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India Cements Ltd.

BSE: 530005 Sector: Industrials
NSE: INDIACEM ISIN Code: INE383A01012
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OPEN 184.45
PREVIOUS CLOSE 184.25
VOLUME 83656
52-Week high 232.05
52-Week low 134.05
P/E 29.49
Mkt Cap.(Rs cr) 5,694
Buy Price 183.80
Buy Qty 2.00
Sell Price 183.95
Sell Qty 73.00
OPEN 184.45
CLOSE 184.25
VOLUME 83656
52-Week high 232.05
52-Week low 134.05
P/E 29.49
Mkt Cap.(Rs cr) 5,694
Buy Price 183.80
Buy Qty 2.00
Sell Price 183.95
Sell Qty 73.00

India Cements Ltd. (INDIACEM) - Auditors Report

Company auditors report

To the Members of The India Cements Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying Standalone Ind AS Financial Statementsof The India Cements Limited ("the Company") which comprise the Balance sheetas at 31st March 2021 the statement of Profit and Loss (Including Other ComprehensiveIncome) the Cash Flow Statements and the Statement of Changes in Equity for the year thenended and notes to the financial statements including a summary of significantaccounting 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 Ind AS 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 March312021 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 standalone Ind AS 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's Responsibilities for the Audit of the Standalone Ind AS FinancialStatements' section of our report. We are independent of the Company in accordancewith 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 Ind AS 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 our auditopinion on the standalone Ind AS financial statements.

Emphasis of Matter

Without qualifying our report we draw attention to

(a) Note No.41.4 of the Standalone Ind AS Financial Statementsregarding the order of attachment issued by the authorities through which certain assetsof the company amounting to Rs.120.34 Crores have been attached vide provisionalattachment Order dated 25th February 2015 which the company is disputing before legalforums. The company has been legally advised that it has strong grounds to defend itsposition pending the outcome of the proceedings the impact if any is not ascertainable atthis stage accordingly no adjustments have been made in the standalone Ind AS financialstatements.

(b) Note No.41.2(f) of the Standalone Ind AS Financial Statementsrelating to the order of the Competition Commission of India (CCI) alleging contraventionof the provisions of Competition Act 2002 and imposing a penalty of Rs.187.48 Crores onthe Company. On Company's appeal National Company Law Appellate Tribunal (NCLAT) inthe interim order directed the company to pay 10% of the Penalty amount (18.75 Crores)before getting stay which has been deposited by the company. Subsequently in its finalorder passed on 25th July 2018 NCLAT has reportedly upheld the CCI's Order. Thecompany appealed against the order before Supreme Court and the Supreme Court vide itsOrder dated 05th October 2018 admitted the Company's appeal and directed that theinterim order passed by the NCLAT in the matter shall continue setting aside the finalorders passed by NCLAT on 25th July 2018. Pending the outcome no adjustments have beenmade in the Standalone Ind AS Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the standalone Ind AS financialstatements for the financial year ended March 312021. These matters were addressed in thecontext of our audit of the standalone Ind AS financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report. For each matter below our description of how our audit addressed thematter is provided in that context.

1. Revenue recognition:

Discounts Incentives and Rebates etc.:

Reasons why the matter was determined to be a key audit matter Auditor's Response
(i) Revenue is measured net of discounts incentives and rebates on the Company's sales. Our procedures included:
(ii) The Company has its presence across different marketing regions within the country and operates in competitive business environment. • Assessing the appropriateness of the Company's revenue recognition accounting policies including those relating to discounts incentives and rebates as required under the applicable accounting standards.
The company recognises discounts incentives and rebates at the time of sale either on provisional basis or on contracted terms. • Testing the effectiveness of the Company's controls over the determination of discounts incentives and rebates based on commitments made either contracted or determined by the market forces.
The assessment of entitlement of discounts incentives and rebates recognised on sales made during the year is material and considered to be complex and dependent on various performance obligations of customers and market conditions. • Obtaining management's assessment of its obligations towards discounts incentives and rebates including accruals under applicable schemes and compare the overall assessment of the obligations with the approved schemes on sample basis.
There is a risk of revenue being affected as a result of variations in assessment of discounts incentives and rebates recognised on sales. • Examined on a sample basis all the supporting documentation required for computing the company's obligation towards discounts incentives and rebates recorded and disbursed during the year including credit notes issued after the year end date to determine whether these were recorded appropriately covering the stated obligations.
Given the complexity involved in the assessment of provisions required for discounts incentives and rebates the same is considered as key audit matter. • The management's assessment of discounts incentives and rebates recorded for the current year have been compared on an overall basis with the past practices to assess the adequacy of provisions made during the current year read with the changing competitive market dynamics as explained by the management.
• Our examination includes procedures to identify any unusual or irregular items.

2. Litigations and Contingencies:

Reasons why the matter was determined to be a key audit matter Auditor's Response
The Company is engaged in large number of legal and tax related litigations which have been disclosed / provided for in the financial statements based on the facts and circumstances of each case considering its operations spread across various regions within India involving the company to deal with different regulatory frameworks. Our audit procedures included the following:
Taxation and other litigation exposures have been identified as a key audit matter due to the timescales involved for resolution and the potential financial impact arising out of these on the financial statements given the inherent complexity and magnitude of potential exposures across the Company and the judgement necessary to estimate the amount of provisions required or to determine required disclosures. • Gained an understanding of the process of identification of claims litigations and contingent liabilities and identified key controls in the process.
Further significant management judgement is involved in assessing the exposure of each case and eventual obligation on the company and thus there is a risk that such cases may not be adequately provided for or disclosed. For selected controls we have performed relevant control tests.
These estimates could change substantially over time as new facts emerge and each legal case progress and subsequent judicial guidance emerges or statutory amendments if any with retrospective effects are enacted having a bearing on the ongoing litigation. • Obtained the summary of Company's legal and tax cases and critically assessed management's position through discussions with the Legal Counsel and operational management on both the probability of success in significant cases and the magnitude of any potential loss.
(Refer note 41.2 & 41.4 to the standalone Ind AS financial statements). • Obtained and reviewed external legal opinions (where considered necessary and made available) and other evidence to corroborate management's assessment of the risks in respect of pending litigations.
• Engaged with legal experts to evaluate the appropriateness of the legal positions taken by the management with respect to different tax issues.
• Assessed whether management assessment of similar cases is consistent across the plants/divisions or that differences in positions are adequately justified.
• Assessed the appropriateness of disclosures made in the financial statements to examine whether they reflect the facts and circumstances of the respective litigations and the requirements of relevant accounting standards.

3. Allowance for Receivables:

Reasons why the matter was determined to be a key audit matter Auditor's Response
Trade receivables of the company comprise mainly receivables from its customers towards sale of cement both in domestic and export markets and other cement related products and shipping and infrastructure development business. We have performed the following procedures in relation to the recoverability of trade receivables:
The operating environment in the cement industry and other businesses the company operates has the inherent risks of default on receivables from the company's customers more so in the back ground of pandemic related challenges affecting the business environment. • Tested the aging of trade receivables at year end on a sample basis;
In particular in the event of financial stress at the customers end the company is exposed to potential risk of financial loss when the customers fail to meet their payment obligations in accordance with the agreed credit terms. • Obtained a list of outstanding receivables along with confirmation of balances on a sample basis as per the auditing standards and identified the relevant receivables due beyond the credit terms and discussed the current status with the management.
The recoverable amount was estimated by management based on their specific recoverability assessment on individual debtor with reference to the aging profile historical payment pattern and the past record of default of the customer including assessment of ongoing litigations against the defaulting customers. Management would make specific provision against individual balances with reference to the recoverable amount. • Assessed the recoverability of the unsettled receivables on a sample basis through our evaluation of management's assessment with reference to the credit profile of the customers historical payment pattern of customers publicly available information if any and latest correspondence with customers and further assessed the adequacy of provisions made for any possible non recoveries; and
For the purpose of determination of provision requirement significant judgements and assumptions including the credit risk assessment of customers the timing and amount of realisation of these receivables are required for the identification of impairment events and the determination of the provision to be made towards the receivables. • Tested subsequent settlement of trade receivables after the balance sheet date on a sample basis.

Other Information

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Board Report including Annexures to Board's Report like ManagementDiscussion and Analysis Business Responsibility Report Corporate Governance andShareholder's Information etc. but does not include the standalone Ind AS financialstatements and our auditor's report thereon. The above reports are expected to bemade available to us after the date of the auditor's report.

Our opinion on the standalone Ind AS financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the standalone Ind AS financialstatements our responsibility is to read the other information identified above when itbecomes available and in doing so consider whether the other information is materiallyinconsistent with the standalone Ind AS financial statements or our knowledge obtained inthe audit or otherwise appears to be materially misstated.

When we read the above reports if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance.

Responsibilities of Management and Those Charged with Governance forthe Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these StandaloneInd AS Financial Statements that give a true and fair view of the financial positionfinancial performance including Other Comprehensive Income cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (IND AS) specified under section 133 ofthe Act read with relevant rules issued there under. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and the 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 Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS 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.

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

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether due to fraud or error and to issue an Auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance but is not a guarantee that anaudit conducted 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 Ind AS financialstatements.

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 Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate 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 system in place and theoperating 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 thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind AS financial statements represent the underlying transactions and events ina manner that achieves 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 standalone IndAS financial statements of the financial year ended March 312021 and are therefore thekey audit matters. We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest 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 subsection(11) of section 143 of the Act we give in the "Annexure A" 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 have beenkept 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 othercomprehensive income the Cash Flow Statement and the Statement of Changes in Equity dealtwith by this Report are in agreement with the books of accounts.

d) In our opinion the aforesaid standalone Ind AS financial statementscomply with the Ind AS specified under Section 133 of the Act read with Companies (IndianAccounting Standard) Rules 2015 as amended.

e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company with reference to these standalone Ind AS financialstatements and the operating effectiveness of such controls refer to our separate Reportin "Annexure B" to this report.

g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and accordingto the explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements - Refer Note 41.2 &41.4 to standalone Ind AS 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.

3. With respect to the matter to be included in the Auditors'Report under section 197(16) of the Act:

In our opinion and according to the information and explanations givento us the remuneration provided by the Company to its directors during the current yearis in accordance with the provisions of section 197 of the Act.

For K.S. RAO & CO. For S. VISWANATHAN LLP.
Chartered Accountants Chartered Accountants
Firm Regn No: 003109S Firm Regn No: 004770S/S200025
M. KRISHNA CHAITHANYA CHELLA K. SRINIVASAN
Partner Partner
Membership No.231282 Membership No.023305
UDIN: 21231282AAAACC7519 UDIN: 21023305AAAADL1364
Place : Chennai
Date : 24th May 2021

ANNEXURE ‘A' TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in paragraph 1 under ‘Report on OtherLegal and Regulatory Requirements' section of our report of even date

i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of itsfixed assets by which fixed assets are verified in a phased manner over a period of threeyears. Pursuant to the programme certain fixed assets were physically verified by themanagement during the year and according to the information and explanations given to usno material discrepancies were noticed on such verification. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets.

(c) In our opinion and according to the information and explanationsgiven to us and on the basis of our examination of the records of the Company the titledeeds of immovable properties are held in the name of the Company except for the followingwhich are not held in the name of the company. In regard to Immovable properties of landand buildings wherever title deeds have been pledged as securities towards loansguarantees etc availed by the company the same are stated to have been held in the name ofthe company and are confirmed by the lenders as on the reporting date.

(INR in Lakhs)

Particulars of Land & Building Value as at 31.03.2021 No of Cases
Gross Block Net Block
Building - Apartment at Delhi 5.70 4.48 1

ii) According to the information and explanations given to us theinventories were physically verified during the year by the management at reasonableintervals and no material discrepancies were noticed on physical verification.

iii) According to the information and explanations given to us theCompany has granted loans to body corporates covered in the register maintained underSection 189 of the Companies Act 2013 in respect of which:

(a) The terms and conditions of the grant of such loans are in ouropinion prima facie not prejudicial to the Company's interest.

(b) The schedule of repayment of principal and payment of interest hasbeen stipulated and repayments or receipts of principal amounts and interest have beenregular as per stipulations.

(c) There is no overdue amount remaining outstanding as at theyear-end.

iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theAct in respect to the loans given investments made guarantees given and securityprovided.

v) In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits from the public during the year.

vi) The maintenance of cost records has been specified by the centralgovernment under section 148(1) of Companies Act 2013. We have broadly reviewed the costrecords maintained by the company pursuant to Companies (Cost Records and Audit) Rules2014 as amended prescribed by the central government under sub-section (1) of section 148of Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been made and maintained. We have however not made a detailed examination ofthe said records with a view to determine whether they are accurate or complete and wehave relied on the reports of cost auditors in this regard.

vii) According to the information and explanations given to us and onthe basis of our examination of the books of account in respect of statutory dues:

a) The company has generally been regular in depositing undisputedstatutory dues barring few instances of delays in making payment towards Provident FundEmployees' State Insurance Income-tax Goods and Service Tax Duty of Customs ValueAdded Tax Cess and any other Statutory Dues to the appropriate authorities. There were noundisputed amounts payable towards Provident Fund

Employees' State Insurance Income-tax Goods and Service TaxDuty of Customs Cess and any other Statutory Dues as on 31st of March 2021 for a periodof more than six months from the date they became payable.

b) According to the information and explanations given to us and on thebasis of our examination of the records of the Company details of dues of Sales taxIncome tax Service tax Customs Duty Excise duty VAT and Cess which have not beendeposited as on 31st March 2021 on account of any dispute and the forum where disputes arepending is given in Annexure - I.

viii) Based on the audit procedure and according to the informationgiven to us we are of the opinion that the company has not defaulted in repayment ofloans or borrowings to financial institutions banks or government or dues to debentureholders.

ix) In our opinion and according to the information and explanationsgiven to us and based on the records produced for our perusal during the year the termloans have been applied by the company for purposes for which they were raised and thecompany has not raised monies by way of initial public offer or further public offer(including debt instruments).

x) According to the information and explanations given to us nomaterial fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the course of our audit.

xi) In our opinion and according to the information and explanationsgiven to us we are of the opinion that the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable.

xiii) According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the standalone Ind AS financialstatements as required by the applicable accounting standards.

xiv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.

xv) According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.

xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

For K.S. RAO & CO. For S. VISWANATHAN LLP.
Chartered Accountants Chartered Accountants
Firm Regn No: 003109S Firm Regn No: 004770S/S200025
M. KRISHNA CHAITHANYA CHELLA K. SRINIVASAN
Partner Partner
Membership No.231282 Membership No.023305
UDIN: 21231282AAAACC7519 UDIN: 21023305AAAADL1364
Place : Chennai
Date : 24th May 2021

Annexure - B to the Independent Auditors' Report

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

In conjunction with our audit of the Standalone Ind AS FinancialStatements of the Company as of and for the year ended March 312021 we have audited theinternal financial controls over financial reporting of The India Cements Limited("the Company") as of 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 tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was 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 auditor's 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 internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of Financial Statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting 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 authorizations of management and directors of thecompany; and

(3) Provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assetsthat could have a material 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 and to the best of our information and according to theexplanation given to us 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 31 March 2021 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 K.S. RAO & CO. For S. VISWANATHAN LLP.
Chartered Accountants Chartered Accountants
Firm Regn No: 003109S Firm Regn No: 004770S/S200025
M. KRISHNA CHAITHANYA CHELLA K. SRINIVASAN
Partner Partner
Membership No.231282 Membership No.023305
UDIN: 21231282AAAACC7519 UDIN: 21023305AAAADL1364
Place : Chennai
Date : 24th May 2021

ANNEXURE - i to the Independent Auditors' Report as mentioned inParagraph 3 (vii) (b) of CARO 2016

Sl. No. Nature of the Statue Nature of Dues Amount (Rs.) Period to which amount relates Forum where dispute is pending
1 Central Excise Act 1944 Excise Duty and Service tax 55993394 Various Periods from 1995-96 to 2009-10 Supreme Court
340724592 Various Periods from 1994-95 to 2017-18 High Court
1425862698 Various Periods from 2003-04 to 2017-18 CESTAT
30305548 Various Periods from 2001-02 to 2017-18 Commissioner / Commissioner (Appeals)
Sub Total 1852886232
2 Central Sales Tax Act 1956 and Sales Tax of Various States Sales Tax /VAT 25977554 2008-09 & 2013-14 Additional Commissioner (Rev. Petition)
312110509 Various pendings from 196970 to 2017-18 Appeal to High Court
555792 2013-142005-06 and 2007-08 Deputy Commissioner (Appeals)
755473 Various pendings from 2007-08 to 2015-16 Joint Commissioner (Appeals)
1400886 2005-06 Sales Tax Apellate Tribunal
8592433 2013-14 Commissioner (Appeals)
Sub Total 349392647
3 Customs Duty 1962 Customs Duty 642841243 2013-14 & 2014-15 & 2017-18 CESTAT
Sub Total 642841243
4 Income Tax Act 1961 Income Tax 81064938 1996-1997 Supreme Court
36383000 Various periods from 1982-83 to 1986-87 High Court
531000 1991-1992 Income Tax Apellate Tribunal
13810399 2015-2016 CIT Appeals
58297245 2016-2017 Deputy Commissioner of Income Tax
Sub Total 190086582
Grand Total 3035206704
For K.S. RAO & CO. For S. VISWANATHAN LLP.
Chartered Accountants Chartered Accountants
Firm Regn No: 003109S Firm Regn No: 004770S/S200025
M. KRISHNA CHAITHANYA CHELLA K. SRINIVASAN
Partner Partner
Membership No.231282 Membership No.023305
UDIN: 21231282AAAACC7519 UDIN: 21023305AAAADL1364
Place : Chennai
Date : 24th May 2021

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