RPower posts March quarter loss after delay, RInfra defers result yet again

A combination of impairment, higher finance costs and lower income led to a loss in the March quarter for the power company
The Anil Ambani group, which is under financial stress and has delayed debt repayment, is also not keeping its dates of announcing the March 2019 quarter financial results for Reliance Infrastructure (RInfra) and Reliance Power (RPower). 

Both companies were to declare their results on June 7 but did not. RPower announced its March results the next day and said, “The meeting of the audit committee commenced on June 7 and got adjourned to June 8, 2019. Consequently, the board meeting of the company also stood adjourned to June 8.”

RPower reported a loss of Rs 3,558.51 crore for the March 2019 quarter against a net profit of Rs 189.21 crore, and the auditors have raised qualifications on the accounts. 

RInfra too had adjourned its board meeting to June 8 as RPower, an associate company, postponed its board meeting. Late on June 8, RInfra its audit committee sought time to review and incorporate RPower’s in its consolidated statements and would now declare results on June 14. 

Earlier, RPower and Rinfra had said they would declare their results on May 29 and May 30, respectively. On May 29, RPower informed stock exchanges that it had postponed its board meeting to consider accounts due to unavailability of some directors. RInfra had postponed its board meeting too to June 7 due to delay in RPower results. 

Meanwhile, a combination of impairment, higher finance costs and lower income led to a loss in the March quarter for RPower. The impairment also included a revised view on its solar and gas-based power assets.

For the March quarter, the company took an impairment of Rs 4,170 crore, of which Rs 1,017 crore was reduced through withdrawal from its general reserves. Auditors in their report stated annual losses could have been higher had the company not withdrawn proceeds from its general reserves.  

The auditors also noted had such withdrawal not been made, loss before tax for the year ended March 2019 would have been higher by the same amount. For the full year, the company reported a loss of Rs 2,956 crore.

The company's results note added that it is permitted to offset any expense or loss which, in the opinion of the board, is beyond its control.

RPower in its result notes also added, “The figures for the quarter ended March 31, 2019 and March 31, 2018 are the balancing figures between the audited figures in respect of full financial year and the restated year to date figures up to the third quarter of the respective financial year.”

In their report, auditors also made a reference to the method of depreciation adopted. “The method of depreciation adopted by the parent company, which is different from the method adopted by its subsidiaries, is a departure from the requirements of IndAS,” they said. The report added, had the same method been followed annual consolidated loss would be higher by Rs 502 crore.

Certain related party loans have also been flagged off in the auditor’s report. “The parent company has taken intercorporate deposits from certain companies aggregating to Rs 403.41 crore during the year ended March 31, 2019,” auditors noted. They added: “The related party relationships of such companies with the parent company have not been considered. Had they been considered, the parent company would require prior approvals of the audit committee for these transactions.” However, the company said, “Even though management feels they are not the related parties, audit committee's approval has since been received.” 



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