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Larsen & Toubro Ltd.

BSE: 500510 Sector: Engineering
NSE: LT ISIN Code: INE018A01030
BSE 00:00 | 24 Jan 1899.85 -54.70
(-2.80%)
OPEN

1954.00

HIGH

1957.25

LOW

1881.95

NSE 00:00 | 24 Jan 1899.90 -56.15
(-2.87%)
OPEN

1955.00

HIGH

1959.00

LOW

1881.55

OPEN 1954.00
PREVIOUS CLOSE 1954.55
VOLUME 52783
52-Week high 2078.20
52-Week low 1306.40
P/E 38.90
Mkt Cap.(Rs cr) 266,900
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1954.00
CLOSE 1954.55
VOLUME 52783
52-Week high 2078.20
52-Week low 1306.40
P/E 38.90
Mkt Cap.(Rs cr) 266,900
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Larsen & Toubro Ltd. (LT) - Auditors Report

Company auditors report

TO THE MEMBERS OF LARSEN & TOUBRO LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Larsen & ToubroLimited (the "Company") which comprise the Balance Sheet as at 31 March 2021and the Statement of Profit and Loss (including Other Comprehensive Income) the Statementof Cash Flows and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information whichincludes 31 joint operations accounted on proportionate basis.

In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of report of the other auditor on separatefinancial statements of the joint operation referred to in the Other Matters sectionbelow the aforesaid standalone financial statements give the information required by theCompanies Act 2013 (the "Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and its profit total comprehensiveincome its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing ("SA"s) specified under section 143(10) of the CompaniesAct 2013 (the "Act"). Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibility for the Audit of the Standalone FinancialStatements section of our report.

We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India ("ICAI") together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us and the audit evidence obtainedby the other auditors in terms of their reports referred to in the Other Matters sectionbelow is sufficient and appropriate to provide a basis for our audit opinion on thestandalone financial statements.

Key Audit Matters

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.

Revenue recognition – accounting for construction contracts
Key audit matter description As described in Note No. 1(ii)(e) of the standalone financial statements the Company recognises revenue from contracts with customers when it satisfies its performance obligations. There are significant accounting judgements in estimating revenue to be recognised on contracts with customers including estimation of costs to complete and determining the timing of revenue recognition.
The Company recognises revenue on the basis of stage of completion in proportion of the contract costs incurred at balance sheet date relative to the total estimated costs of the contract at completion. The recognition of revenue is therefore dependent on estimates in relation to total estimated costs of each such contract.
Significant judgements are also involved in determining the expected losses when such losses become probable based on the expected total contract cost.
Cost contingencies are included in these estimates to take into account specific risks of uncertainties or disputed claims against the Company arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the life of the contract and adjusted where appropriate.
The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the recovery of such consideration is highly probable.
Principal Audit Procedures Our audit procedures related to the (1) identification of distinct performance obligations (2) evaluation of the process for estimation of costs to complete (3) evaluation of implications of change orders on costs estimates of costs to complete and revenue and (4) evaluation of any variable consideration included the following amongst others:
1. We tested the effectiveness of controls relating to the (a) evaluation of performance obligations and identification of those that are distinct; (b) estimation of costs to complete each of the performance obligations including the contingencies in respect thereof as work progresses and the impact thereon as a consequence of change orders; (c) the impact of change orders on the transaction price of the related contracts; and (d) evaluation of the impact of variable consideration on the transaction price.
2. We selected a sample of contracts with customers and performed the following procedures:
a. Obtained and read contract documents for each selection change orders and other documents that were part of the agreement.
b. Identified significant terms and deliverables in the contract to assess management's conclusions regarding the (i) identification of distinct performance obligations; (ii) changes to costs to complete as work progresses and as a consequence of change orders; (iii) the impact of change orders on the transaction price; and (iv) the evaluation of the adjustment to the transaction price on account of variable consideration.
c. Compared costs incurred with Company's estimates of costs incurred to date to identify significant variations and evaluated whether those variations have been considered appropriately in estimating the remaining costs to complete the contract.
d. Tested the estimate for consistency with the status of delivery of milestones and customer acceptance to identify possible delays in achieving milestones which require changes in estimated costs or efforts to complete the remaining performance obligation.
Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices.
Key audit matter description The Company in its contract with customers promises to transfer distinct services to its customers which may be rendered in the form of engineering procurement and construction (EPC) services through design-build contracts and other forms of construction contracts. The recognition of revenue is based on contractual terms which could be based on agreed unit price or lump-sum revenue arrangements. At each reporting date revenue is accrued for costs incurred against work performed that may not have been invoiced.
Identifying whether the Company's performance has resulted in a service that would be billable and collectable where the works carried out have not been acknowledged by customers as of the reporting date or in the case of certain defence contracts where the evidence of work carried out and cost incurred are covered by confidentiality arrangements involves a significant amount of judgement.
Assessing the recoverability of contract assets related to overdue milestones and amounts overdue against invoices raised which have remained unsettled for a significantly long period after the end of the contractual credit period also involves a significant amount of judgement.
Refer to Note Nos. 1(ii)(e) and 1(ii)(m) to the standalone financial statements.
Principal Audit Procedures Our audit procedures related to the (1) evaluation of evidence supporting the execution of work; (2) evaluation of recoverability of the overdue amounts including the impact on the expected credit loss allowance; and (3) assessment of adjusting events after the reporting date i.e. March 31 2021 and the date when the financial statements are approved by the Parent's Board of Directors included the following amongst others:
1. We tested the effectiveness of controls relating to the (a) gathering and evaluation of evidence supporting the execution of work; (b) evaluation of recoverability of the overdue amounts including the impact on the expected credit loss allowance; and (c) assessment of adjusting events after the reporting date i.e. March 31 2021 and the date when the financial statements are approved by the Board of Directors and the impact thereof on the carrying amount of the related contract assets.

Measurement of contract assets in respect of overdue milestones and receivables inrespect of overdue invoices.

2. We selected a sample of contracts assets with corresponding trade receivables thatwere overdue and evaluated the basis for management's conclusions regarding the (1)evidence supporting the execution of work for which the contract assets were recognised;(2) reasons for the delays in recovery of invoices and the basis on which recoverabilityof the contract assets was assessed; (3) impact on the allowance for expected creditlosses; and (4) adjusting events after the reporting date i.e. March 31 2021 and the datewhen the financial statements are approved by the Board of Directors and the impactthereof on the carrying amount of the related contract assets.

3. We compared previous estimates relating to recoverability of contract assets andcompared it with actual collections during the year.

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

The respective Board of Directors of the Company and its Joint Operations areresponsible for the preparation of other information. The other information comprise theinformation included in the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the standalone financial statements andour report.

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 materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Financial 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 including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Ind AS and other accountingprinciples 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 management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Company's Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibility 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 inaccordance with SAs we exercise professional judgment and maintain professionalscepticism 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 of internalcontrol.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany 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 the 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.

• Obtain sufficient appropriate audit evidence regarding the financial informationof the Company and its joint operations to express an opinion on the standalone financialstatements. We are responsible for the direction supervision and performance of the auditof the financial statements of such entities included in the standalone financialstatements of which we are the independent auditors. For the other entities included inthe standalone financial statements which have been audited by the other auditors suchother auditors remain responsible for the direction supervision and performance of theaudits carried out by them. We remain solely responsible for our audit opinion.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

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.

Other Matter

(a) We did not audit the financial information of 30 joint operations included in thestandalone financial statements whose financial information reflect total assets of R 3839.10crore as at 31st March 2021 total revenues of R 3129.20 crore total net lossafter tax (net) of R 287.32 crore total comprehensive loss (net) of R 287.32crore and net cash inflows (net) of R 71.01 crore for the year ended 31st March2021 respectively as considered in the standalone financial statements. The financialinformation of these joint operations have been audited by the other auditors whosereports have been furnished to us and our opinion in so far as it relates to the amountsand disclosures included in respect of these joint operations is based solely on thereports of such other auditors and the procedures performed by us as stated underAuditor's Responsibilities section above.

Our report on the standalone financial statements is not modified in respect of theabove matters with respect to our reliance on the work done and the reports of the otherauditors.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit 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.

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and the reports of theother auditors.

c. The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

d. In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164(2) of the Act.

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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

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

h. In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

i. 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts; and

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

2. As required by the Companies (Auditor's Report) Order 2016 (the "Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm‘s Registration No.117366W/W-100018)

SANjIv v. PILgAONKAR

Partner

(Membership No. 39826)

UDIN: 21039826AAAAEI1765

Place: Mumbai

Date: May 14 2021

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under "Report on Other Legal and RegulatoryRequirements" section of our report of even date)

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

We have audited the internal financial controls over financial reporting of Larsen andToubro Limited (the "Company") as of March 31 2021 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat date which includes internal financial controls over financial reporting of one ofthe Company's 31 joint operations which is a company incorporated in India.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued 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 respective 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company and its joint operations companyincorporated in India based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the ICAI and the Standards on Auditing("SA"s) prescribed under Section 143(10) of the Companies Act 2013 (the"Act") to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained bythe other auditor of the joint operations which is a company incorporated in India interms of their reports referred to in the Other Matters paragraph below 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 a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material 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 to the best of our information and according to the explanations givento us and based on the consideration of the reports of the other auditor on internalfinancial controls system over financial reporting of the joint operation referred to inthe Other Matters paragraph below 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 criteria for internal financial control over financial reporting established by therespective Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.

Other Matters

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls over financial reporting insofar as itrelates to one joint operation which is a company incorporated in India is based on thecorresponding reports of the other auditor of such company incorporated in India.

Our opinion is not modified in respect of this matter.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm‘s Registration No.117366W/W-100018)

SANJIV V. PILGAONKAR

Partner

(Membership No. 39826)

UDIN: 21039826AAAAEI1765

Place: Mumbai

Date: May 14 2021

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Larsen & Toubro Limited of evendate)

(i) In respect of the Company's property plant and equipment:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

(b) The Company has a program of physical verification of its property plant andequipment to cover all the items of property plant and equipment in a phased manner overa period of 3 years which in our opinion is reasonable having regard to the size of theCompany and the nature of its property plant and equipment. Pursuant to the programcertain property plant and equipment were physically verified by the Management duringthe year. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.

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

Rs crore

Type of asset Total no. of cases Leasehold/ Freehold gross block as at March 31 2021 Net block as at March 31 2021 Remarks
Land 2 Freehold 1.14 1.14 Conveyance deed pending for execution as the matter is sub judice.
Building 1 Freehold 0.15 0.12

In respect of immovable properties of land and buildings that have been taken on leaseand disclosed as property plant and equipment in the financial statements the leaseagreements are in the name of the Company where the Company is the lessee in theagreement.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification between the physical stock and the books of accounts.

(iii) According to the information and explanations given to us during the year endedMarch 31 2021 the Company has not granted any loans secured or unsecured to companiesfirms limited liability partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 (the "Act").

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act to the extentapplicable in respect of grant of loans making investments and providing guarantees andsecurities during the year as applicable.

(v) The Company has not accepted any deposits during the year ended March 31 2021 anddoes not have any unclaimed deposits as of that date. Therefore reporting under clause3(v) of the Order is not applicable.

(vi) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Act. We have broadly reviewed the cost records maintained during theyear by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014 asamended and prescribed by the Central Government under sub-section (1) of Section 148 ofthe Act and are of the opinion that prima facie the prescribed cost records have beenmade and maintained by the company. We have however not made a detailed examination ofthe cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Goods and Service TaxCustoms Duty and corresponding cess and other material statutory dues applicable to it tothe appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Goods and Service Tax Customs Duty cess and other materialstatutory dues in arrears as at March 31 2021 for a period of more than six months fromthe date they became payable.

(c) Details of dues of Income-tax Sales Tax Service Tax Customs Duty Excise DutyGoods and Service Tax and Value Added Tax which have not been deposited as on March 312021 on account of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is Pending Period to which amount relates Amount Involved Amount Unpaid
(R crore) (R crore)
The Central Excise Act1944 Dispute regarding questions of law classification dispute and other matters High Court 1999-00 to 2012-13 105.27 103.53
Service Tax under Finance Act 1994 and Customs Act 1962 Disallowance of CENVAT credit short payment of service tax Valuation disputes dispute regarding classification of services/ goods disallowances of excise duty exemption Non Maintenance of Separate Books of Accounts Export rebate disallowance and other matters. CESTAT 1991-92 2001-02 to 2016-17 326.67 320.54
Disallowance of CENVAT credit short payment of service tax pending forms service tax rate dispute valuation dispute and other matters Commissioner 2006-07 2008-09 to 3.46 3.34
(Appeal) 2011-12 2014-15 to 2017-18
Disallowance of CENVAT credit short payment of service tax pending forms service tax rate dispute valuation dispute and other matters Deputy Commissioner 2014-15 to 2017-18 0.25 0.25
The Central Sales Tax Act Entry tax Local Differential Custom Duty Taxability of sub- contractor turnover rate of tax for declared goods disallowance of labour turnover and non- submission of forms DGFT 2016-17 1.05 0.79
Supreme Court 2000-01 to 2006-07 2009-10 to 2012-13 503.40 494.36
Sales Tax Act Works Dispute regarding questions of law classification dispute local VAT and Works contract disputes. High Court 1986-87 1987-88 1993-94 1994-95 1997-98 to 2008-09 2010-11 to 2012-13 and 2015-16 61.58 55.40
Contract Tax Act and Goods & Services Tax Act Non submission of Forms classification disputes inter-state sale turnover Rate of tax of declared goods Labour & service charges disallowed Disallowance of exemptions claimed for imports & Sales in transit Sale mismatch & levy of tax on import of goods through Way bill Road permit issue and other Sales Tax/VAT 1989-90 1991-92 529.58 446.25
Tribunal 1994-2018
Dispute regarding questions of law classification dispute sales in transit high sea sales non-submission of C forms & E1 forms disallowance of ITC valuation of goods and other matters Commissioner (Appeal) 1996-97 1999-00 to 2017-18 3101.69 3000.83
The Central Dispute regarding questions of law classification dispute sales in transit high sea sales non-submission of C forms & E1 forms disallowance of ITC valuation of goods and other matters Commissioner 2004-05 to 2016-17 3.38 3.37
Sales Tax Additional Commissioner (Appeal) 2007-2008 2010-11 to 2017-18 3.56 3.56
Act Entry
tax Local Sales Tax
Additional 1999-00 and 2001-02 0.10 0.10
Act Works
Commissioner
Contract
Joint 2007-08 2008-09 1.08 1.08
Tax Act and
Commissioner
Goods &
Services Tax Joint Commissioner (Appeal) 1995-96 to 2016-17 260.06 198.86
Act
Additional Deputy Commissioner (Appeals) 2012-13 0.50 0.34
Deputy Commissioner 2012-13 7.17 3.82
Deputy Commissioner (Appeals) 2006-07 2008-09 to 2017-18 18.71 16.66
Assistant Commissioner 1996-97 to 1998-99 2001-02 to 2004-05 2007-08 to 2009-10 2015-16 to 2017-18 1.17 1.10
Assistant Commissioner (Appeal) 2010-11 to 2017-18 388.25 361.79
Deputy Excise & Taxation Commissioner 2012-13 to 2013-14 69.28 56.92
Special Objection Hearing Authority 2012-13 to 2015-16 0.58 0.56
State Revenue Board 2011-2012 2.02 0.68
Assessing Officer 2001-02 to 2003-04 2005-06 2007-08 to 2010-11 2012-13 to 2017-18 7.75 7.03
Goods and Services Tax Act Disallowance of credits claimed in Tran-1 Assistant Joint Commissioner 2017-18 16.25 14.86
Disallowance of Input Tax Credit Commissioner (Appeals) 2018-19 0.08 0.07
Income Tax Act 1961 Demand arising out of Regular assessment/Reassessment ITAT 2004-05 & 2009-10 to 2012-2013 719.86 256.16
Demand arising out of Regular Assessment/Reassessment CIT(A) 2014-15 to 2016-17 1248.37 1124.16

(viii) In our opinion and according to the information and explanations given to usduring the year the Company has not defaulted in the repayment of loans or borrowings tofinancial institutions banks and dues to debenture holders. The Company has not borrowedany funds from the government during the year.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans. Therefore reporting under paragraph3(ix) of the Order is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no material fraud by the Company and no material fraud on the Company by itsofficers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to usduring the year the Company has paid / provided managerial remuneration in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV to the Act.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Therefore reporting under paragraph 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Act where applicable forall transactions with related parties undertaken during the year and the details of suchrelated party transactions have been disclosed in the financial statements as required bythe applicable accounting standards.

(xiv) According to the information and explanations given to us during the year theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures. Therefore reporting under paragraph 3 (xiv) of the Orderis not applicable to the Company.

(xv) According to the information and explanations given to us during the year endedMarch 31 2021 the Company has not entered into any non-cash transactions with itsdirectors or persons connected with any of them.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm's Registration No.117366W/W-100018)

SANjIv v. PILgAONKAR

(Partner)

(Membership No. 39826)

UDIN: 21039826AAAAEI1765

Place: Mumbai

Date: May 14 2021

.