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National Wind Power Corporation Ltd.

BSE: 531077 Sector: Infrastructure
NSE: NEPCPAPER ISIN Code: INE471B01013
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National Wind Power Corporation Ltd. (NEPCPAPER) - Auditors Report

Company auditors report

To

The Members

NATIONAL WIND POWER CORPORATION LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of NATIONAL WIND POWERCORPORATION LIMITED ("theCompany")which comprise the Balance Sheet as at March31 2016 the statement of Profit and Loss the Cash Flow Statement forthe year thenended and a summary of the significant accounting policies andother explanatoryinformation.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated inSection 134(5)of the

Companies Act2013 ("the Act"') with respect to thepreparation of thesefinancial statements that give a true and fairview of the financial position financialperformance and cash flows of thecompany in accordance with the accounting principlesgenerally accepted inlndia including the Accounting Standards specified under section 133of theAct read with Rule 7 of the Companies (Accounts) Rules 2014.Thisresponsibilityalso includes maintenance of adequate accounting records inaccordance with the provisionsof the Act for safeguarding the assets of theCompany and for preventing and detectingfrauds and other irregularities;making judgments and estimates that are reasonable andprudent; anddesign implementation and maintenance of adequate internal financialcontrolsthat were operating effectively for ensuring the accuracy andcompleteness of theaccounting records relevant to the preparation andpresentation of the financialstatements that give a true and fair view and are free from material misstatementswhether due to fraud or error.

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 specifiedunderSection 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 misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or errors. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company's preparation ofthe financial statements that give a true and fail-view in order to design auditprocedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.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 financial statements.

Opinion

In our opinion and to the best of our information and according to the Explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner 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 March31 2016 and its profit and its cash flows for the year ended on that date subject towhat is stated in point No. II (3) in Note 10 Significant

Accounting policies and Notes on accounts :

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("theOrder")Issued by the Central Government of India in terms of Section 143(11) of the Act we givein the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order tothe extent applicable.

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 bestof 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 thecompany so far as it appears from our examination of those books;

(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 ;

(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.

(e) On the basis of the written representations received from the directors as on March31

2016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164(2) of theAct.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in "Notes".

(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 does not have any pending litigations which would impact its financialposition.

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

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

For A. Nageswaran

Chartered Accountants

Proprietor

Membership No: 200/23911

Chennai.

29 July 2016

"Annexure B" to the Independent Auditor's Report of even date on theFinancial Statements of National Wind Power Corporation Limited

Referred to in paragraph 29f) 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. 2016.

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act2013("the Act")

WE have audited the internal financial controls over financial reporting of NWPCLimited ("the Company") as of March 31 2016 in conjunction with our audit ofthe 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 "theinternal control over financial reportingcriteria established by the company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by The Institute of Chartered

Accountants of India":. These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act.2103.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcaptrols 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 deemed tobe prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company arc being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany'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 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 March 31 2016 based on"the internal control over financial reporting criteria established by the companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by

The Institute of Chartered Accountants of India".

For A. Nageswaran

Chartered Accountants

Proprietor

Membership No: 200/23911

Chennai.

29 July 2016

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT-31 MARCH 2016

(Referred to in our report of even date)

(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets. b) The Company has a regularprogramme of physical verification of its fixed assets by which all fixed assets areverified in a phased manner over a period of three years. In our opinion this periodicityof physical verificationis reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed in respect of assets verifiedduring-the year.

(ii) nI respect of the inventories of the company

(a) As explained to us the inventories were physically verified during the year by themanagement at reasonable intervals.

(b) In our opinion and according to the information and explanation given to us theprocedures of physical verification of inventories followed bt the management werereasonable and adequate in relation to the size of the company and nature of its business.

(c) In our opinion and according to information and explanations given to us. thecompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.

(iii) The Company has not granted any loans secured or unsecured to Companies firmsor other parties covered in the register maintainedUnder section 189 of the Companies

Act2013 ("theAct").Accordinglyparagraphs 3(iii) (a) and (b) of the Orderare not applicable to the Company .

(iv) In our opinion and according to the information and explanations given to us thecompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia under the provisions of sections 73 to 76 or any other relevant provisions of the

Act and the rules framed there under. Accordingly paragraph 3(v) of the Order is notapplicable to the Company.

(v) The Central Government has not prescribed the maintenance of cost records undersection

148(1) of the Act for the activities carried out by the company. Accordingly paragraph

3(vi) of the Order is not applicable to the company.

(vi) Statutory Dues:

(a) Based on the records verified by us and as certified by the management the Companyhas been generally regular in depositing undisputed statutory dues arising to the Companyin respect of the Provident Fund Investor Education and Protection Fund Employees StateInsurance Sales Tax Wealth Tax Customs Duty Service Tax Cess and any other StatutoryDues during the period to the appropriate authorities. As at 31st March 2016 except whatis reported below there were no undisputed dues which were outstanding for a period ofmore than six months from the date they became payable:

(b) Following are the details of disputed statutory dues which have not been depositedon account of disputes as listed below:

Name of the Statute Amount (Rs. in Lakhs) Year to which demand relates Forum where dispute is pending
Income Tax Act 1961 54.05 1995-96 Income Tax appellateTribunal
Interest and penalty. 17.94 1997-98 Income Tax appellateTribunal
Wherever applicable 13.43 1998-99 Income Tax appellate Tribunal

(vii) The Company did not have any outstanding dues to any financial institutionbanksor debenture holders during the year.

(viii) According to the information and explanations given to us the Company has notgiven any guarantee for loans taken by others from banks or financial Institutions.

(xi) In our opinion and according to the information and explanations given to us the

Company has not paid / provided managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act 2013.

(x) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 order is not applicable.

(xi) In our opinion and according to the information and explanations given to us the

Company is in compliance with Section 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xii) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of Section 192 of theCompanies Act 2013 are not applicable.

(xiv) The Company is not required to be registered under section 45-1 of the ReserveBank of India Act 1934.

For A. Nageswaran

Chartered Accountants

Proprietor

Membership No: 200/2391

Chennai.

29 July 2016