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Gujarat Mineral Development Corporation Ltd.

BSE: 532181 Sector: Metals & Mining
NSE: GMDCLTD ISIN Code: INE131A01031
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OPEN 157.90
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VOLUME 223755
52-Week high 228.50
52-Week low 65.75
P/E 6.24
Mkt Cap.(Rs cr) 5,120
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 157.90
CLOSE 156.75
VOLUME 223755
52-Week high 228.50
52-Week low 65.75
P/E 6.24
Mkt Cap.(Rs cr) 5,120
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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 GujaratMineral Development Corporation Limited ("the Company") which comprise theBalance Sheet as at 31st March 2021 and the Statement of Profit and Loss (includingOther Comprehensive Income) the Statement of Changes in Equity and the Cash FlowStatement for the year then ended notes to the standalone financial statements includinga summary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone financial statements").

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 in the manner so required and give a trueand fair view in conformity with accounting principles generally accepted in India of thestate of affair of the Company as at 31st March 2021 the loss and total comprehensiveincome changes in 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) specified under section 143(10) of the CompaniesAct 2013. Our responsibilitiesunder those Standards are further described in theAuditor's Responsibilities for the Auditof the Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Companies Act 2013 andthe 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 ouropinion.

Emphasis of Matter

i. We draw the attention to Note No. 2.35.01 of the standalone financial statementswherein during the year the company has written back the difference between the provisionfor income tax as per books of account and income tax payable on taxable income as perincome tax returns filed for earlier years amounting to ` 16087.27 lakh and the same hasbeen disclosed in the Statement of Profit and Loss Account as Short/Excess Provision forTax of Earlier years.

ii. We draw the attention to Note No. 2.48(b)(i) of the standalone financial statementswherein as per GST tax structure GMDC falls under inverted tax structure wherein InputTax credit(ITC) is higher than output tax liability. As per Rule 89 of GST GMDC is noteligible to get refund of ITC for services on or after 13th June2018. In view thereofsuch amounts of ITC of ` 5903.80 lakh have been written off during the year by giving theeffect by restating the figures of financial year 2019-20. Amounts aggregating ` 9302.95lakh pertaining to periods prior to 1st April 2019 have been written off during the yearby restating the balance of opening retained earnings.

iii. We draw the attention to Note No. 2.48(b)(ii) of the standalone financialstatements wherein till F.Y 2019-20 in respect of various lignite projects of thecompany the Company used to charge overburden removal expenditure based on plot-wisetechnically evaluated average stripping ratio after due adjustment for stripping activityon FIFO basis where the company has awarded 'unit rate' based contracts for overburdenremoval and lignite extraction.

From F.Y. 2020-21 in cases where the company has awarded unit ratebased contracts and/or in the contracts where payments are made based on actual strippingratio for overburden removal and lignite extraction stripping cost is charged ontechnically evaluated average stripping ratio at each plot of mine after due adjustmentfor stripping activity on FIFO basis in the Statement of Profit & Loss under the head"Loading of lignite and over burden removal".

On account of change in the accounting policy The profit for the yearhas increased by ` 3121.58 Lakh (Previous year ` 99.72 Lakh) and Stripping ActivityAdjustment assets under the head "Other Current Non Financial Assets "have alsobeen increased by the like amount.

iv. We draw attention to Note 2.49 of the standalone financialstatements as regards the management's evaluation of COVID-19 impact on the futureperformance of the Company.

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

Key Audit Matter

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

S.No Key Audit Matter Auditor's Response
1. Impairment loss of ATPS Plant (as described in note 2.42 of the financial statements) Our procedures included amongst others the following :
In the financial year 2020-21 the company has reviewed the carrying amount of ATPS's assets and the recoverable amount. The recoverable amount is higher of fair value less cost to sales and value in use. • Updating our understanding of management's annual impairment testing process
• Ensuring the methodology of the impairment exercise continues to comply with the requirements of indian accounting standards (INDAS) as adopted including evaluating management's assessment of indicators of impairment against indicators of impairment specified within INDAS 36.
In case of ATPS (cash generating unit) the recoverable amount i.e. fair value less cost to sale is ` 21901.81 lakh. Carrying amount of ATPS in books is ` 61561.30 lakh. Therefore there is an impairment loss of ` 39659.49 lakh being the difference between carrying amount and recoverable amount. 'Market Value' basis of Valuation has been adopted as per the framework and guidelines provided in the international valuation guidelines.
• Evaluating the independent external valuer's competence capabilities and objectivity
There is impairment loss of ` 39659.49 lakh which has been shown as an exceptional item in the Statement of Profit & Loss. • Understanding the methodologies used by the external valuer to estimate fair values.
• Verifying the completeness of disclosure in the standalone financial statements as per IND AS36.
We considered this area as key matter due to the significance of the carrying value of the assets being assessed and due to the level of management judgments impacting the impairment assessment.
2. Stripping Cost Principal Audit Procedures
Expenditure incurred on removal of mine waste materials (overburden) necessary to extract the lignite reserve is referred to as Stripping cost. Our audit approach was a combination of test of internal controls and substantive procedures which included the following:
Cost of stripping is charged on technical evaluated average stripping ratio at each plot of mine after due adjustment for stripping activity. • 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 anAuditor's Expert").
Refer Note (r) of the Significant Accounting Policies • Tested 'Average stripping ratio' by recalculating the Lignite to overburden.
• 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.
3. Contingent liabilities relating to Income tax (as described in note 2.37.01 of the financial statements) Our audit procedures included the following:-
The company has uncertain tax position including matters under dispute which involve significant judgment relating to the possible outcome of these disputes in estimation of the provision of income tax. Our audit procedures included obtaining details of completed tax assessments and outstanding demands as at the year ended March 31 2021 from management. We involved our internal experts to discuss with the management regarding estimates used to ascertain the tax provision of disputed cases.
In view of this the area has been considered as a Key Audit Matter. Our internal experts also considered legal precedence and other rulings in evaluating management's position on these disputed cases

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexure to Board's ReportBusiness Responsibility Report Report on CSR Activities Corporate Governance andShareholders Information but does not include the standalone financial statements and ourauditor's report thereon.

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 whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance total comprehensive income changes in equityand cash flows of the Company in accordance with the Indian Accounting Standards (Ind AS)prescribed under section 133 of the Act read with relevant rules issued thereunder andaccounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements the Board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company'sfinancial 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 auditors' 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 Standards on Auditing ('SAs')we exercise professional judgment and maintain professional skepticism throughout theaudit. 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 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 of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 aGovernment Company pursuant to the Notification No. GSR 463(E) dated 5th June 2015 issuedby Ministry of Corporate Affairs Government of India provisions of Section 197 oftheAct 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 Soni Jhawar & Co.
Chartered Accountants
F.R.N. 110386W
Harish Daga
Partner
Place:- Ahmedabad M. NO. 409620
Date:- 29.06.2021 UDIN: 21409620AAAABN4346

ANNEXURE 'A' TO THE AUDITORS' REPORT

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

The Annexure referred to in Independent Auditors' Report to the membersof Gujarat Mineral Development Corporation Limited ("the Company") on thestandalone financial statements for the year ended 31 March 2021.

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 and discrepancies which were noticed on such verification wereproperly 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 clause (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 Statute 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
Central Excise Act 1944 Excise 2011-12 450.46 Appellate Authority/ Adjudicating Level
Service Tax Service Tax Dec-15 to Aug 16 0.32 Appellate Tribunal
Service Tax Service Tax 2018-19 701.90 Appellate Authority/ Adjudicating Level
Service Tax Service Tax 2018-19 & 2019-20 509.78 Appellate Authority/ Adjudicating Level
Central Excise Act 1944 Excise Mar 11 - Jan 16 9.52 Appellate Tribunal
Central Excise Act 1944 Excise Mar 11 - Jan 16 64.78 Appellate Tribunal

viii. The Company does not have any loans or borrowings from any financialinstitutions banks 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 usall transactions withthe related parties are in compliance with sections 177 and 188 of the 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 given 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 Soni Jhawar & Co.
Chartered Accountants
F.R.N. 110386W
Harish daga
Place:- Ahmedabad Partner
Date:- 29.06.2021 M. NO. 409620

ANNEXURE 'B' TO THE AUDITORS' REPORT

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

Report on Internal Financial Controls over Financial Reporting

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 over financialreporting of Gujarat Mineral Development Corporation Limited ("theCompany") as of March 31 2021 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 Board of Directors 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 and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by The Institute of Chartered Accountantsof India. 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting 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 auditors' judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud 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 system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial 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 authorizations 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For Soni Jhawar & Co.
Chartered Accountants
F.R.N. 110386W
Harish daga
Place:- Ahmedabad Partner
Date:- 29.06.2021 M. NO. 409620

Annexure to the Independent Auditors' Report of Gujarat MineralDevelopment Corporation Ltd

To

The Members

Gujarat Mineral Development Corporation Ltd.

In continuation of our Independent Auditors' Report on StandaloneFinancial Statements of Gujarat Mineral Development Corporation Ltd. ("TheCompany") dated 29th June 2021 we have reported on Directions and Sub-directionunder section 143(5) of the Companies Act 2013 applicable for the year 2020-21 as under:

ANNEXURE-2(i)

Directions under Section 143(5) of the Companies Act 2013 Applicablefor the year 2020-21

Sr.No. Directions / Questions u/s 143(5) Action Taken Impact on Accounts and Financials
1 Whether the Company has system in place to process all the accounting transactions through IT system? If No 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
2 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. No impact
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.
3 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

ANNEXURE-2(ii)

Sector Specific Sub-directions under section 143(5) of the CompaniesAct 2013

Sr.No. Sub Directions issued/ Questions u/s 143(5) Action Taken Impact on Accounts and Financials
Manufacturing Sector
Mining
1 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 impact
No Major Displacement/Rehabilitation has been taken at any project of the company for the year 2020-21. (Please note that we are not technical expert)
2 Whether the Company had obtained the requisite statutory compliances that was required under mining and environmental rules and regulations? As per the information and explanation given to us the Company has obtained necessary consents from GPCB for mining projects. No impact
3 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. No impact
(Please note that we are not technical expert)
4 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 discontinued its Panandhro mine due to exhaust of lignite. Dead rent paid for above mine during the year ` 68.76 lakh. Not Applicable
5 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
1 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 the information and explanation provided to us the Company has made compliance of various pollution control Acts. No impact
In respect of utilization and disposal of ash generally the Company is using it in backfilling of mine in Panandhro project.
2 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
3 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? The 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 account on the basis of Test Certificate received from the laboratory. No impact
(Please note that we are not technical experts).
4 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
5 In the case of Hydroelectric Projects the water discharge is as per policy /guidelines issued by the State Government to maintain biodiversity. As informed to us no hydroelectric Project is carried out by the Company. Not Applicable
For not maintaining it penalty paid/payable may be reported.

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