India Power’s Q1 accounts draw adverse auditor conclusion

India Power Corporation Limited received an adverse conclusion on consolidated results for the quarter ended June 30, 2026. The reviewer said Rs 8,720.4962 crore of claims admitted in the Corporate Insolvency Resolution Process remained unrecognised as liabilities, overstating profit before tax and understating liabilities by that amount.

Why did India Power receive an adverse conclusion on Q1 accounts?

India Power received the adverse conclusion because its consolidated statement did not recognise Rs 8,720.4962 crore of claims admitted by the Interim Resolution Professional or Resolution Professional as at June 30, 2026. S S Kothari Mehta & Co. LLP said this treatment overstated profit before tax and understated liabilities by the same amount.

The reviewer concluded that the consolidated statement had not been prepared in accordance with Indian Accounting Standards, or Ind AS, and had not made disclosures required under the Securities and Exchange Board of India listing regulations. The conclusion was issued on October 29, 2026 after a review under Standard on Review Engagements 2410, which provides less assurance than an audit and does not result in an audit opinion.

Creditors, including financial creditors, had submitted claims of Rs 9,356.1828 crore to India Power’s insolvency professional by June 30, 2026. Of those claims, Rs 8,720.4962 crore had been admitted, while India Power said the required provisions or adjustments would be made after the final outcome of the Corporate Insolvency Resolution Process, or CIRP.

The National Company Law Tribunal, Hyderabad Bench, admitted India Power into CIRP on May 15, 2026 following an application tied to a corporate guarantee provided to Meenakshi Energy Limited. The company said it has appealed that order before the National Company Law Appellate Tribunal, where the matter remained pending as of the October 29 results announcement.

Which India Power receivables did the reviewer consider unrecoverable?

The reviewer said two India Power balances totalling Rs 235.1114 crore required provisions because they were unrecoverable. They comprise a Rs 199.70 crore receivable from Power Trust and a Rs 35.4114 crore loan to a body corporate that is the subject of arbitration proceedings.

The Power Trust balance arose from India Power’s sale in earlier years of compulsorily convertible preference shares and fully and compulsorily convertible debentures in Hiranmayee Energy Limited. The reviewer described the Rs 199.70 crore receivable as overdue, unsecured and subject to balance confirmation, adding that Power Trust’s major underlying asset was subject to a proceeding under the Insolvency and Bankruptcy Code, 2016.

According to the reviewer, the Power Trust balance overstated profit before tax and other current financial assets at March 31, 2026 by Rs 199.70 crore. It also said retained earnings and other current financial assets were overstated by Rs 199.70 crore at June 30, 2026. India Power said fair valuation of its beneficial interest in Power Trust would be carried out at the year end because interim financial statements for unlisted entities were unavailable.

On the Rs 35.4114 crore loan, India Power said arbitration had been initiated and management considered the amount good pending the outcome. The reviewer said the overdue, unsecured balance was subject to confirmation and was not recoverable, stating that it overstated March 31, 2026 profit before tax and loans, as well as June 30, 2026 retained earnings and loans, by Rs 35.4114 crore.

What did India Power report for the June 2026 quarter?

India Power reported consolidated profit after tax of Rs 4.2155 crore for the quarter ended June 30, 2026, compared with Rs 4.1351 crore in the quarter ended March 31, 2026 and Rs 3.0488 crore a year earlier. These are reported figures in a statement that received an adverse review conclusion over unrecognised claims and receivable provisions.

Revenue from operations increased by Rs 20.8502 crore from the March 2026 quarter and by Rs 23.2555 crore from the June 2025 quarter. Total expenses rose by Rs 4.2412 crore sequentially, while net regulatory income declined by Rs 10.4543 crore from the March quarter to Rs 6.5810 crore.

India Power said net sales were determined using relevant orders of the West Bengal Electricity Regulatory Commission, its understanding of the applicable regulatory framework and available orders of competent authorities. It classifies unbilled costs or obligations expected to be recovered or refunded through future tariff adjustments as regulatory income or expense.

The June-quarter statement includes a Rs 0.0028 crore share of profit after tax from one joint venture. India Power identified generation and distribution of power as its single business segment, meaning it did not present separate segment results for the quarter ended June 30, 2026.

Can India Power continue as a going concern during CIRP?

India Power’s ability to continue as a going concern is subject to material uncertainty, according to the reviewer. The reviewer said continuation depends on a viable resolution plan from a prospective investor and continued support from financial creditors, operational creditors and customers.

India Power nevertheless prepared the June 30, 2026 consolidated financial statements on a going-concern basis. Management’s assessment was that the Resolution Professional would seek to preserve the group’s property and manage operations as a going concern, but the reviewer said the identified conditions may cast significant doubt on that ability.

The adverse conclusion was not modified specifically for the going-concern matter. The reviewer also included an emphasis of matter on the May 15, 2026 CIRP admission, under which the powers of India Power’s board were suspended and became exercisable by the Resolution Professional.

India Power is under a moratorium under section 14 of the Insolvency and Bankruptcy Code until CIRP is completed, a resolution plan is approved, or a liquidation order is passed. The Resolution Professional signed the results approved by the management committee on October 29, 2026 and said she had not independently analysed information relating to the period before CIRP began.

Conclusion

India Power’s reported Rs 4.2155 crore June-quarter profit is accompanied by an adverse review conclusion focused principally on Rs 8,720.4962 crore of admitted CIRP claims that were not recorded as liabilities. The reviewer also found that Rs 235.1114 crore of Power Trust and body-corporate receivables required provisions, affecting stated profit, retained earnings, financial assets and loans in the identified periods.

The next disclosures to watch are the outcome of India Power’s CIRP, the pending appeal against the May 15, 2026 National Company Law Tribunal order and whether a viable resolution plan is submitted with creditor and customer support. India Power also said its Resolution Professional is reviewing the June 2, 2025 business transfer agreement involving the non-regulated business, including wind energy, transferred to IPCL Power Limited.