ind AS financial statements
We have audited the accompanying standalone Ind AS financial statements of Adani Ports and Special Economic Zone Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss including other comprehensive income, Cash Flow Statement and Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Ind AS financial statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS financial statements give the information required by the 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, 2017, its profit and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to:
(a) Note 38(l) of the accompanying standalone Ind AS financial statements regarding recognition of Minimum Alternate Tax (âMATâ) credit entitlement in respect of certain interest income based on the consideration that the Company would be able to claim tax holiday benefits on the same, as per provisions of section 80IAB of the Income Tax Act, 1961, more fully described in the said note.
(b) Note 41(a) of the accompanying standalone Ind AS financial statements regarding the basis of recognition of certain projects service revenue during the earlier year, as more fully described in the said note.
(c) Note 4(c)(i) of the accompanying standalone Ind AS financial statements which indicates that one of the subsidiary company has accumulated losses and its net worth has been eroded, the subsidiary company has incurred a net cash loss during the current year and previous year. These conditions along with other matters set forth in Note 4(c)(i), indicate the existence of material uncertainty that may impact the subsidiary companyâs ability to continue as a going concern. However, the financial statements of the subsidiary company have been prepared on going concern basis for the reasons stated in the said Note.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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 Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the 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 written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) With respect to the other matters to be included in the Auditorâs 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 standalone Ind AS financial statements - Refer Note 38 to the standalone Ind AS financial statements;
ii. 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 - Refer Note 15 to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
iv. The Company has provided requisite disclosures in Note 43 to these standalone Ind AS financial statements as to the holdings and dealing in Specified Bank Notes as defined in the notification S.O. 3407 (E) dated November, 08, 2016 of the Ministry of Finance during the period from November 8, 2016 to December 30, 2016. Based on the audit procedure performed and the representation provided to us by the management we report that the disclosures are in accordance with the books of accounts maintained by the Company more so described in Note 43.
Annexure 1 referred to in Paragraph 1 of Report on Other Legal and Regulatory Requirements of our report of even date for the year ended March 31, 2017
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has regular programme of physical verification of its fixed assets through which all the fixed assets are verified in a phased manner, over a period of three years. In our opinion, physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to information and explanations given by the management, the title deeds of immovable properties, included in fixed assets except for the immovable property in the nature of reclaimed land having Gross Book Value (GBV) aggregating RS.202.21 crores and Net Book Value (NBV) aggregating RS.171.87 crores and residential flats having GBV of RS.139.94 crores and NBV of RS.125.63 crores which are not registered in the name of the Company. Also refer note 3(a) of the standalone Ind AS financial statements.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted loans to a company covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the companyâs interest.
(b) The Company has granted loans to a firm covered in the register maintained under section 189 of the Companies Act, 2013. The schedule of repayment of principal and payment of interest has been stipulated for the loans granted and the receipts are regular and there were no instalment of loan due during the year.
(c) There are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days.
(iv) In our opinion and according to the information and explanations given to us, and considering the legal opinion taken by the Company on applicability of section 185 of the Companies Act, 2013, in respect of certain loan transaction and that the same have been given in the ordinary course of the business, the Company has complied with the provisions of section 185 of the Companies Act 2013. Further, based on the information and explanations given to us, being an infrastructure company, provision of section 186 of the Companies Act, 2013 is not applicable to the Company and hence not commented upon.
(v) The Company has not accepted any deposits from the public.
(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148(1) of the Companies Act, 2013, for the services of the Company
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income tax, service tax, sales tax, duty of custom, duty of excise, value added tax, cess 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 records of the Company, the dues outstanding of service tax, customs duty, excise duty and income tax on account of any dispute, are as follows:
Name of the statute |
Nature of Tax |
Amount (Rs. in Crores) |
Period to which the amount relates |
Forum where dispute is pending |
|
Customs Act, 1962 |
Custom Duty |
2.00 |
June, 2008 |
Commissioner of Customs & Central Excise, Ahmedabad |
|
Customs Act, 1962 |
Custom Duty |
0.14 |
July, 2003 |
Assistant Commissioner of Customs, Mundra |
|
Customs Act, 1962 |
Custom Duty |
0.25 |
August, 2007 |
Deputy Commissioner of Customs, Mundra |
|
Finance Act, 1994 |
Service Tax |
6.72 |
December 2004 to March 2006 |
Supreme court |
|
Service Tax |
0.56 |
October 2003 to August 2005 |
Commissioner (Appeals) Rajkot |
||
Service Tax |
304.71 |
April 2006 to September 2011 |
High Court of Gujarat |
||
Service Tax |
0.61 |
September 2009 to March 2010 |
Commissioner of Service Tax, Ahmedabad. |
||
Service Tax |
190.04 |
April 2011 to March 2014 |
Commissioner / Addl. Commissioner of Service Tax, Ahmedabad |
||
Finance Act, 1994 |
Service Tax |
6.72 |
April 2004 to August 2009 |
High Court of Gujarat |
|
Service Tax |
0.17 |
April 2009 to March 2011 |
Commissioner of Service Tax, Ahmedabad |
||
Income Tax Act, 1961 |
Income Tax |
75.48 |
AY 2009 - 10 to AY 2011 - 12 |
Income Tax Appellate Tribunal CIT (Appeal) |
|
Income Tax |
6.74 |
AY 2012 - 13 to AY 2013 - 14 |
|||
(viii) In our opinion and according to information and explanations given by the management, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders. The Company does not have any outstanding dues to government during the year.
(ix) In our opinion and according to the information and explanations given by the management and on an overall examination of the balance sheet, the monies raised by way debt instruments in the nature of foreign currency bonds and term loans were applied for the purposes for which those were raised, though idle/surplus funds which were not required for immediate utilization have been temporarily invested in fixed deposits / mutual funds.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the standalone Ind AS financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and hence, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Arpit K Patel
Place of Signature: Ahmedabad Partner
Date: May 24, 2017 Membership Number: 34032
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Adani Ports and Special Economic Zone Limited ("the Company"), which
comprises the Balance Sheet as at March 31, 2016, the Statement of
Profit and Loss and Cash Flow Statement for the year then ended, and a
summary of significant accounting policies and other explanatory
information
Management''s Responsibility for the Financial Statements
The Company''s 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 standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with accounting principles
generally accepted in India, including the Accounting Standards
specified under section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014, 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 the design,
implementation and maintenance of adequate internal financial control
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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing, issued by the
Institute of Chartered Accountants of India, as specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company''s
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Company''s Directors, as well as evaluating the
overall presentation of the financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the standalone financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the standalone financial statements give the
information required by the 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, 2016, its profit, and its cash flows for the year ended on
that date.
Emphasis of Matter
We draw attention to
(a) Note 36(m) of the accompanying standalone financial statements
regarding recognition of Minimum Alternate Tax (''MAT'') credit
entitlement in respect of certain interest income based on the
consideration that the Company would be able to claim tax holiday
benefit on thesame, asper provision of section 80IAB of the Income Tax
Act, 1961, more fully described in the said note.
(b) Note 39 of the accompanying standalone financial statements
regarding the basis of recognition of certain projects service revenue
during the previous year, as more fully described in the said note.
(c) Note 42 of the accompanying standalone financial statements
regarding the accounting treatment followed by, as per the composite
scheme of arrangement between Adani Enterprises Limited and the
Company, approved by the High Court of Gujarat.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2016 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure 1 a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose 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 Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement 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 Accounting Standards specified under section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of written representations received from the directors
as on March 31, 2016, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2016, from being
appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financia controls over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in "Annexure 2" to this
report;
(g) With respect to the other matters to be included in the Auditor''s
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 36 to the
financial statements;
ii. 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 - Refer Note 8
to the financial statements;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company
Annexure 1 referred to in Paragraph 1 of Report on Other Legal and
Regulatory Requirements of our report of even date for the year ended
March 31, 2016
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has regular programme of physical verification of its
fixed assets through which all the fixed assets are verified in a
phased manner, over a period of three years. In our opinion, physical
verification is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
such verification.
(c) According to information and explanations given by the management,
the title deeds of immovable properties, included in fixed assets
except for the immovable property in the nature of reclaimed land
having Gross BookValue (6BV) aggregating Rs.202.21 crores and Net Book
Value (NBV) aggregating Rs. 181.35 crores and residential flats having
6BV of Rs. 131.04 crores and NBV of Rs. 119.33 crores which are not
registered in the name of the Company. Also refer note 12 of the
financial statements.
(ii) The management has conducted physical verification of inventory at
reasonable intervals during the year and no material discrepancies were
noticed on such physical verification.
(iii) (a) The Company has granted loans to twenty two companies covered
in the register maintained under section 189 of the Companies Act,
2013. The loans have been granted based on approval of Finance
Committee at varying terms and conditions which in our opinion and
according to the information and explanations given to us, the terms
and conditions are generally not prejudicial to the Company''s interest.
(b) In respect of loans granted to parties covered in the register
maintained under section 189 of the Companies Act, 2013, repayment of
the principal amount and payment of interest has been regular, except,
in respect of certain loan transactions aggregating Rs. 4,500.35 crores
whereby the Company has amended/extended/rolled over the Schedule of
repayment of principal and payment of interest, rate of interest, than
as stipulated at the time of grant of loan
(c) Read with paragraph (iii)(b) above, there are no amounts of loans
granted to companies, firms or other parties listed in the register
maintained under section 189 of the Companies Act, 2013 which are
overdue for more than ninety days,
(iv) In our opinion and according to the information and explanations
given to us, and considering the legal opinion taken by the Company on
applicability of section 185 of the Companies Act, 2013, in respect of
certain loan transactions and that the same have been given in the
ordinary course of the business, the Company has complied with the
provisions of section 185 of the Companies Act 2013. Further, based on
the information and explanations given to us, being an infrastructure
company, provision of section 186 of the Companies Act, 2013 is not
applicable to the Company and hence not commented upon
(v) The Company has not accepted any deposits from the public,
(vi) To the best of our knowledge and as explained, the Central
Government has not specified the maintenance of cost records under
clause 148(1) of the Companies Act, 2013, for the services of the
Company,
(vii) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employees'' state insurance, income tax, sales tax, service tax, duty of
customs, duty of excise, value added tax, cess and other material
statutory dues applicable to it
(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, duty of custom,
duty of excise, value added tax, cess 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 records of the Company, the dues outstanding of
service tax, customs duty, excise duty and income tax on account of any
dispute, are as follows
Name of Nature of Amount Period to which
the amount Forum where dispute
is pending
Statute Tax (Rs. in
Crores) relates
Customs Act, Custom Duty 2.00 Jun-08 Commissioner of
Customs 8-Central
Excise,
1962 Ahmedabad
Customs Act, Custom Duty 0.14 July, 2003 Assistant
Commissioner of
Customs,
1962 Mundra
Customs Act, Custom Duty 0.25 August, 2007 Deputy
Commissioner of
Customs, Mundra
1962
Finance Act, Service Tax 6.72 December 2004
to March Supreme court
1994 2006
Service Tax 0.56 October 2003 to
August Commissioner
(Appeals) Rajkot
2005
Service Tax 42.51 April 2006 to
September Customs, Excise
and Service
Tax Appellate
2007 Tribunal, Ahmedabad
Service Tax 66.96 October 2007 to
September Customs, Excise and
Service Tax
Appellate
2008 Tribunal, Ahmedabad
Service Tax 77.54 October 2008 to
September Customs, Excise
and Service
Tax Appellate
2009 Tribunal, Ahmedabad
Service Tax 0.61 September 2009
to March Commissioner of
Service Tax,
Ahmedabad 2010
Service Tax 116.84 October 2009 to
September Customs, Excise and
Service Tax
Appellate
2011 Tribunal, Ahmedabad
Finance Act, Service Tax 0.87 April 2011 to September Customs,
Excise and
Service Tax
Appellate
1994 2011 Tribunal, Ahmedabad
Service Tax 30.64 April 2011 to
March 2012 Commissioner of
Service Tax,
Ahmedabad
Service Tax 23.36 April 2012 to
September Commissioner/Addl.
Commissioner of
2012 Service Tax,
Ahmedabad
Service Tax 28.35 October 2012 to
March 2013 Commissioner/Joint
Commissioner of
Service Tax,
Ahmedabad
Service Tax 26.06 April 2013 to
September Commissioner/Joint
Commissioner of
2013 Service Tax,
Ahmedabad
Service Tax 34.41 October 2013
to March Commissioner/Joint
Commissioner of
2014 Service Tax,
Ahmedabad
Finance Act, ServiceTax 6.72 April 2004 to
August 2009 High Court of
Gujarat
1994 Service Tax 0.15 April 2009 to
March 2010 Commissioner of
Service Tax,
Ahmedabad
Service Tax 0.02 2010-11 Commissioner of
Service Tax,
Ahmedabad
Income Tax Income Tax 19.76 AY 2009-10 Income Tax
Appellate Tribunal
Act 1961 Income Tax 11.98 AY 2010-11
Income Tax 41.29 AY 2011-12
Income Tax 12.59 AY 2012-13 CIT (Appeal)
(viii) In our opinion and according to information and explanations
given by the management, the Company has not defaulted in repayment of
dues to financial institutions, banks or debenture holders. The Company
does not have any outstanding dues to government during the year.
(ix) In our opinion and according to the information and explanations
given by the management and on an overall examination of the balance
sheet, the monies raised by way debt instruments in the nature of
foreign currency bonds and term loans were applied for the purposes for
which those were raised, though idle/ surplus funds which were not
required for immediate utilization have been temporarily invested in
fixed deposits/ mutual funds.
(x) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and
according to the information and explanations given by the management,
we report that no fraud by the Company or no fraud on the Company by
the officers and employees of the Company has been noticed or reported
during the year.
(xi) According to the information and explanations given by the
management, we report that the managerial remuneration has been paid /
provided in accordance with the requisite approvals mandated by the
provisions of section 197 read with Schedule V to the Companies Act,
2013.
(xii) In our opinion, the Company is not a nidhi company. Therefore,
the provisions of clause 3(xii) of the order are not applicable to the
Company and hence not commented upon.
(xiii) According to the information and explanations given by the
management and considering the legal opinion obtained by the management
in respect of transactions related to advance given for purchase of
equity shares and certain immovable properties that these transactions
have been entered into with the related parties in the ordinary course
of business and transactions with related parties are in compliance
with section 177 and 188 of Companies Act, 2013 where applicable and
the details have been disclosed in the notes to the financial
statements, as required by the applicable accounting standards,
(xiv) According to the information and explanations given to us and on
an overall examination of the balance sheet, the company has not made
any preferential allotment or private placement of shares or fully or
partly convertible debentures during the year under review and hence,
reporting requirements under clause 3(xiv) are not applicable to the
Company and hence, not commented upon
(xv) According to the information and explanations given by the
management, the Company has not entered into any non-cash transactions
with directors or persons connected with him as referred to in section
192 of Companies Act, 2013
(xvi) According to the information and explanations given to us, the
provisions of section 45-IA of the Reserve Bank of India Act, 1934 are
not applicable to the Company
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Arpit K. Patel
Place of Signature: Ahmedabad Partner
Date : May 03, 2016 Membership Number: 34032
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Adani Ports and Special Economic Zone Limited ("the Company"), which
comprise the Balance Sheet as at March 31,2015, the Statement of Profit
and Loss and Cash Flow Statement for the year then ended, and a summary
of significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s 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 standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with accounting principles
generally accepted in India, including the Accounting Standards
specified under section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility 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 the design,
implementation and maintenance of adequate internal financial control
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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing issued by the
Institute of Chartered Accountants of India, as specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company''s
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the effectiveness of such
controls. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Company''s Directors, as well as evaluating the
overall presentation of the financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the standalone financial
statements.
Opinion
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
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 31,2015, of its
profit and its cash flows for the year ended on that date.
Emphasis of Matter
(i) We draw attention to Note 40 of the financial statements regarding
the basis of recognition of project service revenue for the year ended
March 31,2015, as more fully described in the said note.
(ii) We draw attention to Note 37(o) of the financial statements
regarding the recognition of Minimum Alternate Tax (''MAT'') Credit
Entitlement in respect of certain interest income based on the
consideration that the Company would be able to claim tax benefit on
the same, as per provision of section 80IAB of the Income Tax Act,
1961, more fully described in the said note.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure 1 a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose 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 Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement 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 Accounting Standards specified under section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of written representations received from the directors
as on March 31,2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the other matters to be included in the Auditor''s
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 37 to the
financial statements;
ii. 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 - Refer Note 8 to
the financial statements;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure referred to in paragraph 1 on other legal and regulatory
requirement of our report of even date Re: Adani Ports and Special
Economic Zone Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has regular programme of physical verification of its
fixed assets through which all the fixed assets are verified in a
phased manner, over a period of three years. In our opinion, physical
verification is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
such verification.
(ii) (a) The inventory of stores and spares, fuel and lubricants has
been physically verified by the management during the year. In our
opinion, the frequency of such physical verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) The Company has granted loans to fourteen companies covered
in the register maintained under section 189 of the Companies Act, 2013.
In respect of loans granted, repayment of the principal amount is as stipulated and payment of interest has been regular.
(b) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under section 189 of
the Companies Act, 2013.
(iv) Part of the Company''s purchases of fixed assets and sale of
services are stated to be of unique and specialized nature, and hence,
in such cases, the comparison of prices with the market rates or with
purchases from/sales to other parties cannot be made. Read with the
above, in our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of services.
The activities of the Company do not involve sale of goods. During the
course of our audit, we have not observed any major weakness or
continuing failure to correct major weakness in internal control system
of the company in respect of these areas.
(v) The Company has not accepted any deposits from the public.
(vi) To the best of our knowledge and as explained, the Central
Government has not specified the maintenance of cost records under
clause 148(1) of the Companies Act, 2013, for the services of the
Company.
(vii) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
employees'' state insurance, income-tax, sales tax, wealth tax, service
tax, customs duty, excise duty, value added taxes, cess and other
material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income tax,
wealth tax, service tax, sales tax, customs duty, excise duty and other
undisputed 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 explanation given to us, the dues
outstanding of service tax, customs duty, excise duty and income tax on
account of any dispute, are as follows:
Name of the Statute Nature of Tax Amount in Period to which the
Rs Crores amount relates
Customs Act, 1962 Custom Duty 2.00 June, 2008
Custom Duty 0.14 July, 2003
Custom Duty 0.25 August, 2007
Cost recovery 6.16 FY 2013-14 &
charges 2014-15
Finance Act, 1994 Service Tax 6.72 December, 2004 to
March, 2006
Service Tax 0.56 October, 2003 to
August, 2005
Service Tax 42.51 April, 2006 to
March, 2008
Service Tax 66.96 October, 2007 to
September, 2008
Service Tax 77.54 October, 2008 to
September, 2009
Service Tax 0.61 September, 2009 to
March, 2010
Service Tax 116.84 October, 2009 to
September, 2011
Service Tax 0.87 April, 2011 to
September, 2011
Service Tax 30.64 April, 2011 to
March, 2012
Service Tax 23.36 April, 2012 to
September, 2012
Service Tax 28.35 October, 2012 to
March, 2013
Finance Act, 1994 Service Tax 6.72 April, 2004 to
August, 2009
Service Tax 0.15 April, 2009 to
March, 2010
Service Tax 0.02 2010-11
Income Tax Act, 1961 Income Tax 10.15 AY 2009-10
Income Tax 1.67 AY 2010-11
Income Tax 47.59 AY 2011-12
Name of the Statute Forum where dispute is pending
Customs Act 1962 Commissioner of Customs and Central Excise,
Ahmedabad
Assistant Commissioner of Customs, Mundra
Deputy Commissioner of Customs, Mundra
Commissioner of Customs, Mundra
Finance Act 1994 High Court of Gujarat
Commissioner (Appeals) Rajkot
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Commissioner of Service Tax, Ahmedabad
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Commissioner of Service Tax, Ahmedabad
Commissioner / Addl. Commissioner of Service Tax,
Ahmedabad
Commissioner / Joint Commissioner of Service Tax,
Ahmedabad
Finance Act 1994 High Court of Gujarat
Commissioner of Service Tax, Ahmedabad
Commissioner of Service Tax, Ahmedabad
Income Tax Act 1961 Income Tax Appellate Tribunal
(d) According to the information and explanations given to us, the
amount required to be transferred to investor education and protection
fund in accordance with the relevant provisions of the Companies Act,
1956 (1 of 1956) and rules made thereunder has been transferred to such
fund within time.
(viii) The Company has no accumulated losses at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
(ix) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, banks or debenture holders.
(x) According to the information and explanations given to us, the
Company has given guarantees for loans taken by others from banks, the
terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company.
(xi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained, though idle/ surplus funds which were not required for
immediate utilization have been invested in Fixed Deposits and Inter
Corporate Deposits.
(xii) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E
per Arpit K Patel
Place of signature : Ahmedabad Partner
Date : May 1, 2015 Membership Number: 34032
Mar 31, 2014
We have audited the accompanying financial statements of Adani Ports
and Special Economic Zone Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2014, and the Statement of Profit and
Loss and Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956 read with
General Circular 8/2014 dated April 4, 2014, issued by the Ministry of
Corporate Affairs. This responsibility includes the design,
implementation and maintenance of internal control 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Companies Act, 1956 ("the Act") in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) We have 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 as required by law have been
kept by the Company so far as appears from our examination of those
books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
notified under the Companies Act, 1956 read with General Circular
8/2014 dated April 4, 2014, issued by the Ministry of Corporate
Affairs;
(e) On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure referred to in paragraph 1 on other legal and regulatory
requirement of our report of even date
Re: Adani Ports and Special Economic Zone Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has regular programme of physical verification of its
fixed assets through which all the fixed assets are verified in a
phased manner, over a period of three years. In our opinion, physical
verification is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
such verification.
(c) There was no disposal of a substantial part of fixed assets during
the year.
(ii) (a) The inventory of stores and spares, fuel and lubricants has
been physically verified by the management during the year. In our
opinion, the frequency of such physical verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) The Company has granted loan to fifteen companies covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount outstanding during the year was Rs. 4,118.91 crore and
the year end balance of loans granted to such parties was Rs. 2,974.67
crore.
(b) The Company has given interest-free loans of Rs. 961.04 crore to
certain subsidiaries and an associate company. According to the
information and explanations given to us, and having regard to
management''s representation that the interest free loans are given to
subsidiaries of the Company in the interest of the Company''s business,
the rate of interest and other terms and conditions for such loans are
not prima facie prejudicial to the interest of the Company.
(c) In respect of loan granted, repayment of the principal amount is as
stipulated except where loan granted are repayable on demand. The
Interest (excluding interest free loan) is generally payable annually
except where the Company has discretion.
(d) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956.
(e) The Company had taken loan from one company covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
amount involved during the year was Rs. 223.00 crore and the year end
balance of loans taken from such party was Rs. Nil.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(g) In respect of loans taken, repayment of the principal amount is as
stipulated and payment of interest has been regular.
(iv) Part of the Company''s purchases of fixed assets and sale of
services are stated to be of unique and specialized nature, and hence,
in such cases, the comparison of prices with the market rates or with
purchases from/sales to other parties cannot be made. Read with the
above, in our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of services.
The activities of the Company do not involve sale of goods. During the
course of our audit, we have not observed any major weakness or
continuing failure to correct major weakness in internal control system
of the company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that there are no particulars of
contracts or arrangements that need to be entered into the register
maintained under section 301 of the Companies Act, 1956. Accordingly,
the provisions of clause 4(v)(b) of the Companies (Auditor''s Report)
Order, 2003 (as amended), are not applicable to the Company and hence
not commented upon.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, related to the processing activity pertaining to harboring,
berthing, docking, elevating, towing, handling and warehousing
products, and 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 same.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees'' state insurance,
income-tax, sales tax, wealth tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income tax,
wealth tax, service tax, sales tax, customs duty, excise duty and other
undisputed 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 explanation given to us, the dues
outstanding of service tax, customs duty, excise duty and income tax on
account of any dispute, are as follows:
(Rs. In Crore)
Name Nature of Tax Amount Period to which
of the reported in the amount
statute FY 2014 relates
Customs Custom Duty 2.00 June, 2008
Act, 1962
bCustoms Custom Duty 0.27 November, 2004
Act, 1962
Customs Custom Duty 0.14 July, 2003
Act, 1962
Customs Custom Duty 0.25 August, 2007
Act, 1962
Finance Service Tax 6.72 December, 2004 to
Act, 1994 March, 2006
Name of the Statue Forum where dispute is pending
Customs
Act, 1962 Commissioner of Customs and
Central Excise, Ahmedabad
Customs
Act, 1962 Customs, Excise and Service Tax
Appellate Tribunal, Mumbai
Customs
Act, 1962 Assistant Commissioner of Customs,
Mundra
Customs
Act, 1962 Deputy Commissioner of Customs,
Mundra
Finance
Act, 1994 High Court of Gujarat
Name Nature of Tax Amount Period to which
of the reported in the amount
statute FY 2014 relates
Finance Service Tax 0.56 October, 2003 to
Act, 1994 August, 2005
Service Tax 42.51 April, 2006 to
September, 2006
Service Tax 33.48 October, 2007 to
September, 2008
Service Tax 38.77 October, 2008 to
September, 2009
Service Tax 0.61 October, 2009 to
March, 2010
Service Tax 58.44 October, 2009 to
September, 2011
Service Tax 31.08 April, 2011 to
March, 2012
Finance Service Tax 6.72 April, 2004 to
Act, 1994 August, 2009
Service Tax 0.15 April, 2009 to
March, 2010
Service Tax 0.02 Financial year
2010-11
Income Tax Income Tax 9.74 AY 2009-10
Act, 1961 Income Tax 0.92 AY 2010-11
Income Tax 51.77 AY 2011-12
Name of the Statue Commissioner (Appeals) Rajkot
Finance
Act, 1994 Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Commissioner of Service Tax,
Ahmedabad
Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad
Commissioner of Service Tax,
Ahmedabad
Finance
Act, 1994 High Court of Gujarat
Commissioner of Service Tax,
Ahmedabad
Commissioner of Service Tax,
Ahmedabad
Income Tax
Act, 1961 Commissioner of Income Tax
(Appeals)
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, banks or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are
not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantees for loans taken by others from banks, the
terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained, though idle/surplus funds which were not required for
immediate utilization have been invested in Fixed Deposits and given as
Inter-Corporate deposits.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) According to information and explanation given to us and based on
records, the Company has created security in respect of debentures
issued.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. Batliboi & Associates
LLP ICAI
Firm Registration Number: 101049W
Chartered Accountants
per Arpit K. Patel
Place of Signature : Ahmedabad Partner
Membership Number: 34032
Date: May 15, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Adani Ports
and Special Economic Zone Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2013, and the Statement of Profit and
Loss and Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the Auditors'' judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to Note 40 to the financial statements recording sale
of investments in Australia subsidiaries, on the basis indicated in the
note, whereby profit of Rs. 70.01 crores have been recognized in the
books. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) We have 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 as required by law have been
kept by the Company so far as appears from our examination of those
books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
(e) On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure referred to in paragraph 1 on other legal and regulatory
requirement of our report of even date
Re: Adani Ports &Special Economic Zone Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a regular programme of physical verification of its
fixed assets through which all the fixed assets are verified in a
phased manner, over a period of three years. In our opinion physical
verification is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
such verification.
(c) As referred in note 33, the Company is holding assets of the value
of Rs. 1,013.38 crores as held for sale as at year end. Based on the
information and explanations given by the management and on the basis
of audit procedures performed by us, we are of the opinion that fixed
assets held for sale has not affected the going concern status of the
Company.
(ii) (a) The inventory of stores and spares, fuel and lubricants has
been physically verified by the management during the year. In our
opinion, the frequency of such physical verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, the
provisions of clause 4 (iii) (a) to (d) of the Companies (Auditors
Report) Order, 2003 (as amended), are not applicable to the Company and
hence not commented upon.
(e) According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured from companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly, the provisions of clause 4
(iii) (e) to (g) of the Companies (Auditors Report) Order, 2003 (as
amended), are not applicable to the Company and hence not commented
upon.
(iv) Part of the Company''s purchases of fixed assets and sale of
services are stated to be of unique and specialized nature, and hence,
in such cases, the comparison of prices with the market rates or with
purchases from/sales to other parties cannot be made. Read with the
above, in our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of services.
The activities of the Company do not involve sale of goods. During the
course of our audit, we have not observed any major weakness or
continuing failure to correct major weakness in internal control system
of the company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that there are no particulars of
contracts or arrangements that need to be entered into the register
maintained under section 301 of the Companies Act, 1956. Accordingly,
the provisions of clause 4 (v)(b) of the Companies (Auditors Report)
Order, 2003 (as amended), are not applicable to the Company and hence
not commented upon.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, related to the processing activity pertaining to harboring,
berthing, docking, elevating, towing, handling and warehousing
products, and 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 same.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and
other material statutory dues have generally been regularly deposited
with the appropriate authorities though there have been slight delay in
deposit of service tax in few cases and wealth-tax.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty and other
undisputed 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 explanation given to us, the dues
outstanding of service tax, customs duty and excise duty on account of
any dispute, are as follows:
Name Nature of dues Amount Period to
which Forum where
of the (Rs. in
Crores) the amount dispute is
pending
statue relates
Customs Show cause notice
from the Custom
Authorities for 0.27 November, Customs, Excise
and
Act, 1962 recovery of custom
duty in relation to
import of Crude 2004 Service tax,
Appellate
Petroleum Oil Tribunal, Mumbai
Customs Show cause notice
from the Custom
Authorities for 0.14 July, 2003 Assistant
Commissioner
Act, 1962 recovery of custom
duty in relation to
import of of Customs,
Mundra
Acrylonitrile
Customs Demand Notice from
Deputy Commissioner
of Customs 0.25 August, Deputy
Commissioner
Act, 1962 directing to pay duty
by holding that
Company wrongly 2007 of Customs,
Mundra
availed duty benefit
under DFCEC Scheme
on import of
equipment
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to banks or debenture
holders. The Company has not borrowed funds from financial
institutions.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are
not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from banks, the
terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company. According to the
information and explanations given to us, the Company has not given any
guarantee for loans taken by others from financial institutions.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained, though idle/surplus funds which were not required for
immediate utilization have been invested in fixed deposits and given as
Inter-Corporate deposits.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) According to information and explanation given to us and based on
records, the Company has created security in respect of debentures
issued in earlier and current year except for debentures aggregating to
Rs. 989 crores issued during the year. We are informed by the
management that the Company is taking steps to create security for the
debentures.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. Batliboi & Associates LLP
ICAI Firm Registration Number: 101049W
Chartered Accountants
per Arpit K. Patel
Place : Ahmedabad Partner
Date: May 15, 2013 Membership Number: 34032
Mar 31, 2012
1. We have audited the attached Balance Sheet of Adani Ports and
Special Economic Zone Limited (formerly known as Mundra Port and
Special Economic Zone Limited) ('the Company') as at March 31, 2012 and
also the statement of profit and loss and the cash flow statement for
the year ended on that date annexed thereto. These financial statements
are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003 (as
amended) ("the Order") issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we
enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The balance sheet, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, statement of profit and loss
and cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
v. On the basis of the written representations received from the
directors as on March 31, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act,1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2012;
b) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of our report of even date
Re: Adani Ports & Special Economic Zone Limited ('the Company')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(c) There was no disposal of a substantial part of fixed assets during
the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the
frequency of such physical verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans,
secured or unsecured to companies, firms or other parties covered in
the register maintained under section 301 of the Companies Act, 1956.
Accordingly, the provisions of clause (iii) (a) to (d) of the Companies
(Auditors Report) Order, 2003 (as amended), are not applicable to the
Company and hence not commented upon.
(e) According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured from companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly, the provisions of clause
(iii) (e) to (g) of the Companies (Auditors Report) Order, 2003 (as
amended), are not applicable to the Company and hence not commented
upon.
(iv) Part of the Company's purchases of fixed assets and sale of
services are stated to be of unique and specialized nature, and hence,
in such cases, the comparison of prices with the market rates or with
purchases from/sales to other parties cannot be made. Read with the
above, in our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct major weakness in
internal control system of the company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion
that there are no particulars of contracts or arrangements that need to
be entered into the register maintained under section 301 of the
Companies Act, 1956. Accordingly, the provisions of clause (v)(b) of
the Companies (Auditors Report) Order, 2003 (as amended), are not
applicable to the Company and hence not commented upon.
(vi) The Company has not accepted any deposits from the public
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, related to the processing activity pertaining to harboring,
berthing, docking, elevating, towing, handling and warehousing
products, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues
including provident fund, investor education and protection fund,
employees' state insurance, income-tax, sales-tax, wealth-tax, service
tax, customs duty, excise duty and other material statutory dues
applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty and other
undisputed 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 records of the Company, the dues outstanding of
service tax, customs duty and excise duty on account of any dispute,
are as follows:
Name Nature of dues Amount Period to which Forum where
of the (Rs in
lacs) the amount dispute ispending
statute relates
Customs Show cause notice
from the Custom 26.60 November, Customs, Excise
and
Act, 1962 Authorities for
recovery of
custom duty 2004 Service Tax
Appellate
in relation to
import of Crude
Petroleum Oil
Tribunal, Mumbai
Customs Show cause notice
from the Custom 14.20 July, 2003 Assistant
Commissioner
Act, 1962 Authorities for
recovery of
custom duty in of Customs,Mundra
relation to
import of
Acrylonitrile
Customs Show cause
notice from
the Custom 207.15 March, Customs, Excise
and
Act, 1962 Authorities
for recovery
of custom duty, 2005 Service Tax
Appellate
fine and penalty
on the import of
a tug Tribunal,
Ahmedabad
and bunkers
Customs Demand Notice
from Deputy
Commissioner 4.62 2005-06 Deputy
Commissioner
Act, 1962 of Customs
directing to
pay education
cess of Customs,
Mundra
against import
of Steel Sole
Plates
Customs Demand Notice
from Deputy
Commissioner 25.03 August, Deputy
Commissioner
Act, 1962 of Customs
directing to
pay duty by
holding 2007 of Customs,
Mundra
that Company
wrongly availed
duty benefit
under DFCEC
Scheme on import
of equipment
Customs Demand Notice
from Assistant
Commissioner 1.28 January, Commissioner of
Act, 1962 of Customs
directing to
pay duty by
holding 2008 Customs(Appeals),
that Company
wrongly availed
duty benefit Mumbai
on import of
equipment
components
Customs Demand Notice
from Commissioner
of 200.00 June, 2008 Commissioner of
Act, 1962 Customs for
recovery of
penalty in Customs & Central
connection with
import of
aircraft, Excise, Ahmedabad
owned by
Karnavati
Aviation Private
Limited
- Subsidiary of
the Company.
Name Nature of dues Amount Period to
which Forum where
of the (Rs in lacs) the amount dispute is
pending
statute relates
Customs Show cause notice
from the Cust om 5.00 May, 2010 Commissioner of
Act, 1962 Authorities for
recovery of
penalty in Customs
(Appeals),
relation to
import of gas
oil (HSD) Kandla
Finance Show Cause Notice
from Commissioner
of 671.57 December, High Court of
Gujarat
Act, 1994 Customs and
Central Excise
disallowing and 2004 to
recovering duty,
interest and
penalty holding March, 2006
that Company
wrongly availed
Service Tax
Credit/ Cenvat
Credit and
Education Cess
on steel and
cement etc.
(Net of deposit
Rs. 450 lacs)
Finance Show Cause Notice
from Commissioner 4,608.83 April, 2006 Commissioner of
Act, 1994 of Customs and
Central Excise
disallowing to March, Customs and
Central
and recovering
duty, interest
and penalty 2009 Excise, Rajkot
holding that
Company wrongly
availed 797.90 April, 2009 Commissioner of
Service Tax
Credit/ Cenvat
Credit and to March, Service Tax,
Education Cess
on steel and
cement etc. 2010 Ahmedabad.
80.79 October, Commissioner of
2009 to Service Tax,
March, 2010 Ahmedabad.
114.14 April, 2010 Commissioner of
to Service Tax,
September, Ahmedabad.
2010
Finance Show cause
notices
received from 672.46 April, 2004 High Court of
Act, 1994 Commissioner
of Customs
and Central to August, Gujarat
Excise, Rajkot
and Commissioner
of Service 2009
Tax, Ahmedabad
in respect of
levy of 15.48 April, 2009 Customs,
Excise and
service tax on
various services
provided by
to March, Service Tax
Appellate
the Company and
wrong availment of 2010 Tribunal,
Ahmedabad
CENVAT credit by
the Company. 1.78 2010-11 Commissioner of
Service Tax,
Ahmedabad
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, banks or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are
not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantees for credit facilities taken by the body
corporates from bank or financial institutions, the terms and
conditions whereof in our opinion are not prima-facie prejudicial to
the interest of the Company.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii)The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section
301 of the Companies Act, 1956.
(xix) The Company has created security or charge in respect of
debentures issued in earlier years and outstanding at the year end.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. Batliboi & Associates
Firm registration number: 101049W
Chartered Accountants
per Arpit K. Patel
Place: Ahmedabad Partner
Date: May 14, 2012 Membership No.: 34032
Mar 31, 2010
1. We have audited the attached Balance Sheet of Mundra Port And
Special Economic Zone Limited (the Company) as at March 31, 2010 and
also the Profit and Loss Account and the Cash Flow Statement for the
year ended on that date annexed thereto. These financial statements are
the responsibility of the Companys management. Our responsibility is
to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) ("the Order") issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we
enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Without qualifying our opinion, we draw attention to Note No. 9 in
Schedule 23 to the financial statements in respect of eligibility for
income tax holiday as per provisions of Section 80-IAB of the Income
Tax Act, 1961.
5. Further to our comments in the Annexure referred to above, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
v. On the basis of the written representations received from the
directors as on March 31, 2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act,1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31,2010;
b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph [3] of our report of even date Re:
Mundra Port And Special Economic Zone Limited (the Company)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years which in our opinion is reasonable having regard
to the size of the Company and the nature of its assets. Pursuant to
the programme, a portion of the fixed assets has been physically
verified by the management during the year and no material
discrepancies were noticed on such verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) In respect of loans, secured or unsecured, granted by the Company
to companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956, according to the
information and explanations given to us:
(a) The Company has granted unsecured loans to two subsidiary companies
during the year, one of which is a wholly owned subsidiary. In respect
of the said loans, the maximum amount involved during the year was Rs.
15,136.50 lacs and the year end balance of loans granted to such
parties was Rs. 14,986.50 lacs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans, including interest free loan given to wholly owned
subsidiary, are not prima facie prejudicial to the interest of the
Company.
(c) The loans granted are repayable on demand and there is no repayment
schedule. The interest wherever applicable is payable on demand.
(d) In respect of the said loans, the same are repayable on demand and
therefore the question of overdue amounts does not arise. In respect of
interest, there are no overdue amounts.
(e) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, the
provisions of clause (iii) (f) and (g) of the Companies (Auditors
Report) Order, 2003 (as amended), are not applicable to the Company.
(iv) Part of the Companys purchases of fixed assets and sale of
services are stated to be of unique and specialized nature, and hence,
in such cases, the comparison of prices with the market rates or with
purchases from/sales to other parties cannot be made. Read with the
above, in our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of services.
During the course of our audit, no major weakness has been noticed in
the internal control system in respect of these areas. The Company does
not sell any goods due to the nature of its business.
(v) According to the information and explanations provided by the
management, we are of the opinion that there are no particulars of
contracts or arrangements that need to be entered into the register
maintained under Section 301 of the Companies Act, 1956.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) As the Company does not manufacture any products, the provisions
of clause (viii) of the Companies (Auditors Report) Order, 2003 (as
amended) regarding maintenance of cost records under clause (d) of
sub-section (1) of Section 209 of the Companies Act, 1956 are not
applicable.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
Further, since the Central Government has till date not prescribed the
amount of cess payable under Section 441A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the Company in depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed 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 records of the Company, there are no dues
outstanding for income-tax, wealth-tax, service tax, customs duty,
excise duty and cess on account of any dispute, except as follows:
Name of the Nature of dues Amount
statute (Rs. lacs)
Customs Act, 1962 Show cause notice from the
Custom Authorities 26.60
for recovery of custom duty in
relation to import of Crude
Petroleum Oil
Customs Act, 1962 Show cause notice from the Custom
Authorities 14.20
for recovery of custom duty in
relation to import of Acrylonitrile
Customs Act, 1962 Show cause notice from the Custom
Authorities 207.15
for recovery of custom duty, fine
and penalty on the import of a
tug and bunkers
Customs Act, 1962 Order from Deputy Commissioner
of Customs, 2.62
Mundra directing to pay differential
duty and penalty for short delivery
of imported goods of various customers
Customs Act, 1962 Order from Deputy Commissioner
of Customs 7.59
directing to pay differential duty
and penalty for short delivery of
imported goods of various customers
Customs Act, 1962 Demand Notice from Deputy
Commissioner 4.62
of Customs directing to pay education
cess against import of Steel Sole Plates
Customs Act, 1962 Demand Notice from Deputy
Commissioner of 25.03
Customs directing to pay duty by
holding that Company wrongly availed
duty benefit under DFCEC Scheme on
import of equipment
Customs Act, 1962 Demand Notice from Assistant
Commissioner 1.28
of Customs directing to pay duty by
holding that Company wrongly availed
duty benefit on import of equipment
components
Finance Act, 1994 Show Cause Notice from
Commissioner of 871.57
Customs and Central Excise
disallowing and recovering duty,
interest and penalty holding
that Company wrongly availed
Service Tax Credit/Cenvat Credit
and Education Cess on steel and
cement etc. (Net of deposit Rs. 250
lacs)
Finance Act, 1994 Show Cause Notice from
Commissioner of 4,608.83
Customs and Central Excise
disallowing and recovering duty,
interest and penalty holding
that Company wrongly availed Service Tax
Credit/Cenvat Credit and Education Cess on
steel and cement etc.
Customs Act, 1962 Demand Notice from Commissioner
of Customs 200.00
for recovery of penalty in
connection with import of aircraft,
owned by Karnavati Aviation
Private Limited, Subsidiary of the
Company.
Name of the Period in which the Forum where dispute
Statue amount relatesis pending
Customs Act, 1962 November, 2004 Customs, Excise and Service
Tax Appellate Tribunal, Mumbai
Customs Act, 1962 July 3, 2003 Assistant Commissioner of
Customs, Mundra
Customs Act, 1962 March, 2005 Customs, Excise and Service
Tax Appellate Tribunal,
Ahmedabad
Customs Act, 1962 March, 2007 Commissioner of Customs
(Appeals), Ahmedabad
Customs Act, 1962 February, 2007 Commissioner of Customs
(Appeal), Ahmedabad
Customs Act, 1962 2005-06 Deputy Commissioner of
Customs, Mundra
Customs Act, 1962 August, 2007 Deputy Commissioner of
Customs, Mundra
Customs Act, 1962 January, 2008 Assistant Commissioner of
Customs, Mumbai
Finance Act, 1994 2005-06 High Court of Gujarat
Finance Act, 1994 April, 2006 to Commissioner of Customs and
March, 2009 Central Excise, Rajkot
Customs Act, 1962 June, 2008 Commissioner of Customs,
Ahmedabad
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, banks or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantees for credit facilities taken by the body
corporates from banks and financial institutions, the terms and
conditions whereof in our opinion are not prima facie prejudicial to
the interest of the Company.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company had issued 11,000
debentures of Rs. 10,00,000 each. The Company has created security or
charge in respect of debentures issued.
(xx) The Company has not raised any money by public issues during the
year. The management has disclosed the end use of monies during the
year, out of public issue raised in the earlier year (Refer Note No. 23
in Schedule 23) and the same has been verified by us.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, which have
been relied upon by us, we report that no fraud on or by the Company
has been noticed or reported during the course of our audit.
For S.R. BATLIBOI & ASSOCIATES
Firm Registration No.: 101049W
Chartered Accountants
per Arpit K. Patel
Partner
Membership No.: 34032
Place: Ahmedabad
Date: May 17,2010
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