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NTPC

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« Mar 14
Auditor's Report (NTPC) Year End : Mar '15
We have audited the accompanying standalone financial statements of
 NTPC Limited (the Company), which comprise the Balance Sheet as at
 31st March 2015, the Statement of Profit and Loss, the Cash Flow
 Statement for the year then ended, and a summary of the significant
 accounting policies and other explanatory information.
 
 Management''s responsibility for the standalone financial statements
 
 The Company''s Board of Directors is responsible for the matters stated
 in Section 134 (5) of the Companies Act, 2013 (the Act) with respect
 to the preparation of these standalone financial statements that give a
 true and fair view of the financial position, financial performance and
 cash flows of the Company in accordance with the accounting principles
 generally accepted in India, including the Accounting Standards
 specified under Section 133 of the Act, read with Rule 7 of the
 Companies (Accounts) Rules, 2014. This responsibility also includes
 maintenance of adequate accounting records in accordance with the
 provisions of the Act for safeguarding the assets of the Company and
 for preventing and detecting frauds and other irregularities; selection
 and application of appropriate accounting policies; making judgments
 and estimates that are reasonable and prudent; and design,
 implementation and maintenance of adequate internal financial controls,
 that were operating effectively for ensuring the accuracy and
 completeness of the accounting records, relevant to the preparation and
 presentation of the financial statements that give a true and fair view
 and are free from material misstatement, whether due to fraud or error.
 
 Auditors'' responsibility
 
 Our responsibility is to express an opinion on these standalone
 financial statements based on our audit.
 
 We have taken into account the provisions of the Act, the accounting
 and auditing standards and matters which are required to be included in
 the audit report under the provisions of the Act and the Rules made
 there under.
 
 We conducted our audit in accordance with the Standards on Auditing
 specified under Section 143 (10) of the Act. Those Standards require
 that we comply with ethical requirements and plan and perform the audit
 to obtain reasonable assurance about whether the financial statements
 are free from material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and the disclosures in the financial statements.
 
 The procedures selected depend on the auditor''s judgment, including the
 assessment of the risks of material misstatement of the financial
 statements, whether due to fraud or error. In making those risk
 assessments, the auditor considers internal financial control relevant
 to the Company''s preparation of the financial statements that give a
 true and fair view in order to design audit procedures that are
 appropriate in the circumstances, but not for the purpose of expressing
 an opinion on whether the Company has in place an adequate internal
 financial controls system over financial reporting and the operating
 effectiveness of such controls. An audit also includes evaluating the
 appropriateness of the accounting policies used and the reasonableness
 of the accounting estimates made by the Company''s Directors, as well as
 evaluating the overall presentation of the financial statements.
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion on the standalone
 financial statements.
 
 Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the aforesaid standalone financial statements
 give the information required by the Act in the manner so required and
 give a true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 (a) In the case of Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2015;
 
 (b) In the case of Statement of Profit and Loss, of the profit for the
 year ended on that date; and
 
 (c) In the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 Emphasis of Matter
 
 We draw attention to the following matters in the Notes to the
 financial statements:
 
 (a) Note no. 22 (b) in respect of accounting of sales on provisional
 basis;
 
 (b) Note no. 34 in respect of a project where the matter is pending
 before the Hon''ble Supreme Court of India.  Our opinion is not modified
 in respect of these matters.
 
 Report on Other Legal and Regulatory Requirements
 
 1.  As required by the Companies (Auditor''s Report) Order, 2015 (the
 Order) issued by the Government of India in terms of sub-section (11)
 of section 143 of the Act, and on the basis of such checks of the books
 and records of the Company as we considered appropriate and according
 to the information and explanations given to us, we give in the
 Annexure 1 a statement on the matters specified in the paragraphs 3 and
 4 of the said Order.
 
 2.  We are enclosing our report in terms of Section 143 (5) of the Act,
 on the basis of such checks of the books and records of the Company as
 we considered appropriate and according to the information and
 explanations given to us, in the Annexure 2 on the directions and
 sub-directions issued by Comptroller and Auditor General of India.
 
 3. 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 best of 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 the Company 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 Statement dealt with by this Report are in agreement with the
 books of account.
 
 (d) In our opinion, the aforesaid standalone financial statements
 comply with the Accounting Standards specified under Section 133 of the
 Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
 
 (e) On the basis of written representations received from the directors
 as at 31st March 2015 and taken on record by the Board of Directors,
 none of the directors is disqualified from being appointed as a
 director in terms of Section 164(2) of the Act as on 31st March 2015.
 
 (f) With respect to the other matters to be included in the Auditor''s
 Report in accordance with Rule 11 of the Companies (Audit and Auditors)
 Rules, 2014, in our opinion and 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
 financial position in its financial statements. Refer Note 34, 35 & 52
 to the financial statements;
 
 ii.  The Company has made provision, as required under the applicable
 law or accounting standards, for material foreseeable losses on
 long-term contracts including derivative contracts.
 
 iii.  There has been no delay in transferring the amount to Investor
 Education and Protection Fund in accordance with the relevant
 provisions of the Companies Act, 1956 (1 of 1956) and Rules made there
 under by the Company.
 
 ANNEXURE 1 TO THE AUDITORS'' REPORT
 
 Annexure referred to in our report of even date to the members of NTPC
 LIMITED on the accounts for the year ended 31st March 2015
 
 (i) (a) The Company has generally maintained proper records showing
 full particulars including quantitative details and situation of fixed
 assets.
 
 (b) There is a regular programme of physical verification of all fixed
 assets over a period of two years which, in our opinion, is reasonable
 having regard to the size of the Company and the nature of its assets.
 No material discrepancies were noticed on such verification.
 
 (ii) (a) The inventory has been physically verified by the management
 at reasonable intervals.
 
 (b) The procedures of physical verification of inventory followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory. No material
 discrepancies were noticed on physical verification
 
 (iii) The Company has not granted any loans, secured or unsecured to
 any companies, firms or other parties covered in register maintained
 under Section 189 of the Companies Act, 2013.
 
 In view of the above, the clauses 3 (iii)(a) and 3 (iii)(b) of the
 Order are not applicable.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is adequate internal control system commensurate
 with the size of the Company and the nature of its business for
 purchase of inventory & fixed assets and for sale of electricity, goods
 and services. During the course of our audit, we have not observed any
 continuing failure to correct major weaknesses in internal control
 systems.
 
 (v) In our opinion and according to the information and explanations
 given to us, the Company has complied with the directives issued by the
 Reserve Bank of India, the provisions of Sections 73 to 76 or any other
 relevant provisions of the Companies Act, 2013 and the rules framed
 thereunder with regard to the deposits accepted from the public except
 deposits obtained by the Company from the dependants of employees who
 die or suffer permanent total disability for which the Company has
 applied Ministry of Corporate Affairs, Government of India for
 continuation of the exemption earlier obtained in respect of
 applicability of Section 58 A of the Companies Act, 1956, which is
 still awaited (refer Note 10 d). No order has been passed with respect
 to Section 73 to 76, by the Company Law Board or National Company Law
 Tribunal or Reserve Bank of India or any Court or any other tribunal.
 
 (vi) We have broadly reviewed the accounts and records maintained by
 the Company pursuant to the Rules made by the Central Government for
 the maintenance of cost records under sub-section (1) of Section 148 of
 the Companies Act, 2013 read with Companies (Cost Records & Audit)
 Rules, 2014 and we are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained. We have not,
 however, made detailed examination of the records with a view to
 determine whether they are accurate and complete.
 
 (vii) (a) Undisputed statutory dues including provident fund, income
 tax, sales-tax, wealth tax, service tax, custom duty, excise duty,
 value added tax, cess and other statutory dues have generally been
 regularly deposited with the appropriate authorities and there are no
 undisputed dues outstanding as on 31st March 2015 for a period of more
 than six months from the date they became payable.  We have been
 informed that employees'' state insurance is not applicable to the
 Company.
 
 (b) The disputed statutory dues aggregating toRs. 288.77 crore that
 have not been deposited on account of matters pending before
 appropriate authorities are detailed below:
 
 Sl.
 No   Name of Statute        Nature of dues    Forum where the 
                                               dispute is 
                                               pending             Rs. 
                                                                   crore
 
 1    Central Sales Tax 
      and Sales Tax/VAT      Sales Tax / VAT   Additional
                                               Commissioner of 
                                               Sales Taxes          6.69
      Acts of various 
      states
 
                                               Commissioner of 
                                               Sales Tax           14.12
 
                                               High Court         231.40
 
                                               Sales/Trade Tax
                                               Tribunal            20.74
 
                                               Joint 
                                               Commissioner
                                              (Appeal) Trade tax    1.16
 
                                               Appellate Tribunal   0.13
 
 2.   Central Excise 
      Act, 1944              Central Excise    CESTAT & Appellate 
                                               Tribunal of CEST     2.49
                             Duty/Service tax
 
 3.   Income Tax Act, 1961   Income Tax        Income Tax 
                                               Appellate Tribunal  11.61
 
                                               Income Tax Officer   0.43
 
      Total                                                       288.77
 
 (c) According to the information and explanations given to us, the
 Company has transferred the amount required to be transferred to the
 Investor Education and Protection Fund in accordance with the relevant
 provisions of the Companies Act, 1956 (1 of 1956) and Rules made there
 under.
 
 (viii) The Company has no accumulated losses and has not incurred cash
 losses during the financial year covered by our audit and in the
 immediately preceding financial year.
 
 (ix) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to
 financial institutions, banks or debenture holders.
 
 (x) According to the information and explanations given to us, the
 Company has not given any guarantees for loans taken by others from
 banks or financial institutions.
 
 (xi) According to the information and explanations given to us, the
 term loans have been applied for the purpose for which they were
 obtained.
 
 (xii) According to the information and explanations given to us and as
 represented by the Management and based on our examination of the books
 and records of the Company and in accordance with generally accepted
 auditing practices in India, we have been informed that no case of
 frauds has been committed on or by the Company during the year.
 
 ANNEXURE 2 TO THE AUDITORS'' REPORT
 
 Annexure referred to in our report of even date to the members of NTPC
 LIMITED on the accounts for the year ended 31st March 2015
 
 Sl. 
 No.  Directions / 
      Sub-Directions                Action Taken              Impact on
                                                              financial 
                                                              statement
 
 A. Directions
 
 1    If the Company has been 
      selected for disinvestment,a  The Company has
                                    not been selected for     Not
                                                              applicable
      complete status report in 
      terms of valuation of Assets  disinvestment during the  
                                    financial year 2014-15.
     (including intangible assets 
      and land) and Liabilities
     (including Committed and
      General Reserves) may be 
      examined including the mode 
      and present stage of
      disinvestment process.
 
 2    Please report whether there 
      are any cases of waiver/      According to information 
                                    and explanations given    Nil 
      write off of debts/loans/
      interest etc., if yes, the    to us, there are no 
                                    cases of waiver/write 
                                    off of
      reasons therefor and the 
      amount involved.              debts/loans/interest 
                                    etc.
 
 3    Whether proper records are 
      maintained for                Proper records are
                                    maintained for
                                    inventories               Nil 
      inventories lying with 
      third parties & assets
      received                      lying with third 
                                    parties and also for 
                                    assets received
      as gift from Govt. or 
      other authorities?.           as gift from Government 
                                    or other authorities.
 
 4    A report on age-wise 
      analysis of pending legal/    The Company has 4,126 
                                    pending legal/arbitration Nil 
      arbitration cases including 
      the reasons of pendency       cases. The age-wise 
                                    classification obtained 
                                    from
      and existence/effectiveness
      of a monitoring               the management is as 
                                    under:
      mechanism for expenditure
      on all legal cases (foreign   More than 
                                    3 years        2,803
      and local) may be given.      Two to three 
                                    years            561
 
                                    One to two
                                    years            378
 
                                    Less than one
                                    year             384
 
                                    These cases are pending
                                    for hearing /disposal
                                    at the respective forums.
                                    The Company has a system
                                    for monitoring expenditure
                                    on legal cases (foreign 
                                    and local) which in our 
                                    view is effective
 
 B. Sub - Directions
 
 1    Whether proper accounting 
     / disclosure of the            In accordance with the
                                    principles approved       Nil
      disputed amount with Coal 
      India Limited (CIL) and its   by the Board of 
                                    Directors of the 
                                    Company, the
      Subsidiaries related to 
      quality of coal has been made dispute with Coal India
                                    Limited (CIL) and its
      in the books of Accounts of
      NTPC Limited?                 Subsidiaries on account 
                                    of Gross Calorific
                                    Value (GCV) has been 
                                    settled as detailed in 
                                    Note 32.
 
 2    Whether NTPC has billed /
      recovered the amount paid     The Company has billed 
                                    the amount paid to CIL    Nil 
      to CIL and its subsidiaries 
      on settlement of disputes     and its subsidiaries on 
                                    settlement of disputes
      relating to quality of coal 
      from the beneficiaries and    relating to quality of 
                                    coal and the amount
                                    billed 
      whether any beneficiary
      disputed such a claim?        have been realized or 
                                    in the process of
                                    realization. None of the
                                    beneficiaries have 
                                    disputed the amount 
                                    billed by the Company 
                                    on this account.
 
 
 For O. P. Bagla & Co.   For PSD & Associates    For PKF Sridhar & 
                                                 Santhanam LLP
 
 Chartered Accountants   Chartered Accountants   Chartered Accountants
 
 Firm Reg. No. 000018N   Firm Reg. No. 004501C   Firm Reg. No. 003990S/
                                                 S200018
 
 (Rakesh Kumar)         (Prakash Sharma)        (S. Narasimhan)
 
 Partner                 Partner                 Partner
 
 M No.087537             M No.072332             M No.206047
 
 For V. Sankar Aiyar 
 & Co.                   For Ramesh C. Agrawal 
                         & Co.                   For A.R. & Co.
 
 Chartered Accountants   Chartered Accountants   Chartered Accountants
 
 Firm Reg. No. 109208W   Firm Reg. No. 001770C   Firm Reg. No. 002744C
 
 (Ajay Gupta)           (R.C. Agrawal)          (Pawan K Goel)
 
 Partner                 Partner                 Partner
 
 M No. 090104            M No.070229             M.No.072209
 
 Place : New Delhi 
 
 Dated : 29th May 2015
Source : Dion Global Solutions Limited
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