You are here » Home » Companies » Company Overview » Mishra Dhatu Nigam Ltd

Mishra Dhatu Nigam Ltd.

BSE: 541195 Sector: Metals & Mining
NSE: MIDHANI ISIN Code: INE099Z01011
BSE 00:00 | 26 Oct 189.45 1.30
(0.69%)
OPEN

189.85

HIGH

192.00

LOW

189.20

NSE 00:00 | 26 Oct 189.75 0.90
(0.48%)
OPEN

189.20

HIGH

191.90

LOW

189.05

OPEN 189.85
PREVIOUS CLOSE 188.15
VOLUME 22018
52-Week high 221.80
52-Week low 172.90
P/E 19.08
Mkt Cap.(Rs cr) 3,549
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 189.85
CLOSE 188.15
VOLUME 22018
52-Week high 221.80
52-Week low 172.90
P/E 19.08
Mkt Cap.(Rs cr) 3,549
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mishra Dhatu Nigam Ltd. (MIDHANI) - Auditors Report

Company auditors report

To

The Members of

Mishra Dhatu Nigam Limited

Report on the Audit of the Standalone Financial Statements

We have issued an Independent Audit Report dated 30th June 2020 on the IndAS Standalone Financial Statements as adopted by Board of Directors on even date. Pursuantto observations of Comptroller and Auditor General of India under Section 143(6)(b)of The Companies Act 2013 Other Matter Paragraph has been included to comply with theabove observations.

Opinion

We have audited the accompanying standalone financial statements of Mishra DhatuNigam Limited (the "Company") which comprise the Balance Sheet as at March31 2020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand a summary of significant accounting policies and other explanatory information(hereinafter referred to as the "standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (the "Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2020 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

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 Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India ("ICAI") together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules made thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence obtained by us is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matter

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. The key audit matters that we have identified in thecurrent year are as follows:

The Key Audit matter How the matter was addressed in our audit
Revenue Recognition In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
Refer Accounting Policy Note No.2.3 and Note No. 28 to the standalone financial statements. 1. We assessed the appropriateness of the revenue recognition accounting policies by comparing with applicable accounting standards.
We identified revenue recognition as a key audit matter because the Company and its external stakeholders focus on revenue as a key performance indicator. This could create an incentive for revenue to be overstated or recognised before control has been transferred. The revenue standard establishes a comprehensive framework for determining whether how much and when revenue is recognized. This involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of identified performance obligation the appropriateness of the basis used to measure revenue recognition. 2. We evaluated the design of key controls and operating effectiveness of the relevant key controls with respect to revenue recognition on selected transactions.
3. We performed substantive testing by selecting samples of revenue transactions recorded during the year by testing the underlying documents using statistical sampling.
4. We carried out analytical procedures on revenue recognised during the year to identify unusual variances.
5. We have tested on sample basis whether revenue transactions near to the reporting data have been recognised in the appropriate period by comparing the transactions selected with relevant underlying documentation including goods delivery notes and the terms of sales. We have inspected the underlying documentation to verify that the control and ownership has been transferred to the customer.

Emphasis of Matter

We draw attention to the following matters in the Notes to the Standalone FinancialStatements: a) NoteNo.9(OtherNon-CurrentAssets)NoteNo.11 (Current Financial Assets TradeReceivables) Note No. 14 (Current Financial Assets - Others) Note No. 15 (Other CurrentAssets) Note No.

22 (Other Non-current Liabilities) Note No. 24 (Trade Payables) Note No. 25 (CurrentFinancial Liabilities Others) and Note No. 26 (Other Current Liabilities) to thestandalone Financial Statements are subject to receipt of confirmation ofbalances/reconciliation. b) We draw attention to Note No. 44 of the Standalone financialstatements in which the Company describes the impact arising from the COVID-19 Pandemic.

Our opinion on the Standalone Financial Statements is not modified in respect of theabove matters.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information contained in Directors' Report including AnnualReport on CSR Activities

Management Discussion & Analysis Report Business Responsibility Report Report onConservation of Energy Technology Absorption and Foreign Exchange Earnings and outgoReport on Corporate Governance annexed thereto Shareholder Information and otherinformation contained in Annual Report but does not include the standalone financialstatements and our report thereon. These reports are expected to be made available to usafter the date of this auditors' 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 ouraudit of the standalone financial statements our responsibility is to read the otherinformation identified above when it becomes available and in doing so consider whetherthe other information is materially inconsistent with the standalone financial statementsor our knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

When we read the other information if we conclude that there is material misstatementtherein we are required to communicate the matter to those charged with governance.

Management's Responsibilities for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith accounting principles generally accepted in India including the Ind AS specifiedunder Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended. 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 which have been used for the purposeof preparation of the standalone financial statements by the Directors of the Company asaforesaid. 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 Board of Directors are responsible for overseeing the Company's financial reportingprocess.

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

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

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

• 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 exists we are required to drawattention in our auditor's report to the related disclosures in the standalone financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue 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 business activities of the Company to express an opinion on the standalonefinancial statements. We are responsible for the direction supervision and performance ofthe audit of the standalone financial statements of such entity included in.

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 our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.

We communicate with those charged with governance of the Company regarding among othermatters 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 of the Company with a statement thatwe have 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 of the Company 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.

Other Matter

The Company had entered into a lease agreement dated 31st October 1991 with DefenceResearch and Development Organization (DRDO) wherein 35 acres and 39 guntas were leasedfor a period of 30 years at a nominal lease rental of ` 1 per acre per annum. As per thelease agreement the Company retains ownership rights of the land during the lease termand shall continue to be the owner after the expiry of lease term._The extent of landleased out is disclosed in Note Number 3.1 - Property Plant and Equipment in thestandalone financial statements. _However as per Ind AS 116 Leases this lease is in thenature of an Operating lease and the nature of lease should have been disclosed in thefinancial statements._ Given the materiality of lease rentals no lease transaction wasaccounted for or reported in the standalone financial statements and hence the nature oflease was not disclosed and no separate accounting policy on Leases was adopted by theCompany. Our opinion on the Standalone Financial Statements and our "Report on OtherLegal and Regulatory Requirements" below is not modified in respect of the abovematters with respect to disclosure on leases.

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 Section 143(11) of the Act we givein the Annexure "A" a Statement on the Matters specified in theParagraph 3 and 4 of the Order to the extent applicable.

2) As required by Section 143(3) of the Act based on our audit we report to theextent applicable that: a) We have sought and obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposesof our audit.

b) In our opinion proper books of accounts 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 standalone Balance Sheet the standalone Statement of Profit and Loss includingOther Comprehensive Income standalone Statement of Changes in Equity and the standaloneStatement of Cash Flows dealt with by this Report are in agreement with the relevant booksof accounts maintained for the purpose of preparation of the standalone financialstatements.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended.

e) As per Section 164(2) of the Act regarding disqualification of directors is notapplicable to the Company by virtue of Notification No. G.S.R. No.463(E) dated 05.06.2015Government companies are exempt from the applicability of the provisions of section 164(2)of the Act. Hence no comments offered.

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 "C". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.

g) As required by Section 143(5) of the Act we give in Annexure "D"a statement on the matters contained in directions issued by the Comptroller & AuditorGeneral of India the action taken thereon and its impact on the accounts and standalonefinancial statements of the company in terms of aforesaid section.

h) with respect to the other matters to be includedintheAuditor'sReportinaccordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinionand to the best of our information and according to the explanations given to us:

i. The Company have pending litigations the liabilities in respect of which is eitherprovided for or disclosed as contingent liabilities - Refer Note 41 of the Notes onaccounts to the standalone financial statements. The company has disclosed the impact ofthese pending litigations on the standalone financial position of the Company is subjectto their judicial outcome;

ii. The company did not have any long term contracts including Derivative Contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

for BASHA & NARASIMHAN Chartered Accountants Firm Registration No: 006031S

Sd/-(CA K. Narasimha Sah) Partner Membership No.201777 ICAI UDIN: 20201777AAAAAX5102

Place: Hyderabad Date: 27th August 2020

ANNEXURE - A

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT ON THE STANDALONE FINANCIAL STATEMENTS FORTHE YEAR ENDED 31ST MARCH 2020 OF MISHRA DHATU NIGAM LIMITED

(Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" of our report to Members of Mishra Dhatu Nigam Limited of even date) i.In respect of the Company's fixed assets: (a) The company has maintained proper recordsshowing full particulars including quantitative details and situation of fixed assets.

(b) The Company has a program of verification to cover all the items of fixed assetsin our opinion it is reasonable having regard to the size of the Company and the natureof its assets. As informed to us all the fixed assets have been physically verified bythe management during the year. According to the information and explanation given to usno material discrepancies were noticed on such verification. (c) According to theinformation and explanation given to us and on the basis of our examination of theconveyance deeds provided to us we report that the title deeds of immovable propertiesof land and buildings which are mentioned here under are not held in the name of theCompany as at the Balance sheet date.

Sl No. Particulars Land Details
1 Total Number of Cases i. Factory Area: 132 acres and 31 Guntas
ii. Corporate Office: 8.00 Acres
iii. Township Area: 97 Acres and 05 Guntas
iv. Under lease to DRDO & Others: 37 Acres and 39 Guntas.
2 Whether Freehold / Lease hold Free hold
3 Gross/ Net Block as on 31-03- 2020 of the above. ` 128.80 Lakhs
4 Remarks Conveyance Deed for 275 Acres and 35 Guntas of land acquired are yet to be executed in the name of the Company. Out of this 1.5 Acres land is under dispute on account of unauthorized occupancy by third party.

ii. According to the information and explanations given to us and based on ourexamination of records Physical verification of inventory has been conducted by themanagement under Perpetual Inventory Programme at reasonable intervals and for theInventories lying with the third parties at the year end written confirmations have beenobtained in few cases by the management. The discrepancies noticed on such physicalverification by the management have been properly dealt with in the books of account. Nomaterial discrepancies have been reported.

iii. According to the information and explanations given to us and based on ourexamination of records the company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered under section189 of the Act. Accordingly the clause 3(iii)(a) 3(iii)(b) and 3(iii)(c) of the Orderare not applicable to the Company. iv. According to the information and explanations givento us and based on our examination of records the provisions of section 185 and 186 ofthe Act are not applicable to the Company vide Notification GSR No.463(E)F.No.1/2/2014-CL.V dated 5th June 2015.

v. According to the information and explanations given to us and based on ourexamination of records the Company has not accepted any deposits during the year and doesnot have any unclaimed deposits as at 31st March 2020 and therefore theprovisions of the clause 3(v) are not applicable to the Company.

vi. We have broadly reviewed the cost records maintained by the Company as prescribedby the Central Government under sub-section (1) of Section 148 of the Act and are of theopinion that prima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of these records with a view to determinewhether they are accurate and complete. vii. According to the information and explanationsgiven to us and on the basis of examination of the records of the Company 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 TaxSales Tax Service Tax Customs Duty Excise Duty Value Added Tax Entry Tax Cess andother material statutory dues applicable to it with the appropriate authorities.

b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods and Service Tax Sales Tax Service Tax Customs DutyExcise Duty Value Added Tax Cess and other material statutory dues in arrears as at 31stMarch 2020 for a period of more than six months from the date they became payable. c)Details of disputed Statutory Dues of Sales Tax Value Added Tax Customs Duty ExciseDuty Entry Tax Service Tax Cess (as applicable) as at 31st March 2020 onaccount of disputes pending before appropriate authorities as given in Annexure –"B".

viii. According to the information and explanations given to us and on the basis ofexamination of the records of the Company the Company has not defaulted in repayment ofdues to any financial institution or bank or government during the year. The Company hasnot issued any debentures.

ix. According to the information and explanations given to us and on the basis ofexamination of the records of the Company the Company did not raise any money by way ofinitial public offer or further public offer (including debt instruments) during the year.However the Company has taken (unsecured) short term loan from Bank for meeting itsworking capital requirements and there are no overdues in the account towards interest andno principle is due for repayment during the year.

x. According to the information and explanations given to us and on the basis ofexamination of the records of the Company no material fraud by the company or on theCompany by its officers or employees has been noticed or reported during the year orinformed any such case by the management.

xi. In our Opinion and according to the information and explanations given to usProvision of Section 197 are not applicable to Government companies vide notification no.G.S.R. 463(E) F.No.1/2/2014-CL.V dated 5th June 2015 issued by the CentralGovernment therefore the provisions of clause 3(xi) of the order are not applicable tothe Company.

xii. The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable to the Company. xiii. According to the information andexplanations given to us and on the basis of examination of the records of the Companyall transactions with the related parties are in compliance with section 177 and 188 ofthe Act where applicable and the details have been disclosed in the Standalone FinancialStatements etc. as required by the applicable accounting standards.

xiv. According to the information and explanations given 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 and hence reporting under clause 3(xiv) of the Order is notapplicable to the Company.

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 its Directors or persons connected to its directors and hence reportingunder clause 3(xv) of the Order is not applicable to the Company.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 and hence reporting under clause 3(xvi) of the Order is notapplicable. for BASHA & NARASIMHAN Chartered Accountants Firm Registration No:006031S

Sd/-(CA K. Narasimha Sah) Partner Membership No.201777 ICAI UDIN: 20201777AAAAAX5102

Place: Hyderabad Date: 27th August 2020

ANNEXURE - B

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT ON THE STANDALONE FINANCIAL STATEMENTS FORTHE YEAR ENDED 31ST MARCH 2020 OF MISHRA DHATU NIGAM LIMITED

(Referred to in paragraph vii(c) of Annexure A a statement on the matters specified inthe Companies (Auditor's Report) Order 2016 (as amended) of the Company for the yearended on 31st March 2020)

According to the records of the company dues on account of any dispute with respect toSales Tax Value Added Tax Customs Duty Excise Duty Service Tax Entry Tax Cess andthe particulars are furnished below:

Name of the Statue Nature of Dues Disputed Amount Paid under Protest Balance Period to which the amount relates Forum where dispute is pending
CST Act 1956 CST 165.66 82.83 82.83 2010-11 VAT Tribunal
VAT Act 2005 VAT 3.80 0.95 2.85 2010-11

Appellate Deputy Commissioner

CST Act 1956 CST 2.30 2.07 0.23 2011-12

Appellate Deputy Commissioner

VAT Act 2005 VAT 178.58 22.32 156.26 02/2014 to 06/2017 Appellate Deputy Commissioner
AP Entry Tax Act 2001 Entry Tax 21.03 7.36 13.67 2013-14 & 2014-15 Appellate Deputy Commissioner
Customs Act 1962 Customs Duty & Penalty 106.20 - 106.20 2011-12 CESTAT
Central Excise Tariff Act 1985 Excise Duty & Penalty 225.97 - 225.97 2006-07 to 2008-09 Comm. of Customs Central Excise & Service Tax
Central Excise Tariff Act 1985 Duty on account of non-reversal of ITC for material sent on job work 130.04 4.12 125.92 2012-13 & 2013-14 Comm. of Customs Central Excise & Service Tax
Finance Act 1994 Service Tax on LD received from 154.20 7.71 146.49 07/2012 to 03/2016

CESTAT

Finance Act 1994 Vendors Service Tax on LD received from 33.21 3.32 29.89 2016-17 Comm. Of Customs Central Excise & Service
CST Act 1956 Vendors Demand for CST 2.71 0.34 2.37 2015-16 Tax Appelate Deputy Commissioner
CST Act 1956 Demand for CST 68.74 8.59 60.15 2016-17

Appelate Deputy Commissioner

Total 1092.44 139.61 952.83

ANNEXURE - C

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT ON THE STANDALONE FINANCIAL STATEMENTS FORTHE YEAR ENDED 31ST MARCH 2020 OF MISHRA DHATU NIGAM LIMITED

(Referred to in paragraph 2(f) under "Report on Other Legal and RegulatoryRequirements" of our report to Members of Mishra Dhatu Nigam Limited of even date)Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of theCompany as of 31st March 2020 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 Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. 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 of reliablefinancial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting("the Guidance Note") issued by ICAI and the Standards on Auditing prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls.

Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch controls operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting including obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Standalone Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that

(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Standalone Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with 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 Standalone 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 explanation givento us the Company has in all material respects an adequate internal financial controlsover financial reporting and such internal financial controls over financial reportingwere operating effectively as on 31st March 2020 based on the internalcontrol over financial reporting criteria established by the company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

BASHA & NARASIMHAN Chartered Accountants Firm Registration No: 006031S

Sd/-(CA K. Narasimha Sah) Partner Membership No.201777 ICAI UDIN: 20201777AAAAAX5102

Place: Hyderabad Date: 27th August 2020

ANNEXURE - D

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT ON THE STANDALONE FINANCIAL STATEMENTS FORTHE YEAR ENDED 31ST MARCH 2020 OF MISHRA DHATU NIGAM LIMITED

(Referred to in paragraph 2(g) under "Report on Other Legal and RegulatoryRequirements" of our report to Members of Mishra Dhatu Nigam Limited of even date)Report on the directions under sub-section 5 of Section 143 of the Act issued by theComptroller and Auditor General of India:

Sl. No. Directions u/s. 143(5) of the Companies Act 2013 Auditor's Reply on action taken on the directions Impact
1. Whether the company has system in place to process all the accounting transactions through IT system? If yes the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications if any may be stated Company is using Oracle ERP software to record all business and financial transactions including Purchase Accounting Sales Accounting Inventory transactions Production transactions Accounts Payable Accounts Receivable Fixed Assets Payroll Oracle Process Manufacturing and General Ledger and all the modules are integrated with one another.
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 the company's inability to repay the loan? If yes the financial impact may be stated The software itself has built in checks and validations between inter related modules thus the data accuracy and NIL integrity is maintained. All payment approvals are processed using the approval hierarchy defined in Oracle Module. All the accounting transactions are processed and the Trial Balance is generated from Oracle based ERP System. In view of the above we confirm that no financial transactions are carried out outside IT systems and hence there is no financial implication on the integrity of the accounts during the Financial Year 2019-20.
According to the information and explanation furnished to us and based on our examination of books we are of the opinion that there is no restructuring of an existing loan or cases NIL of waiver / write-off of debts / loans/ interest etc made by a lender to the company during the financial year 2019-20.
3. Whether funds received / receivable for specific schemes from central/state agencies were properly accounted for/ utilized as per its term and conditions? List the cases of deviation Based on the examination of the books and records of the company during the Financial Year 2019-20: Grant of `.6.00 Crores from Ministry of Steel for promotion of Research & Development. Under this initiative it is decided NIL by the company to establish a new Vacuum Induction Melting Furnace and the work is in progress. The grants are accounted as per Ind AS 20 and as per the Accounting Policy No.2.23.

for BASHA & NARASIMHAN Chartered Accountants Firm Registration No: 006031S

Sd/-(CA K. Narasimha Sah) Partner Membership No.201777 ICAI UDIN: 20201777AAAAAX5102

Place: Hyderabad Date: 27th August 2020

.