TO THE MEMBERS OF
THE TATA POWER COMPANY LIMITED
1. We have audited the attached Balance Sheet of THE TATA POWER COMPANY LIMITED
("the Company"), as at 31st March, 2012, the Statement of Profit and Loss and
the Cash Flow Statement of the Company for the year ended on that date, both 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
2. We conducted our audit in accordance with the 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 misstatements. An
audit includes examining, on a test basis, evidence supporting the amounts and the
disclosures in the financial statements. An audit also includes assessing the accounting
principles used and the significant estimates made by the Management, as well as
evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. Without qualifying our opinion we draw attention to the following matters referred
to in the Notes forming part of the financial statements:
(i) uncertainties relating to the outcome of the Appeal filed before the Hon'ble
Supreme Court. As stated in Note 32 (f) pending outcome of the Appeal filed before the
Hon'ble Supreme Court, no adjustment has been made by the Company in respect of the
standby charges estimated atRs. 519 crore accounted for as revenue in earlier periods and
its consequential effects [Notes 32(f) and (g)] for the years upto 31st March, 2012. The
impact of the above on the results for the year ended 31st March, 2012 cannot presently be
determined pending the ultimate outcome of the matter. Since the Company is of the view,
supported by legal opinion, that the Tribunal's Order can be successfully challenged, no
provision/adjustment has been considered necessary.
(ii) provision for investment in a subsidiary referred to in Note 32(j), which
describes the key source of estimation uncertainty as at 31st March, 2012 relating to the
Company's assessment of the recoverability of carrying amounts of assets including assets
under construction that could result in material adjustment to the carrying amount of the
long-term investment in that subsidiary.
(iii) applicability of depreciation rates as notified by Central Electricity Regulatory
Commission (CERC) to accounting for regulated and non-regulated operations, referred to in
Note 2.1(h)(i) in respect of which the Company has sought clarifications and guidance from
the Ministry of Corporate Affairs.
4. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the
Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we
give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the
5. Read with our comments in paragraph 3 and annexure referred to in paragraph 4 above,
we report as follows:
(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 it appears from our examination of those books;
(iii) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(iv) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in compliance with the Accounting Standards
referred to in Section 211(3C) of the Companies Act, 1956;
(v) 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:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st
(ii) in the case of the Statement of Profit and Loss, of the profit for the year ended
on that date and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on
6. On the basis of the written representations received from the Directors as on 31st
March, 2012 taken on record by the Board of Directors, we report that none of the
directors is disqualified as on 31st March, 2012 from being appointed as a director in
terms of Section 274(1)(g) of the Companies Act, 1956.
For DELOITTE HASKINS & SELLS
Chartered Accountants (Registration No. 117366W)
(Membership No. 71387) Mumbai: 22nd May, 2012
Annexure to the Auditors' Report (Referred to in paragraph 4 of our report of even
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the Management in
accordance with a regular program of verification which, in our opinion, provides for
physical verification of all the fixed assets at reasonable intervals. According to the
information and explanation given to us, no material discrepancies were noticed on such
(c) The fixed assets disposed off during the year, in our opinion, do not constitute a
substantial part of the fixed assets of the Company.
(ii) In respect of its inventory:
(a) As explained to us, the inventories were physically verified during the year by the
Management at reasonable intervals. Materials lying with third parties, have substantially
been physically verified or confirmed by the third parties. In our opinion the frequency
of verification is reasonable.
(b) In our opinion and according to the information and explanations given to us, the
procedures of physical verification of inventories followed by the Management were
reasonable and adequate in relation to the size of the Company and the nature of its
(c) In our opinion and according to the information and explanations given to us, the
Company has maintained proper records of inventories and no material discrepancies were
noticed on physical verification.
(iii) The Company has neither granted nor taken any loans, secured or unsecured,
to/from Companies, firms or other parties listed in the register maintained under Section
301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations given to us,
having regard to the explanations that some of the Services rendered are of special nature
and suitable alternative sources are not readily available for obtaining comparable
quotations, there is an adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of inventory, fixed assets
and the sale of goods and services. During the course of our audit, we have not observed
any major weakness in such internal control system.
(v) In respect of contracts or arrangements entered in the Register maintained in
pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and
belief and according to the information and explanations given to us:
(a) The particulars of contracts or arrangements referred to Section 301 that needed to
be entered in the Register maintained under the said Section have been so entered.
(b) Where each of such transaction is in excess ofRs. 5 lakh in respect of any party,
the transactions have been made at prices which are prima facie reasonable having
regard to the prevailing market prices at the relevant time except in respect of certain
services rendered for which comparable quotations are not available and in respect of
which we are unable to comment.
(vi) According to the information and explanations given to us, the Company has not
accepted any deposits from the public during the year. In respect of unclaimed deposits,
the Company has complied with the provisions of Sections 58A and 58AA or any other
relevant provisions of the Companies Act, 1956.
(vii) In our opinion, the internal audit function carried out during the year by a firm
of Chartered Accountants appointed by the Management has been commensurate with the size
of the Company and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the Company pursuant
to the Companies Cost Accounting Records ( Electricity Industry) Rules, 2011 and Cost
Accounting Records Rules, 2011 prescribed by the Central Government under Section
209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the
prescribed accounts and records have been made and maintained. We have, however, not made
a detailed examination of the cost records with a view to determine whether they are
accurate or complete.
(ix) According to information and explanations given to us in respect of statutory
(a) The Company has generally been regular in depositing undisputed 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 with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Income Tax, Wealth Tax,
Sales Tax, Service Tax, Customs Duty, Excise Duty and Cess and other material statutory
dues in arrears, as at 31st March, 2012 for a period of more than six months from the date
they became payable.
(c) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty,
Excise Duty and Cess which have not been deposited as on 31st March, 2012 on account of
disputes are given below:
|Name of the statute
||Nature of the dues
||Amount in crore)
||Period to which the amount relates
||Forum where dispute is pending
||1993-94 to 1999-2000
||Appellate Authority -upto Commissioner level
|Central Excise Laws
||1992-93 to 1995-96
||Appellate Authority -upto Tribunal Level
|Income Tax Act, 1961
(x) The Company does not have accumulated losses as at 31st March, 2012 and has not
incurred cash losses during the financial year ended as on that date or in the immediately
preceding financial year.
(xi) In our opinion and according to the information and explanations given to us, the
Company has not defaulted in repayment of dues to banks, financial institutions and
(xii) According to the information and explanations given to us, the Company has not
granted any loans and advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The provisions of any special statute as specified under Clause (xiii) of the
Order are not applicable to the Company.
(xiv) In our opinion and according to the information and explanations given to us, the
Company is not a dealer or trader in securities.
(xv) In our opinion and according to the information and explanations given to us, the
terms and conditions of the guarantees given by the Company for loans taken by others from
banks and financial institutions are not prima facie prejudicial to the interests
of the Company.
(xvi) In our opinion and according to the information and explanations given to us, the
term loans have been applied for the purposes for which they were obtained, other than
temporary deployment of term loans of Rs. 870 crore pending application in short-term bank
(xvii) In our opinion and according to the information and explanations given to us and
on an overall examination of the Balance Sheet, we report that funds raised on short-term
basis have not been used during the year for long-term investment.
(xviii) According to information and explanations given to us, the Company has not made
any preferential allotment of shares to parties and 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 has created securities/charges in respect of the
(xx) The Company has not raised any money by public issue during the year.
(xxi) During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practices in India, and
according to the information and explanations given to us, we have neither come across any
instance of significant fraud on or by the Company,noticed or reported during the year nor
have we been informed of such case by the Management.
For DELOITTE HASKINS & SELLS
(Registration No. 117366W)
(Membership No. 71387)
Mumbai, 22nd May, 2012