You are here » Home » Companies » Company Overview » Indowind Energy Ltd

Indowind Energy Ltd.

BSE: 532894 Sector: Infrastructure
NSE: INDOWIND ISIN Code: INE227G01018
BSE LIVE 15:48 | 23 Nov 8.17 -0.42
(-4.89%)
OPEN

8.60

HIGH

8.60

LOW

8.17

NSE 15:12 | 23 Nov 8.20 -0.35
(-4.09%)
OPEN

8.15

HIGH

8.50

LOW

8.15

OPEN 8.60
PREVIOUS CLOSE 8.59
VOLUME 54940
52-Week high 11.25
52-Week low 3.97
P/E 40.85
Mkt Cap.(Rs cr) 73
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 8.60
CLOSE 8.59
VOLUME 54940
52-Week high 11.25
52-Week low 3.97
P/E 40.85
Mkt Cap.(Rs cr) 73
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Indowind Energy Ltd. (INDOWIND) - Auditors Report

Company auditors report

TO THE MEMBERS OF INDOWIND ENERGY LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of INDOWIND ENERGYLIMITED ("the Company") which comprise the Balance Sheet as at 31"March 2017 the Statement of Profit and Loss the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements.

The procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the financial statements that give a true andfair 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 andthe reasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Basis of Qualified Opinion

(i) There are amounts receivable from various parties amounting to Rs. 14.14 Croreswhich have been shown under the heads Current Asset - Inventory Long Term Trade AdvanceTrade Debtors and Other Non Currents Asset. There is an absence of regular repaymentsreconciliation and confirmation from the parties. In our opinion the management has torecognize a provision for adjusting the carrying amount of these assets.

Based on the above we are not in a position to ascertain and comment on the correctnessof the outstanding balances and resultant impact of the same on the financial statementsof the company.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the paragraphs"Basis of Qualified Opinion" and "Emphasis of Matter" theaforesaid standalone financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2017 and its profit and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

1. Note 5 of schedule to the financial statements. The company is the defendant in alegal case filed by the Foreign Currency Bond Holders for winding up. The entity has fileda counter action hearing and proceedings on both actions are in progress. The impact ofthe matter cannot be ascertained at this stage.

2. Note No. 9 of financial statements under fixed assets regarding capitalisation ofPlant & Machinery by way of addition amounting to Rs. 17.01 Crores.

The above Capitalisation includes additions to plant and Machinery of Rs. 11 Croreswhich was done by way of a Transfer agreement with suppliers towards settlement of projectadvances made in the past.

3. In accordance with Accounting Standard -11 (Standard on The Effects of Changes inForeign Exchange Rates) the Company is required to value its monetary assets andliabilities viz. Long Term Provisions at the foreign exchange rate prevailing on the dateof the balance sheet. The company has not re-instated the foreign currency term loandisclosed under Note No 4 & 7 amounting to Rs. 55.99 Crores representing a part of theloan amount taken from EXIM Bank at the year endforex rates. Had the same beenre-instated the liability to Exim Bank would be Rs 79.42 crores and the profit for thefinancial year ended 31 st March 2017 would have been increased by Rs. 1.83 Crores. Theentity has not re-instated the loan from the time of availment which would result indecrease in reserve and Surplus upto Previous Year by Rs. 24.99 Crore.

4. Note No. 17 in respect of Misc Expenditure shown under Other Current Assets of Rs.2.56 Crores (which also includes Rs. 30 Lakhs grouped under Cash & Cash Equivalentlast year for which we had expressed a qualified opinion). In our opinion Rs 2.56 Croresis to be written off during the year. If written off the Profit would have decreased by2.56 Crores.

Our opinion is not modified in respect of the matters mentioned above.

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 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraph 3 and 4 of the Order to the extent applicable

2. Further to the comments in the annexure as required by Section 143 (3) of the Actwe report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of ouraudit.

(b) In ouropinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and proper returnsadequate for the purposes of ouraudit have been received from the branches not visited byus.

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account and with the returnsreceived from the branches not visited by us.

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 except to the matters mentioned under our "basis of qualifiedopinion" and "emphasis of matters" and their effect on Profit & Loss ofthe company on account of non- compliance of Accounting Standards.

(e) On the basis of the written representations received from the directors as on 31 stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as onSI81 March 2017 from being appointed as a director in termsof Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls overfinancialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B";

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements - Refer Note 5 and 26 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For V. Ramaratnam & Co
Chartered Accountants
Firm Registration No.002956S
R. Sundar
Place: Chennai. Partner
Date: 23rd May 2017 Membership No.: 012339

"Annexure A" to the Independent Auditors' Report

Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirement' of our report of even date to the financial statements of the Company for theyear ended March 31 2017:

I) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the company except for seven cases of freehold land having aggregategross block of Rs. 18072120/-.

(ii) According to the information and explanation given to us the physicalverification of the inventory has been conducted at the reasonable intervals by themanagement and there has been no material discrepancies noticed during such verification.

(iii) The Company has granted loans both secured and unsecured to companies firmslimited liability partnerships and other parties covered in the register maintained underSection 189 of the Companies Act 2013.

(a) "In our opinion the terms and conditions of loans granted by the company tothe parties covered in the register maintained under section 189 of the Companies Act2013 are not prejudicial to the company's interest.

(b) According to the information and explanation given to us the schedule of repaymentof principal and payment of interest has been stipulated and the repayments are regular.

(c) According to the information and explanations given to us there are no over duesfor more than 90 days from the parties covered in the register maintained under section189 of the Companies Act 2013.

(iv) ln our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the companies Act 2013with respect to the loans and investments made.

(v) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.

(vi) According to information and explanations given to us the Central Government hasnot prescribed the maintenance of Cost Records under sub-section (1) of section 148 of theCompanies Act 2013 for the Company. Thus paragraph 3(vi) of the Order is not applicableto the Company.

(vii) (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the undisputed statutory dues includingProvident Fund Employees State Insurance Income-Tax Sales tax Service Tax Duty ofCustoms Duty of Excise Value added Tax Cess and any other statutory dues have generallybeen regularly deposited with the appropriate authorities though there has been a slightdelay in few cases which is not material. According to the information and explanationsgiven to us no undisputed amounts payable in respect of the above were in arrears as atMarch 31 2017 for a period of more than six months from the date on when they becomepayable.

(b) According to the information and explanations given to us there are no dues ofincome tax or sales tax or service tax or duty of customs or duty of excise or value addedtax which have not been deposited on account of any dispute except for the following:

S.No. Particulars Amount (Rs.) in lakhs Period to which the amount relates Forum where dispute is pending
1 Income Tax Act 27.00 AY 1998-1999 First appellate authority - Commissioner of Income tax appeals
2. Service Tax 218.00 FY 2005-2006 2006 - 2007 2007 - 2008 2008 - 2009 and 2009-2010 Central Excise and service tax appellate tribunal [CESTAT]
3. Value Added Tax 16.80 FY 2007-2008 High Court of madras
4. Value Added Tax 29.60 FY 2008-2009 High Court of madras

(viii) In our opinion and according to the information and explanations given to usthe Company has not issued any debentures and not defaulted in the repayment of dues tobanks and financial institution except the following:

Name of institution - Export-Import Bank of India (Exim) Amount of overdue as onbalance sheet date - Rs. 14316269/- (USD 22079855) Period of overdue - Quarter IV ofFY 2016-17 Exim bank had sanctioned a facility of USD 25 million and disbursed USD 12.70million only. Exim Bank is holding a Fixed deposit of Rs. 370 Lakhs which is due to thecompany as on the balance sheet date.

(ix) The company did not raise money by way of initial public offer or further publicoffer including debt instruments and term Loans. Thus paragraph 3(ix) of the Order is notapplicable to the Company.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of ouraudit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Thus paragraph 3(xii) of the Order is not applicable.

(xlil) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with section 177 and section 188 of Companies Act 2013 and the details havebeen disclosed in the Financial Statements as required by the applicable accountingstandards.

(xiv) According to the information and explanation given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Accordingly paragraph 3(xiv) of theOrder is not applicable.

(xv) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him

(xvi) According to the information and explanation given to us and in our opinion thecompany is not required to be registered under section 45 lAof the Reserve Bankof IndiaAct 1934.

For V. Ramaratnam & Co
Chartered Accountants
Firm Registration No.002956S
R. Sundar
Place: Chennai. Partner
Date: 23rd May 2017 Membership No.: 012339

"Annexure B" to the Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of IndowindEnergy Limited ("the Company") as of 31st March 2017 in conjunctionwith our audit of the 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles.

A company's internal financial control over financial reporting includes those policiesand procedures that

(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued byInstitute of Chartered Accountants of India.

Emphasis of Matter

We would draw attention to the matters disclosed in the paragraph 3(iii) of the'Annexure A' referred in paragraph 1 under the heading "Basis of QualifiedOpinion" and "Emphasis of Matters" which could indicate possiblelapses in internal financial control system at various points in time.

Ouropinion under clause (i) of sub-section 3 of the section 143 of the Act is notqualified in respect of this matter.

For V. Ramaratnam & Co
Chartered Accountants
Firm Registration No.002956S
R. Sundar
Place: Chennai. Partner
Date: 23rd May 2017 Membership No.: 012339