NEPC INDIA LIMITED
ANNUAL REPORT 2011-2012
NEPC India Limited.,
We have audited the attached Balance sheet of NEPC India Limited as on 31st
March, 2012 and the Profit and Loss Account and the Cash Flow Statement of
the Company for the year ended on that date annexed thereto, which we have
signed under reference tb this report. 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 audit.
1. We conducted our audit in accordance with 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 misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
2. As required by the Companies (Auditors Report) Order, 2003 as amended by
Companies (Auditor's Report) (Amendment) Order, 2004 (together 'the Order')
issued by the Central Government of India in terms of sub section 4A of
section 227 of 'the Companies Act, 1956' of India (the Act), and on the
basis of such checks of the books and records of the Company as we consider
appropriate and according to the information and explanations given to us,
we give in the Annexure hereto a statement on the matters specified in Para
4 & 5 of the said Order to the extent applicable to the Company during the
3. Further to our comments in the Annexure referred to in Para 2 above, we
i) We have obtained all the information and explanations, which to the best
of our knowledge and belief were necessary for the purpose of our audit;
ii) In our opinion, proper books of account as required by law have been
maintained by the Company in respect of all material transactions so far as
appears from our examination of those books.
iii) The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv) In our opinion, the balance sheet, profit and loss account and the cash
flow statement comply with the Accounting Standards referred to in sub-
section (3C) of section 211 of the Companies Act, 1956 to the extent made
mandatory, subject to what is stated in point No. II(3), II(08), II(10),
II(12) in Note-19 Significant Accounting Policies and Notes Accounts;
v) On the basis of written representations received from the directors and
taken on record by the Board of Directors, we report that none of the
director is disqualified as on 31st March, 2011 from being appointed as
director in terms of clause (g) of sub section (1) of section 274 of the
vi) Attention of the members is invited to the following point which have
been explained in Note-19, Significant Accounting Policies and Notes on
a) Note II.3: regarding pending confirmation and reconciliations, if any,
in respect of certain debtors, loans and advances, bank balance, deposits
and current liabilities;
b) Note 11.08: regarding non-recognition of Impairment of Assets pertaining
to the Airline Division even though the conditions for the same exists
which is in contravention with the provisions stipulated in Account
Standard 28 - Impairment of Assets issued by the Institute of Chartered
Accountants of India resulting in over statement of Fixed Assets and under
statement of Losses for the year - Amount unascertainable (previous year
c) Note 11.10: regarding non-provision of retirement benefits in the
financial statements on accrual basis which is in contravention with the
provisions stipulated in Accounting Standard 15 Accounting for Retirements
Benefits - Amount unascertainable (previous year Amount unascertainable).
d) Note II.10.: regarding non-provision of Deferred Taxes on the timing
differences that may arise due to disallowance of certain expenses is in
contravention with the provisions stipulated in Accounting Standard 22 -
Taxes on Income - Amount unascertainable (previous year Amount
vii) In our opinion and to the best of our information and according to the
explanations given t o us, the said accounts subject to what is stated in
paragraph 3(vi) above having consequential impact (presently un-
ascertainable) on the profit for the Company and read together with other
Significant Accounting Policies and other Notes thereon given in Note 19,
give the information as 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;
a) In case of the Balance Sheet, of the State of Affairs of the Company as
at 31st March, 2012.
b) In case of the Profit and Loss Account, of the Loss of the Company for
the year ended on that date; and
c) In the case of Cash Flow Statement, of the cash flow for the year ended
on that date.
For A. Nageswaran
Membership No. 200/23911
Annexure to the Auditors' Report:
(Referred to in paragraph 2 of our report of even date)
In terms of the information and explanation given to us and the books and
records examined by us and on the basis of such checks as we considered
appropriate, we further report as under:
(i) Fixed Assets:
a) The Company is in the process of updating its records showing full
particulars including quantitative details and situation of fixed assets on
the basis of available information.
b) During the year, the fixed assets have been physically verified by the
management, during the course of updation of records, in accordance with
the phased programme of verification adopted by the management.
Discrepancies, if any,will be adjusted on updation of the said records.
c) During the year, the Company has not disposed off substantial part of
the fixed assets and the going concern status of the Company has not been
a) During the year the management has conducted physical verification of
inventories at regular intervals.
b) The procedures of physical verification of Inventories followed by the
management, in our opinion, are reasonable and adequate in relation to the
size of the Company and nature of its business.
c) The Company is maintaining proper records of inventory and no material
discrepancies were noticed on its physical verification.
(iii) Loans & Advances either granted or taken:
a) (i) As per the records verified by us, the Company has not taken
interest-free loans Secured or Unsecured from the parties covered in the
register maintained under section 301 of the Companies Act, 1956.
(ii) The Company has granted interest-free advances to one of related
parties covered in the register maintained under Section 301 of the
Companies Act 1956, with maximum balance during the year of
Rs.31,19,89,895/- and closing balance of Rs. 31,19,89,895.
b) In our opinion, the other terms and conditions of the above advances are
not prima facie prejudicial to the Company's interests.
c) The above advances are being repaid as per the stipulations wherever
made or as rescheduled.
d) Based on the representations received from the management, we are of the
opinion that the Company has taken reasonable steps for the recovery of the
(iv) Internal Controls:
Based on the information and explanations given to us, we are of the
opinion that the internal control procedures prevailing in the Company need
to be strengthened further to make them commensurate with its size and the
nature of its business.
During the course of our audit, we have not observed any continuing failure
to correct major weaknesses in internal controls.
(v) Transaction s covered by Section 301:
a) During the year the transactions that need to be entered into a register
in pursuance of section 301 of the Act have been so entered by the Company;
b) Based on information and explanations given to us, we are of the opinion
that, each of these transactions have been made at prices which are
reasonable having regard to the prevailing market prices at the relevant
(vi) Public Deposits:
In our opinion and according to the information and explanations given to
us, the company has not accepted any deposits from the public to which the
provisions of section 58A and 58AA or any other relevant provisions of the
Act and the Companies Acceptance of Deposits Rules, 1975 apply.
(vii) Internal Audit:
There is no formal internal audit system prevailing in the Company during
the year under review.
(viii) Cost Records:
The Central Government has not prescribed for maintenance of cost records
under section 209(1)(d) of the Companies Act, 1956.
(ix) Statutory Dues:
(a) Based on the records verified by us and as certified by the management,
the Company has been generally regular in depositing undisputed statutory
dues arising to the Company in respect of the Provident Fund, Investor
Education and Protection Fund, Employees State Insurance, Sales Tax, Wealth
Tax, Customs Duty, Service Tax, Cess and any other Statutory Dues during
the period to the appropriate authorities. As at 31st March, 2012 except
what is reported below, there were no undisputed dues which were
outstanding for a period of more than six months from the date they became
Sl. Name of Nature of the Amount Period to Due date
No. the statute dues Rs. which the
1. Income Tax Tax Deducted 3,26,727 Various 7th of the
Act, 1961 at Source periods month
(b) Following are the details of disputed statutory dues which have not
been deposited on account of disputes as listed below:
Sr. Nature of dues & Period to which Amount Name of the Forum
No. Assessment Year amount relates (Rs.) under which dispute
1. Sales Tax F.Y. 2000-01 80,385 Sales Tax Appellate
penalty Wherever F.Y. 2001-02 82,344 Sales Tax Appellate
2. Income Tax A.Y. 1992-93 12,774 Commissioner of
(Including Income Tax
interest & Appellate Tribunal
wherever A.Y. 1993-94 1,33,39,000 Income Tax
A.Y. 1994-95 4,52,69,296 Income Tax
A.Y. 2004-05 30,000 Income Tax
A.Y. 2005-06 30,000 Commissioner of
(x) Accumulate d Losses:
The Company's accumulated losses as at the close of the current year is
more than fifty percent of its Net worth as on the said date.
(xi) Loans against pledge of Securities:
During the year under review, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares, debentures
and other securities to any party.
(xii) Applicability of special statute:
The provisions of any special statute applicable to Chit Fund, Nidhi and
Mutual Benefit Society are not applicable to the Company during the year
(xiii) Dealing/trading in shares or Security:
As per the records made available to us and verified by us, the Company has
not dealt with or traded in shares, securities, etc., during the year under
(xiv) Guarantees given:
In our opinion, the terms and conditions of the guarantees given by the
Company in respect of the loans taken by related parties from banks were
not prejudicial to the interests of the Company.
(xv) Application of Funds raised:
a) During the year, the Company has not raised any new Term Loans.
b) Based on our verification of the books of accounts, the information and
explanations given o t us, in this regard and on the overall examination of
the balance sheet of the Company we are of the view that the funds raised
on short-term basis by the Company have not been utilized for long term
purposes and vice versa.
(xvi) Preferential allotment:
During the year under review, the Company has not made any preferential
allotment of equity shares to any party/concern listed in the Register
maintained under Section 301 of the Companies Act, 1956.
(xvii) Security against Debentures:
The Company has not issued any debentures during the year under review.
(xviii) End use of Public Issue Money:
During the year, the Company has not raised any money by Public Issue.
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 material fraud on or by
the Company, noticed or reported during the year nor have been informed of
such case by the management.
For A. Nageswaran
Membership No. 200/23911