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Coromandel International Ltd.

BSE: 506395 Sector: Agri and agri inputs
NSE: COROMANDEL ISIN Code: INE169A01031
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OPEN 971.90
CLOSE 966.45
VOLUME 34514
52-Week high 1094.40
52-Week low 709.55
P/E 15.73
Mkt Cap.(Rs cr) 28,264
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Coromandel International Ltd. (COROMANDEL) - Auditors Report

Company auditors report

21. Standalone Financial Statements

INDEPENDENT AUDITOR'S REPORT

TO

THE MEMBERS OF

COROMANDEL INTERNATIONAL LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements ofCoromandel International Limited ("the Company") which comprise the Balancesheet as at March 31 2022 the Statement of Profit and Loss including the statement ofOther Comprehensive Income the Cash Flow Statement and the Statement of Changes in Equityfor the year then ended and notes to the standalone financial statements including asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 as amended ("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 March31 2022 its profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the 'Auditor'sResponsibilities for the Audit of the Standalone Financial Statements' section of ourreport. We are independent of the Company in accordance with the 'Code of Ethics' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements for thefinancial year ended March 31 2022. These matters were addressed in the context of ouraudit of the standalone financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters. For each matter belowour description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the standalone financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone financial statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanying standalone financial statements.

 

Key audit matters How our audit addressed the key audit matter
Recognition and measurement of revenues
Refer to note 2.3 ‘Revenue recognition' note 2.27.1 ‘Key sources of estimation uncertainty' and note 24 ‘Revenue from operations' to the standalone financial statements. Our audit procedures amongst others included the following:
Revenue from sale of goods is recognised when the control of goods is transferred to the customers. In accordance with the accounting policy control is transferred either when the product is delivered to the customer's site or when the product is shipped depending on the applicable terms. • We understood the revenue recognition process evaluated the design and implementation of internal controls relating to revenue recognised.
Revenue recognition involves significant management judgements and estimates and has accordingly been identified as a key audit matter. • We selected samples and tested the operating effectiveness of internal controls relating to transfer of control. We carried out a combination of procedures involving enquiry observation and inspection of evidence in respect of operation of these controls.
• We tested the relevant information technology general controls automated controls and the related information used in recording and disclosing revenue.
• In respect of the selected sample of transactions:
• We obtained the customer contracts and understood the terms and conditions including delivery and shipping terms.
• We tested whether the revenue is recognised upon transfer of control to customer.
• We tested the location stock reports from Company warehouses where applicable forconfirmation on sales quantity made during the year.
• We tested on a sample basis (including for sales near to the period end) the acknowledgments of customers. In respect of sales of fertiliser products we have also agreed the quantities sold as per the Company books with the customer acknowledgements as per the iFMS portal of the Department of Fertilisers.
• We tested the data used by the Company in assessing the provision for rebates for completeness and evaluated the rebates accrued on a sample basis by agreeing amounts recognised to the terms of agreements and marketing circulars for rebate schemes announced by the Company.
• We assessed relevant disclosures in the standalone financial statements of the Company.
Recognition measurement valuation of Subsidy income/ Government subsidies and related receivables
Refer to note 2.3 ‘Revenue recognition' note 2.27.1 ‘Key sources of estimation uncertainty' and note 24 ‘Revenue from operations' to the standalone financial statements. Our audit procedures amongst others included the following:
The Company has recognised subsidy income of Rs. 677528 lakhs for the year ended March 31 2022. • We understood the subsidy income recognition process evaluated the design and implementation and operating effectiveness of internal controls relating to subsidy income and related receivables.
Subsidy income pertaining to the Nutrient and other allied business is recognised on the basis of the rates notified from time to time in accordance with the Nutrient Based Subsidy (‘NBS') policy by the Department of Fertilisers (‘DOF') Government of India (‘GOI') and the conditions attached to subsidy income under Direct Benefit Transfer (‘DBT') System. The principles of Ind AS 20 requires matching of subsidy income with the related costs which it is intended to compensate and accordingly subsidy income is recognized over a period on a systematic basis to match it with the related costs and on satisfaction of relevant conditions specified in the notifications. • We enquired with the relevant personnel in the Company read and understood their interpretations of the relevant circulars and notifications issued by GOI from time to time with regard to the subsidy policies that impact subsidy income and related receivables.
Recognition of subsidy income and assessment of significant its recoverability is subject to exercise of judgement and interpretation of relevant notifications by the management which includes satisfaction of conditions specified in notifications assessment of applicable rates for fertilizers sold evaluation of recoverability of receivables etc and has accordingly been considered as a key audit matter. • We tested the NBS rates considered by the Company for the product subsidy with the applicable circulars and notifications and discussed with the management and Those Charged With Governance the appropriateness of the subsidy rates applied to recognise subsidy income.
• We correlated the sales quantity considered for subsidy income with the actual sales made by the Company and customer acknowledgements as per the iFMS portal of the DOF.
• We reviewed the quantities and rates considered for the purpose of recognising freight subsidy.
• We evaluated Management's assessment and reviewed underlying calculations regarding compliance with relevant conditions as specified in the notifications and policies.
• We analysed and discussed the status of outstanding subsidy receivables and its realisability with the Management and assessed the reasonability of provisions made towards outstanding subsidy receivables
• We tested the sanction notes received from the GOI for receipts and traced credits to bank statements for the receipts during the year and also the subsequent receipts.
• We assessed the presentation of subsidy income along with related receivables and related disclosures in the standalone financial statements.

Other Information

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Annualreport but does not include the standalone financial statements and our auditor's reportthereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whethersuch other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements for the financial year ended March 31 2022 and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Other Matter

The financial statements of the Company for the year ended March 312021 included in these standalone financial statements have been audited by thepredecessor auditor who expressed an unmodified opinion on those statements on April 292021.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the "Annexure 1" a statement on thematters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

(b) In our opinion proper books of account as required by law havebeen 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 including theStatement of Other Comprehensive Income the Cash Flow Statement and Statement of Changesin Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withCompanies (Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2022 from being appointed as a director in termsof Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlswith reference to these standalone financial statements and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure 2" to this report;

(g) In our opinion the managerial remuneration for the year endedMarch 31 2022 has been paid / provided by the Company to its directors in accordance withthe provisions of section 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements - Refer note 36 to thestandalone financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company

iv. a) The management has represented that to the best of itsknowledge and belief other than as disclosed in the note

6 to the standalone financial statements no funds have been advancedor loaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the company to or in any other persons or entities including foreignentities ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediary shall whether directly or indirectly lend or investin other persons or entities identified in any manner whatsoever by or on behalf of thecompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;

b) The management has represented that to the best of its knowledgeand belief no funds have been received by the company from any persons or entitiesincluding foreign entities ("Funding Parties") with the understanding whetherrecorded in writing or otherwise that the company shall whether directly or indirectlylend or invest in other persons or entities identified in any manner whatsoever by or onbehalf of the Funding Party ("Ultimate Beneficiaries") or provide any guaranteesecurity or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures that were considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) contain any materialmisstatement.

v. As stated in note 17 to the standalone financial statements

a) The final dividend paid by the Company during the year in respect ofthe same declared for the previous year is in accordance with section 123 of the Act tothe extent it applies to payment of dividend.

b) The interim dividend declared and paid by the Company during theyear and until the date of this audit report is in accordance with section 123 of the Act.

c) The Board of Directors of the Company have proposed final dividendfor the year which is subject to the approval of the members at the ensuing Annual GeneralMeeting. The dividend declared is in accordance with section 123 of the Act to the extentit applies to declaration of dividend.

Annexure '1' referred to in paragraph under the heading "Report onother legal and regulatory requirements" of our report of even date

Re: Coromandel International Limited ("the Company")

In terms of the information and explanations sought by us and given bythe company and the books of account and records examined by us in the normal course ofaudit and to the best of our knowledge and belief we state that:

(i) (a) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant andequipment.

(b) The Company has maintained proper records showing full particularsof intangible assets.

(b) The Property Plant and Equipment were physically verified duringthe year by the Management in accordance with a regular program of verification which inour opinion provides for physical verification of all the Property plant and equipmentat reasonable intervals. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deed / transferdeed / conveyance deed provided to us we report that the title deeds comprising all theimmovable properties of land and buildings which are freehold are held in the name of theCompany as at the balance sheet date except the following:

Description of property Gross carrying value (Rs. in lakhs) Held in name of Whether promoter director or their relative or employee Period held - indicate range where appropriate Reason for not being held in name of company
446.92 acres of freehold land located at Pattamadai 75 E.I.D.-Parry (India) Limited Yes - held by holding company 2017-2022 Acquired through business combination pending to be registered in the name of the Company

In respect of immovable properties of land and buildings that have beentaken on lease the lease agreements are in the name of the Company where the Company isthe lessee in the agreement as at the balance sheet date except the following:

Description of property Gross carrying value (Rs. in lakhs) Held in name of Whether promoter director or their relative or employee Period held - indicate range where appropriate Reason for not being held in name of company
321.22 acres of leasehold land at Vishakhapatnam 21662 NA No 2014-2022 Lease deed pending to be renewed in the name of the Company
3.52 acres of leasehold land at Madri Udaipur 17 Liberty Pesticides and Fertilizers Limitedd> No 1997-2022 Lease deed pending to be transferred in the name of the Company

(d) The Company has not revalued any of its Property Plant andEquipment (including right-of-use assets) and intangible assets during the year.

(e) No proceedings have been initiated during the year or are pendingagainst the Company as at March 31 2022 for holding any benami property under the BenamiTransactions (Prohibition) Act 1988 (as amended in 2016) and rules made thereunder.

(ii) (a) The management has conducted physical verification ofinventory including inventory lying with third parties at reasonable intervals during theyear. In our opinion the coverage and the procedure of such verification by themanagement is appropriate. No discrepancies of 10% or more in aggregate for each class ofinventory were noticed on such physical verification.

(b) As disclosed in note 18 to the financial statements the Companyhas been sanctioned working capital limits in excess of Rs. five crores in aggregate frombanks and/or financial institutions during the year on the basis of security of currentassets of the Company. The quarterly returns/statements filed by the Company with suchbanks and financial institutions are in agreement with the books of accounts of theCompany.

(iii) (a) According to the information and explanations given by themanagement during the year the Company has the Company has provided loans and stoodguarantee to other entities the details of which are tabulated below: (Rs. In Lakhs)

Particulars Loans Advance in nature of loans Guarantees (Financial guarantees) Security
Aggregate amount granted / provided during the year
- Subsidiaries - - - -
- Joint ventures - - - -
- Associates - - - -
- Others (term deposits placed with a financial institution) 92000 - - -
Balance outstanding as at the balance sheet date in respect of above cases
- Subsidiaries - - - -
- Joint ventures - - - -
- Associates - - - -
- Others (Balance of term deposits placed with a financial institution and loans to others) 195600 - 7194 -

(b) According to the information and explanations given to us and basedon audit procedures performed by us we are of the opinion that the investments madeguarantees provided securities given and the terms and conditions of all loans grantedare not prejudicial to the company's interest.

(c) According to the information and explanations given to us and basedon audit procedures performed by us in respect of loans provided by the company theschedule of repayment of principal and payment of interest has been stipulated and therepayment/receipts are regular.

(d) There are no amounts of loans and advances in the nature of loansgranted to companies firms limited liability partnerships or any other parties which areoverdue for more than ninety days.

(e) There were no loans or advance in the nature of loan granted tocompanies firms Limited Liability Partnerships or any other parties which was fallen dueduring the year that have been renewed or extended or fresh loans granted to settle theoverdues of existing loans given to the same parties. Renewal of term deposits placed withfinancial institutions (HDFC Limited) in the normal course of business is not consideredfor reporting under this clause.

(f) According to the information and explanations given to us and basedon audit procedures performed by us the Company has not granted any loans or advances inthe nature of loans either repayable on demand or without specifying any terms or periodof repayment to companies firms Limited Liability Partnerships or any other parties.Accordingly the requirement to report on clause 3(iii)(f) of the Order is not applicableto the Company.

(iv) Loans investments guarantees and security in respect of whichprovisions of sections 185 and 186 of the Act are applicable have been complied with bythe Company.

(v) The Company has neither accepted any deposits from the public noraccepted any amounts which are deemed to be deposits within the meaning of sections 73 to76 of the Act and the rules made thereunder to the extent applicable. Accordingly therequirement to report on clause 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148(1) of the Act related to the manufacture of fertilizerspesticides other goods and are of the opinion that prima facie the specified accountsand records have been made and maintained. We have not however made a detailedexamination of the same.

(vii) (a) The Company is generally regular in depositing withappropriate authorities undisputed statutory dues including goods and services taxprovident fund employees' state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax cess and other statutory dues applicable to it.According to the information and explanations given to us and based on audit proceduresperformed by us no undisputed amounts payable in respect of these statutory dues wereoutstanding at the year end for a period of more than six months from the date theybecame payable.

(b) The dues of goods and services tax provident fund employees'state insurance income-tax sales-tax service tax duty of custom duty of excise valueadded tax cess and other statutory dues have not been deposited on account of anydispute are as follows:

Name of the statute Nature of the dues Forum where the dispute is pending Period to which the amount relates Issue amount (Rs. Lakhs) Amount paid (Rs. Lakhs)
The Income Tax Act 1961 Income tax Income Tax Appellate Tribunal 2015-16 46 9
The Income Tax Act 1961 Income tax CIT (Appeals) 2016-17 64 13
The Income Tax Act 1961 Income tax CIT (Appeals) 2017-18 634 112
West Bengal Sales Tax Act1994 Sales tax Sales Tax Appellate Tribunal 2008-2009 2013-14 1058 100
West Bengal Sales Tax Act1994 Sales tax Special Joint Commissioner 2012-13 2 -
Andhra Pradesh General Sales Tax Act 1957 Sales tax Sales Tax Appellate Tribunal 2013-2014 14 -
Uttar Pradesh Value Added Tax Act 2008 Sales tax Deputy Commissioner 2008-2009 125 14
Uttar Pradesh Value Added Tax Act 2008 Sales tax Deputy Commissioner (Appeals) 2012-13 1 -
Uttar Pradesh Value Added Tax Act 2008 Sales tax Sales Tax Appellate Tribunal 2012-13 35 -
Uttar Pradesh Value Added Tax Act 2008 Sales tax Various Appellate Authorities 2012-13 and 2013-14 11 1
Gujarat Value Added Tax Act 2003 Sales tax Appellate Deputy Commissioner (Appeals) 1999-00 13 -
Gujarat Value Added Tax Act 2003 Sales tax Various Appellate Authorities 2005-06 2007-09 2010-11 2012-13 and 2015-16 64 -
Gujarat Value Added Tax Act2003 Sales tax Sales Tax Appellate Tribunal 2008-09 to 2013-14 91 -
The Jammu & Kashmir Value Added Tax Act 2005 Sales tax Joint Commissioner (Appeals) 2013-14 13 -
Electricity Supply Act 1948 Electricity Cess High Court for the State of Telangana 2003-2004 to 20132014 293 -
Central Excise Act 1944 Excise duty High Court for the State of Telangana 2003 to2007 368 -
Central Excise Act 1944 Excise duty High court of madras 2001-2003 7 -
Central Excise Act 1944 Excise duty Commissioner (Appeals) 2004-05 2008-09 to 2016-17 149 -
The Customs Act 1962 Customs duty CESTAT 2009-10 to 2011-12 & 2017-18 67 5
The Customs Act 1962 Customs duty Commissioner of Customs (Appeals) 2006-2011 383 23
The Customs Act 1962 Customs duty Commissioner of Customs (Appeals) 2006-2011 383 23
The Customs Act 1962 Customs duty High Court for the state of Telangana 2018-2019 461 -
The Customs Act 1962 Customs duty Commissioner of Customs 2015-16 12 -
Central Goods and Services Taxes GST Additional Commissioner (Appeals) 2017-2018 37 -
The Finance Act1994 Service tax Commissioner (Appeals) 2014-15 to 2017-18 48 -
The Finance Act1994 Service tax CESTAT 2009-2010 to 20162017 269 21

(viii) The Company has not surrendered or disclosed any transactionpreviously unrecorded in the books of account in the tax assessments under the Income TaxAct 1961 as income during the year. Accordingly the requirement to report on clause3(viii) of the Order is not applicable to the Company.

(ix) (a) The Company has not defaulted in repayment of loans or otherborrowings or in the payment of interest thereon to any lender.

(b) The Company has not been declared wilful defaulter by any bank orfinancial institution or government or any government authority.

(c) The Company did not have any term loans outstanding during the yearhence the requirement to report on clause (ix) (c) of the Order is not applicable to theCompany.

(d) On an overall examination of the financial statements of theCompany no funds raised on short-term basis have been used for long-term purposes by theCompany.

(e) On an overall examination of the financial statements of theCompany the Company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries associates or joint ventures.

(f) The Company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries joint ventures or associate companies. Hence therequirement to report on clause (ix)(f) of the Order is not applicable to the Company.

(x) (a) The Company has not raised any money during the year by way ofinitial public offer / further public offer (including debt instruments) hence therequirement to report on clause 3(x)(a) of the Order is not applicable to the Company.

(b) The Company has not made any preferential allotment or privateplacement of shares /fully or partially or optionally convertible debentures during theyear under audit and hence the requirement to report on clause 3(x)(b) of the Order isnot applicable to the Company.

(xi) (a) No fraud by the Company or no material fraud on the Companyhas been noticed or reported during the year.

(b) During the year no report under sub-section (12) of section 143 ofthe Act has been filed by cost auditor/ secretarial auditor or by us in Form ADT - 4 asprescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014 with the CentralGovernment.

(c) We have taken into consideration the whistle blower complaintsreceived by the Company during the year while determining the nature timing and extent ofaudit procedures.

(xii) (a) The Company is not a nidhi Company as per the provisions ofthe Act. Therefore the requirement to report on clause

3(xii)(a) 3(xii)(b) and 3(xii)(c) of the Order are not applicable tothe Company.

(xiii) Transactions with the related parties are in compliance withsections 177 and 188 of the Act where applicable and the details have been disclosed inthe notes to the financial statements as required by the applicable accounting standards.

(xiv) (a) The Company has an internal audit system commensurate withthe size and nature of its business.

(b) The internal audit reports of the Company issued till the date ofthe audit report for the period under audit have been considered by us.

(xv) The Company has not entered into any non-cash transactions withits directors or persons connected with its directors and hence requirement to report onclause 3(xv) of the Order is not applicable to the Company.

(xvi) (a) The provisions of section 45-IA of the Reserve Bank of IndiaAct 1934 (2 of 1934) are not applicable to the Company.

Accordingly the requirement to report on clause (xvi)(a) of the Orderis not applicable to the Company.

(b) The Company has not conducted any Non-Banking Financial or HousingFinance activities without obtained a valid Certificate of Registration (CoR) from theReserve Bank of India as per the Reserve Bank of India Act 1934.

(c) The Company is not a Core Investment Company as defined in theregulations made by Reserve Bank of India. Accordingly the requirement to report onclause 3(xvi)(c) of the Order is not applicable to the Company.

(d) There are 2 registered Core Investment Companies (CICs) as a partof the Group as defined under Core Investment Companies (Reserve Bank) Directions.

(xvii) The Company has not incurred cash losses in the current orimmediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors duringthe year and accordingly requirement to report on Clause 3(xviii) of the Order is notapplicable to the Company.

(xix) On the basis of the financial ratios disclosed in note 45 to thefinancial statements ageing and expected dates of realization of financial assets andpayment of financial liabilities other information accompanying the financial statementsour knowledge of the Board of Directors and management plans and based on our examinationof the evidence supporting the assumptions nothing has come to our attention whichcauses us to believe that any material uncertainty exists as on the date of the auditreport that Company is not capable of meeting its liabilities existing at the date ofbalance sheet as and when they fall due within a period of one year from the balance sheetdate. We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.

(xx) (a) In respect of other than ongoing projects there are nounspent amounts that are required to be transferred to a fund specified in Schedule VII ofthe Companies Act (the Act) in compliance with second proviso to sub section 5 of section135 of the Act. This matter has been disclosed in note 38 to the financial statements.

(b) The Company has not transferred the amount remaining unspent inrespect of ongoing projects to a Special Account till the date of our report. Howeverthe period for such transfer i.e. thirty days from the end of the financial year aspermitted under sub section (6) of section 135 of the Companies Act has not elapsed tillthe date of our report. This matter has been disclosed in note 38 to the financialstatements.

Annexure 2 to the Independent Auditor's Report of even date on thestandalone financial statements of Coromandel International Limited

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference tostandalone financial statements of Coromandel International Limited ("theCompany") as of March 31 2022 in conjunction with our audit of the standalonefinancial 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 andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to theCompany'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 Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to these standalone financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the "Guidance Note") and theStandards on Auditing as specified under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both issued by ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to these standalone financial statements was establishedand maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to these standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to standalone financial statements included obtaining anunderstanding of internal financial controls with reference to these standalone financialstatements assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols with reference to these standalone financial statements.

Meaning of Internal Financial Controls With Reference to theseStandalone Financial Statements

A company's internal financial controls with reference to standalonefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles.

A company's internal financial controls with reference to standalonefinancial statements includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With Reference toStandalone Financial Statements

Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at March 31 2022 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note issued by the ICAI.

For S.R. Batliboi & Associates LLP

Chartered Accountants ICAI Firm

Registration Number: 101049W/E300004

per Shankar Srinivasan

Partner

Membership Number: 213271

UDIN: 22213271AHYVUJ4040

Place of Signature: Hyderabad

Date: April 28 2022

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