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Gujarat Mineral Development Corporation Ltd.

BSE: 532181 Sector: Metals & Mining
NSE: GMDCLTD ISIN Code: INE131A01031
BSE 00:00 | 28 Oct 42.70 -0.45
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42.65

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43.15

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OPEN 43.00
PREVIOUS CLOSE 43.15
VOLUME 34381
52-Week high 72.40
52-Week low 29.50
P/E 5.57
Mkt Cap.(Rs cr) 1,358
Buy Price 42.70
Buy Qty 2.00
Sell Price 42.70
Sell Qty 30.00
OPEN 43.00
CLOSE 43.15
VOLUME 34381
52-Week high 72.40
52-Week low 29.50
P/E 5.57
Mkt Cap.(Rs cr) 1,358
Buy Price 42.70
Buy Qty 2.00
Sell Price 42.70
Sell Qty 30.00

Gujarat Mineral Development Corporation Ltd. (GMDCLTD) - Auditors Report

Company auditors report

To

The Members of

Gujarat Mineral Development Corporation Limited

Report on the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Gujarat MineralDevelopment Corporation Limited ("the Company") which comprise the BalanceSheet as at 31st March 2019 and the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Cash Flow Statement forthe year then ended notes to the standalone financial statements including a summary ofthe significant accounting policies and other explanatory information (herein afterreferred to as "standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 in the manner so required and give a true and fair view inconformity with accounting principles generally accepted in India of the state of affairof the Company as at 31st March 2019 the profit and total comprehensive income changesin equity and cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

i. We draw attention to note no. 2.02.01 and 2.48(a) of the standalone financialstatements wherein the company has changed the accounting policy relating to presentationof Government Grants. Earlier Government grants relating to the purchase or constructionof items of PPE or investment properties were included in non-financial liabilities asdeferred income and credited to Statement of Profit & Loss on a straight line basisover the expected life of the related assets and presented within the other income. NowGovernment grant relating to the purchase or construction of items of PPE or investmentproperties is deducted from cost of purchase/construction in arriving at the carryingamount of the asset in line with Ind AS 20.

The said change of accounting policy has resulted in decrease in Other Income anddepreciation to the tune of Rs. 43.04 Lakh for the year ended 31st March 2019 anddecrease in Investment Properties and Other Non-Current Non-Financial Liabilities by Rs.2458.59 Lakh.

ii. We draw the attention to Note No. 2.48(c) of the standalone financial statementswherein the company has changed its accounting policy of charging overburden removal onactual basis i.e. without adjustment of stripping ratio to charging overburden removalcost based on plot wise technically evaluated average stripping ratio on contract awardedbased on unit price.

The said change of accounting policy has resulted in increase in profit to the tune ofRs. 3328.13 Lakhs and increase in Non Current Non Financial Assets by the same amount.

iii. We draw the attention to Note No. 2.04.01 of the standalone financial statementswherein the company has made an investment in 2976.50 lakh equity shares of Rs.10 eachamounting to Rs. 29765 lakh of Bhavnagar Energy Company Limited (BECL). BECL was mergedwith Gujarat State Electricity Corporation Limited (GSECL) and GSECL has issued one sharehaving book value of Rs 12.01 against 2976.50 lakh equity shares of Rs.10 each amountingto Rs. 29765 lakh of BECL held by the company.

Therefore an amount of Rs. 29765 lakh has been written off during the year and hasbeen shown as an exceptional item in the Statement of Profit & Loss.

iv. We draw the attention to Note No. 2.48(b) of the standalone financial statementswherein the Company was treating the Power Purchase Agreement (PPA) entered with GujaratUrja Vikas Nigam Ltd. (GUVNL) for sale of power generated from thermal power plant locatedat Akrimota as assets given on operating lease. During the year the company hasdiscontinued treating the same as assets given on operating lease and accordingly incomefrom sale of power has been shown under the head 'Sale of Product' instead of 'OtherOperating Income'.

The above reclassification does not have any impact on profitability as well as totalassets of the Company.

Our opinion on the standalone financial statements and our Report on Other Legal andRegulatory Requirements is not modified in respect of the above matters.

Key Audit Matter

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. No. Key Audit Matter Auditor's Response
1. Stripping Cost Expenditure incurred on removal of mine waste materials (overburden) necessary to extract the lignite reserve is referred to as Stripping cost. Cost of stripping is charged on technical evaluated average stripping ratio at each plot of mine after due adjustment for stripping activity. Principal Audit Procedures Our audit approach was a combination of test of internal controls and substantive procedures which included the following:
• Evaluated the Overburden Removal (OB) and lignite reserve estimate and discussed with the geologist about geologist model estimation tools and sampling method (As per SA-620 "Using the Work of an Auditor's Expert").
• Tested 'Average stripping ratio' by recalculating the Lignite to overburden.
Refer Note (r) of the Significant Accounting Policies • Selected a sample of contracts and through inspection of evidence tested the operating effectiveness of the internal controls relating to stripping activity.
• Carried out a combination of procedures involving enquiry observation and inspection of evidence in respect of operation of these controls.
• Performed analytical procedures and test of details for reasonableness of expenditure incurred.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexure to Board's Report BusinessResponsibility Report Report on CSR Activities Corporate Governance and ShareholdersInformation but does not include the standalone financial statements and our auditor'sreport thereon.

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information we are required to report that fact. We have nothing to reportin this regard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the Indian Accounting Standards (Ind AS)prescribed under section 133 of the Act read with relevant rules issued there under andaccounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with Standards on Auditing ('SAs') we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override ofinternal control.

• Obtain an understanding of internal controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure 'A' a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.

2. In terms of Section 143(5) of the Companies Act 2013 we give in Annexure '2(i)& 2(ii)' a statement on the directions issued under the aforesaid section by theComptroller and Auditor General of India.

3. As required by Section 143 (3) of the Companies Act 2013 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 of the aforesaidstandalone financial statements.

b) In our opinion proper books of account as required by law relating to preparationof the aforesaid standalone financial statements have been kept by the Company so far asit appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss the Statement of Changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with therelevant books of account maintained for the purpose of the standalone financialstatements.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Companies Act 2013 read with Rule7 of the Companies (Accounts) Rules 2014.

e) Being a Government Company pursuant to the Notification No. GSR 463(E) dated 5thJune 2015 issued by Ministry of Corporate Affairs Government of India provisions ofsub-section (2) of Section 164 of the Companies Act 2013 are not applicable to theCompany.

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 'Annexure B'.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

Being a Government Company pursuant to the Notification No. GSR 463(E) dated 5thJune 2015 issued by Ministry of Corporate Affairs Government of India provisions ofSection 197 of the Act are not applicable to the company.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements- Refer Note 2.37 to the Standalonefinancial statements.

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

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

For S.C. Ajmera & Co.
Chartered Accountants
FRN 002908C
Place :- Ahmedabad Arun Sarupria - Partner
Date :- 09.05.2019 M. No. 078398

ANNEXURE ‘A' TO THE AUDITORS' REPORT

(Referred to in para 1 under ‘Report on Other Legal and Regulatory Requirements'section of our Report of even date)

The Annexure referred to in Independent Auditors' Report to the members of GujaratMineral Development Corporation Limited ("the Company") on the standalonefinancial statements for the year ended 31 March 2019.

We report that:

i. In respect of Fixed Assets

a. The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

b. The Company has a program of physical verification of its fixed assets by whichfixed assets are verified at reasonable intervals. In accordance with this program fixedassets were verified during the year and discrepancies which were noticed on suchverification were properly dealt with in the books of accounts.

c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the company.

ii. In respect of Inventory

a. The physical verification of inventory has been conducted at reasonable intervals bythe Management.

b. The procedure of physical verification of inventory followed by the management isreasonable and adequate in relation to the size of company and the nature of its business.

c. The company has maintained proper records of inventory. The discrepancies noticed onsuch verification between the physical stocks and book stocks were not material and thesame have been properly dealt with in the books of accounts.

iii. The company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013. Therefore requirement of clauses (iii) of the paragraph 3 of the order is notapplicable to the company.

iv. In respect of loans investments guarantees and security provisions of section185 and 186 of the Companies Act 2013 have been complied with as applicable.

v. The company has not accepted any deposits during the year as per the directivesissued by the Reserve Bank of India and within the meaning of the provisions of sections73 to 76 and other relevant provisions of the Companies Act 2013 and the rules framedthere under where applicable. Thus the clause (v) of paragraph 3 of the order is notapplicable to the company.

vi. In pursuant to the order made by the Central Government for the maintenance of costrecords under sub section (1) of section 148 of the Companies Act 2013 the company hasmade and maintained the prescribed accounts and records.

vii. In respect of statutory dues

a. According to the information and explanations given to us and on the basis of ourexamination the company is generally regular in depositing undisputed statutory duesincluding provident fund Investor Education and Protection Fund Employee's StateInsurance Income Tax Goods and Service Tax Sales Tax Wealth Tax Service Tax Duty ofExcise Value Added Tax and Cess and any other statutory dues with appropriateauthorities.

b. The details of excise duty service tax income tax and sales tax/VAT not depositedon account of dispute are as under:

Name of Statue Nature of the Dues Period to which the amount relates Amount (Rs. In Lakh) Forum where dispute is pending
Commercial tax Sales tax/VAT 1995-96 98.92 Appellate Tribunal
Commercial tax Sales tax/VAT 1997-98 2.45 Appellate Tribunal
Commercial tax CST 1997-98 4.26 Appellate Tribunal
Service Tax Service Tax Dec-15 to Aug 16 0.39 Appellate Tribunal
Service Tax Service Tax 2018-19 701.90 Directorate General of Central Excise Intelligence Zonal unit (DGCEIZ)
Service Tax Service Tax 2018-19 344.23 Office of the Commissioner of Central GST Kutch- Gandhidham
Central Excise Act 1944 Excise Jan 14 - Dec 14 1.23 Appellate Tribunal
Central Excise Act 1944 Excise Mar 11 - Jan 16 10.21 Appellate Tribunal
Central Excise Act 1944 Excise 2015-16 450.58 Appellate Tribunal
Income Tax Act 1961 Outstanding Demand A.Y 2009-10 1.68 ITAT
Income Tax Act 1961 Outstanding Demand A.Y 2011-12 121.21 ITAT
Income Tax Act 1961 Outstanding Demand A.Y 2013-14 194.31 ITAT

viii. The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year.

ix. The company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) or taken any term loan during the year.

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

xi. As per Notification No. GSR 463(E) dated 5 June 2015 issued by the Ministry ofCorporate Affairs Government of India Section 197 of the Companies Act 2013 is notapplicable to the Government Companies. Accordingly provisions of clause 3 (xi) of theOrder are not applicable to the Company.

xii. The provisions of clause 3 (xii) of the Order for Nidhi Company are notapplicable to the Company.

xiii. According to the information and explanations given to us all transactions withthe related parties are in compliance with sections 177 and 188 of Companies Act 2013where ever applicable and the details have been disclosed in the standalone FinancialStatements etc. as required by the applicable Indian Accounting Standards.

xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review.

xv. According to the information and explanations give to us and based on ourexamination of the records of the Company the company has not entered into non-cashtransactions with directors or persons connected with them during the year.

xvi. According to information and explanation given to us the Company is not requiredto be registered u/s 45-IA of Reserve Bank of India Act 1934. Accordingly provision ofclause 3(xvi) of the Order is not applicable to the Company.

For S.C. Ajmera & Co.
Chartered Accountants
FRN 002908C
Place :- Ahmedabad Arun Sarupria - Partner
Date :- 09.05.2019 M. No. 078398

ANNEXURE ‘B' TO THE AUDITORS' REPORT

Report on Internal Financial Controls over Financial Reporting

(Referred to in para 3(f) under 'Report on Other Legal and Regulatory Requirements'section of our Report of even date)

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

We have audited the internal financial controls over financial reporting of GujaratMineral Development Corporation Limited ("the Company") as of March 312019 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal 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 (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

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

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

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 standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that

1. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and

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

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S.C. Ajmera & Co.
Chartered Accountants
FRN 002908C
Place :- Ahmedabad Arun Sarupria - Partner
Date :- 09.05.2019 M. No.078398

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT OF GUJARAT MINERAL DEVELOPMENT CORPORATIONLTD

To

The Members

Gujarat Mineral Development Corporation Ltd.

In continuation of our Independent Audit Report on Standalone Financial Statement ofGujarat Mineral Development Corporation Ltd. ("The Company") dated 09.05.2019we have reported on Directions and Sub-direction under section 143(5) of the CompaniesAct 2013 applicable for the year 2018-19 as under:

ANNEXURE-2(i)

Directions under Section 143(5) of Companies Act 2013 Applicable for the year 2018-19

Directions/Questions u/s 143(5) Action Taken Impact on Accounts and Financials
Whether the Company has system in place to process all the accounting transactions through IT system? If yes the implication of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications if any may be stated. Yes the Company has Oracle based composite ERP System covering all the departments of the company from where accounting transactions are processed. We have not come across any case where accounting transactions are processed outside ERP. Therefore there is no financial implication on the integrity of the accounts. No impact
Whether there is any restructuring of an existing loan or cases of waiver/ write off of debts/loans/ interest etc made by a lender to the company due to company's inability to repay the loan? if yes the financial impact may be stated The company has no borrowing. Therefore there is no restructuring of an existing loan or cases of waiver/ write off of debts/loans/ interest etc made by a lender to the company due to company's inability to repay the loan. No impact
Whether funds received/ receivable for specific scheme from Central/ State agencies were properly accounted for / utilised as per its terms and conditions? List the cases of deviation Yes funds received/ receivable for specific scheme from Central/ State agencies were properly accounted for/ utilised as per its terms and conditions. No impact

 

For S.C. Ajmera & Co.
Chartered Accountants
FRN 002908C
Place :- Ahmedabad Arun Sarupria - Partner
Date :- 09.05.2019 M. No.078398

ANNEXURE-2(ii)

Sector Specific Sub-directions under section 143(5) of Companies Act 2013

Sub Directions issued/Questions u/s 143(5) Action Taken Impact on financials
Manufacturing Sector
Mining
Whether the company has taken adequate measures to reduce the adverse affect on environment as per established norms and taken up adequate measures for the relief and rehabilitation of displaced people. According to the information and explanation given to us the Company is obtaining environmental pollution monitoring report periodically from outside agency for each project to reduce/monitor the adverse effect on environment. No Displacement/Rehabilitation has been taken at any project of the Company for the year 2018-19. (Please note that we are not technical expert) No impact
Whether the Company had obtained the requisite statutory compliances that was required under mining and environmental rules and regulations? As per information and explanation given to us the Company has obtained necessary consents from GPCB for mining projects. No impact.
Whether overburden removal from mines and backfilling of mines are commensurate with the mining activity? As informed to us in respect of lignite projects overburden removal from mines and backfilling of mines are commensurate with the mining activity as per submitted/ approved/ prepared mine closure plan. (Please note that we are not technical expert) No Impact
Whether the Company has disbanded and discontinued mines if so the payment of corresponding dead rent there against may be verified. As informed to us the Company has neither disbanded nor discontinued any of its mines. Not Applicable
Whether the Company's financial statements had properly accounted for the effect of Rehabilitation Activity and Mine Closure Plan? The expenditure on Rehabilitation Activity and for Mine Closure is properly accounted in the books of account of the Company as per the policy adopted in this behalf. No impact
Power Sector
Generation
In the cases of Thermal Power Projects compliance of the various Pollution Control Acts and the impact thereof including utilization and disposal of ash and the policy of the company in this regard may be checked and commented upon. As per information and explanation provided to us the Company has made compliance of various pollution control Act. In respect of utilization and disposal of ash generally the Company is using it in backfilling of mine in Panandhro project. No impact
Has the company entered into revenue sharing agreements with private parties for extraction of coal at pitheads and it adequately protects the financial interest of the Company? As informed to us the Company has not entered into revenue sharing agreements with private parties for extraction of coal at pitheads. Not Applicable
Does the company have a proper system for reconciliation of quantity/ quality of coal ordered and received and whether grade of coal/ moisture and demurrage etc. are properly recorded in the books of accounts? Company does not purchase coal from the outside parties. However as informed to us the Company is having a system in ERP for reconciliation of quantity ordered and received and Grade of coal/ moisture and demurrage etc. are recorded in the books of accounts on the basis of Test Certificate received from the laboratory. (Please note that we are not technical experts). No impact
Sub Directions issued/Questions u/s 143(5) Action Taken Impact on financials
How much share of free power was due to the State Government and whether the same was calculated as per the agreed terms and depicted in the accounts as per accepted accounting norms? The power is sold to Government controlled entity and the same is calculated as per terms agreed in PPA (Power Purchase Agreement). No impact
In the case of Hydroelectric Projects the water discharge is as per policy /guidelines issued by the State Government to maintain biodiversity. For not maintaining it penalty paid/ payable may be reported. As informed to us no hydroelectric Project is carried out by Company. Not Applicable

 

For S.C. Ajmera & Co.
Chartered Accountants
FRN 002908C
Place :- Ahmedabad Arun Sarupria - Partner
Date :- 09.05.2019 M. No. 078398

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA

Comments of the Comptroller and Auditor General of India under Section 143(6)(B) of theCompanies Act 2013 on the Standalone Financial Statements of Gujarat Mineral DevelopmentCorporation Limited for the year ended 31 March 2019.

The preparation of standalone financial statements of Gujarat Mineral DevelopmentCorporation Limited Ahmedabad for the year ended 31 March 2019 in accordance with thefinancial reporting framework prescribed under the Companies Act 2013(Act) is theresponsibility of the management of the company. The statutory auditors appointed by theComptroller and Auditor General of India under section 139(5) of the Act are responsiblefor expressing opinion on the financial statements under section 143 of the Act based onindependent audit in accordance with the standards on auditing prescribed under section143(10) of the Act. This is stated to have been done by them vide their Audit Report dated9 May 2019.

I on behalf of the Comptroller and Auditor General of India have conducted asupplementary audit of the financial statements of Gujarat Mineral Development CorporationLimited for the year ended 31 March 2019 under section 143(6) (a) of the Act. Thissupplementary audit has been carried out independently without access to the workingpapers of the statutory auditors and is limited primarily to inquiries of the statutoryauditors and company personnel and a selective examination of some of the accountingrecords.

On the basis of my supplementary audit nothing significant has come to my knowledgewhich would give rise to any comment upon or supplement to Statutory Auditors' Reportunder section 143(6)(b) of the Act.

For and on behalf of the

Comptroller and Auditor General of India

H. K. Dharmadarshi

Pr. Accountant General (E&RSA) Gujarat

Place : Ahmedabad

Date : 26/07/2019

.