To the Members of
National Aluminium Company Limited
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of NationalAluminium Company Limited ("the Company") which comprise the Balance Sheet asat 31st March 2021 and the Statement of Profit and Loss (including othercomprehensive income) Statement of Changes in Equity and Statement of Cash Flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as the"financial statements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 (Ind AS) prescribedunder section 133 of the Companies Act 2013 read with the Companies (Indian AccountingStandards) Rules 2015 as amended and accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31st March 2021 and its profitand other comprehensive income changes in equity and its cash flows for the year ended onthat date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. The key audit matters that we have identified in the current year are asfollows:
|Key Audit Matter ||How the matter was addressed in our audit |
|1. Carrying value of property plant and equipment including intangible assets and capital work-in-progress || |
|Property plant and equipment totalling Rs. 7317.28 crore (201920 : Rs. 7174.54 crore) as disclosed in Note 5A capital work-inprogress (Note 6) Rs. 1431.06 crore (2019-20 : Rs. 1177.16 crore) and intangible assets (Note 7) totalling Rs. 343.18 crore (2019-20 : Rs. 310.23 crore) represent significant balances recorded in the statement of financial position. ||Our audit procedures relating to the carrying value of property plant and equipment including intangible assets and capital work-in-progress included the following: |
| || We evaluated the assumptions made by management in the determination of carrying values and useful lives to ensure that these are consistent with the principles of Indian Accounting Standards (Ind AS) 16 Property Plant and Equipment and Ind AS 38 Intangible Assets. |
| || We assessed whether the carrying values and the useful lives were reasonable by challenging management's judgements through comparing the useful lives prescribed in Schedule II to the Companies Act 2013 and the useful lives of certain assets as per the technical assessment of the management. |
|The Company describes the significant accounting policies in respect of property plant and equipment capital work-inprogress and intangible assets in Note 3.4 3.5 & 3.6. The evaluation of the recoverable amount of these assets requires significant judgement in determining the key assumptions supporting the expected future cash flows of the business and the utilisation of the relevant assets. || |
| || We compared the useful lives of each class of asset in the current year to the prior year to determine whether there were any significant changes in the useful lives of assets and considered the reasonableness of changes based on our knowledge of the business and the industry. |
| || We assessed whether indicators of impairment existed as at 31st March 2021 based on our knowledge of the business and the industry. |
|There are a number of areas where management judgement impacts the carrying value of property plant and equipment intangible assets and their respective depreciation profiles. These include the decision to capitalise or expense costs; the asset life review including the impact of changes in the Company's strategy; and the timeliness of capitalisation determination or the measurement and recognition criteria for assets retired from active use. || |
| || We tested the controls in place over the property plant and equipment and intangible assets evaluated the appropriateness of capitalisation policies performed tests of details on costs capitalised and assessed the timeliness of capitalisation including decapitalisation of assets retired from active use and the application of the asset life. |
| || In performing these substantive procedures we assessed the judgements made by management including the nature of underlying costs capitalised; the appropriateness of asset lives applied in the calculation of depreciation and amortisation; and in assessing the need for accelerated depreciation/amortisation if required in the context of impairment. |
| ||Based on the above procedures we found management's assessment in determining the carrying value of the property plant and equipment and intangible assets are to be reasonable. |
|2.Valuation of employees' defined benefit obligations and other long-term benefits || |
|The Company has recognised long-term employee benefit liabilities of Rs. 475-38 crore (2019-20 : Rs. 471.20 crore) and defined benefit obligations (net of plan asset against funded gratuity obligation) of Rs. 207-81 crore (2019-20 : Rs. 239-76 crore) and described them in Note 3-16 (Significant Accounting Policies) and Notes 22 and 31 (long-term and post-employment benefits). ||Our audit procedures relating to the valuation of employees defined benefit obligations and other long-term benefits included the following: |
| || In testing the valuation we have examined the reports of external actuarial specialists to review the key actuarial assumptions used both financial and demographic and considered the methodology utilised to derive these assumptions- |
| || We evaluated the assumptions made by management and the actuary to ensure that these are consistent with the principles of Ind AS 19- |
|The valuation of employee benefit obligations is dependent on market conditions and assumptions made. The key audit matter specifically relates to the following key assumptions like discount rate inflation expectations and life expectancy assumptions- The setting of these assumptions is complex and requires the exercise of significant management judgement with the support of third party actuary- || |
| || Furthermore we have examined the sensitivity analysis on the key assumptions in valuing the defined benefit obligations- |
| ||Based on the above procedures we are satisfied that the methodology and assumptions applied in relation to determining the liabilities are acceptable- |
|3. Ascertainment disclosure and provisioning in respect of contingent liabilities || |
|As described in Note 4-2-5 (Provisions and Contingent Liabilities) the Company disclosed in Note 25 contingent liabilities of Rs. 2153-49 crore (2019-20 : Rs. 2561-82 crore)- The Company has material uncertain tax matters both direct and indirect under dispute involving aggregate demand of Rs. 1220-94 crore (2019-20 : Rs. 1602-70 crore) which require significant judgment to determine the possible outcome of these disputes- ||Our audit procedures relating to the ascertainment disclosure and provisioning in respect of contingent liabilities included the following: |
| ||We obtained a detailed understanding and evaluated the design and implementation of controls that the Company has established in relation to disclosure and provisioning of contingent liabilities in accordance to Ind AS 37 Provisions Contingent Liability and Contingent Assets- Regarding direct and indirect tax contingent liabilities we undertook following principal audit procedures: |
| || Assessment of the process and relevant controls implemented to identify tax litigations and pending administrative proceedings- |
|Additionally the Company has other on-going legal matters relating to various claims by the Government of Odisha or other agencies constituted by the State Government and by contractors/suppliers involving an aggregate demand of Rs. 932-55 crore (2019-20: Rs. 959-13 crore) which require application of management judgement in order to determine the likely outcome- || |
| || Assessment of assumptions used in the evaluation of potential tax risks performed by the tax department of the Company considering the legal precedence and other rulings in similar cases- |
| || Discussion with the management regarding the status of the most significant disputes and inspection of the key relevant documentation- |
| || Analysis of opinion received from tax experts where available- |
| || Review of the adequacy of the disclosures in the notes to the financial statements- |
| ||In assessing the potential exposures of the Company in respect of other contingent liabilities we have: |
| || assessed the design and implementation of controls in relation to the monitoring of known exposures; |
| || referred Board and other meeting minutes to identify areas subject to Company consideration; |
| || consulted with the Company's internal legal advisors in understanding on-going and potential legal matters impacting the Company; reviewed available legal opinions from experts; and |
| || reviewed the proposed accounting and disclosure of actual and potential legal liabilities- |
| ||Based on the above procedures performed we opined as a whole that the accounting and disclosures in relation to the on-going legal matters are appropriate- |
|4. Advances and deposits in respect of tax matters under litigation continuing as assets || |
|As at 31st March 2021 other assets (Note 14) includes recoverable claims of direct and indirect tax deposits (net of provision) including VAT and Cenvat credits amounting to Rs. 573-47 crore (2019-20 : Rs. 570-28 crore) which are pending adjustment/adjudication- Significant judgement is required in assessing the nature of these exposures and their accounting and disclosure requirements- ||Our audit procedures relating to the advance and deposits in respect of tax matters under litigation continuing as assets included the following: |
| || We obtained from management details of completed tax assessments and demands and appeal orders of the appellate authority- |
| || We involved our internal experts to challenge the management's underlying assumptions in estimating the tax liability and the possible outcome of the disputes- |
| || Our internal experts also considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions- |
| || Additionally we have considered opinions of legal and tax experts wherever available to review the nature of the amounts recoverable the sustainability and the likelihood of recoverability upon final resolution- |
| ||Based on the above procedures performed we are in agreement with the management's determination of the claim amount considered recoverable- |
|5. Valuation of deferred tax assets and liabilities || |
|The Company has disclosed in Note 23 deferred tax liability (net of deferred tax asset) as on 31st March 2021 Rs. 893-72 crore (2019-20 : Rs. 1060.61 crore). ||Our audit procedures relating to the advance and deposits in respect of tax matters under litigation continuing as assets included the following: |
| || Ascertained the completeness and accuracy of the deferred tax assets/liabilities and recognizing uncertain tax positions. |
|The Company operates in activities which involves application of multiple income tax provisions. || |
| || We challenged and tested the Management's assessment of the recoverability of the deferred tax assets and the probability of future cash outflows in respect deferred tax liabilities identified by the Company. |
|The assessment of the valuation of deferred tax assets/liability resulting from timing differences and provisions for uncertain tax positions is significant to our audit as the calculations are complex and depend on sensitive and judgmental assumptions. These include amongst others long-term future profitability and local fiscal regulations and developments. || |
| || We also assessed the applicable local fiscal regulations and developments in particular those related to changes in the statutory income tax rate and of the statutes of limitation as these are key assumptions underlying the valuation of the deferred tax assets/liabilities. |
| || We analysed the tax positions and evaluated the assumptions and methodologies used by the Company. |
| || In addition we also focused on the adequacy of the Company's disclosures as per Ind AS 12 Income Taxes on deferred tax assets/liabilities and assumptions used. |
| ||Based on the above procedures performed we are satisfied that the methodology and assumptions applied in relation to determining the deferred tax assets and liabilities are acceptable. |
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information contained in theCompany's Annual Report but does not include the financial statements and our reportthereon. These reports are expected to be made available to us after the date of thisauditors' report.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information mentioned and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the other information if we conclude that there ismaterial misstatement therein we are required to communicate the matter to those chargedwith governance and take appropriate action if required.
Management's Responsibility for the 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 and presentation ofthese financial statements that give a true and fair view of the financial positionfinancial performance (including other comprehensive income) changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Accounting Standards (Ind AS) specified under section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate implementation and maintenance of accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the FinancialStatements
Our objectives are to obtain reasonable assurance about whether thefinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
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 thefinancial 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 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. 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 thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions events in a 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 financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the Annexure "A" to thisreport a statement on the matters specified in paragraphs 3 and 4 of the Order to theextent applicable.
2. In compliance to directions of the Comptroller and Auditor Generalof India u/s. 143(5) of the Act we give in Annexure "B" to this report astatement on the matters specified therein.
3. 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 havebeen kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss (includingOther Comprehensive Income) Statement of changes in Equity and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.
(e) Section 164(2) of the Act regarding disqualification of directorsis not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated05.06.2015 issued by the Ministry of Corporate Affairs Government of India.
(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure "C".
(g) With respect to the other matters to be included in theAuditors' Report in accordance with the requirements of section 197(16) of the Actas amended:
The provision of section 197 read with Schedule V of the Act relatingto managerial remuneration is not applicable to the Company by virtue of Notification No.G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs Govt. ofIndia.
(h) 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 in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has pending litigations the liabilities in respect ofwhich is either provided for or disclosed as contingent liabilities - Refer Note 25 to thefinancial statements.
ii. The Company has made provision as required under the applicablelaw or Indian accounting standards for material foreseeable losses if any long termcontracts including derivative contracts.
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT ON STANDALONEFINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2021 OF NATIONAL ALUMINIUMCOMPANY LIMITED
(Referred to in paragraph 1 under the heading of "Report on OtherLegal and Regulatory Requirements" of our Report of even date)
i. (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) All movable assets of the Company are physically verified by themanagement every year. The frequency of verification in our opinion is reasonable. Nomaterial discrepancies were noticed on such verification conducted during the year.
Non-movable assets have been physically verified by the management atan interval of three years which in our opinion is reasonable having regard to the sizeand nature of assets of the Company.
No material discrepancies between book records and physical assets havebeen noticed.
(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company. Out of 8047.26 acres of freehold land and11004.06 acres of leasehold land held by the Company title/lease deeds in respect of64.15 acres of freehold and 1697.71 acres of leasehold land are pending execution of titledocuments in favour of the company. However the Company has been permitted by theconcerned authorities to carry on its operation on the said land Registration formalitiesin respect of office space for 6459 sft. in Kolkata is also not completed. (Refer Note5.A)
ii. Inventories except stocks relating to stocks-in-transit have beenphysically verified during the year by the management for this purpose. The frequency ofverification is reasonable. The discrepancies noticed on physical verification betweenphysical stocks and book records in case of shortages have been properly dealt with in thebooks of accounts while excesses have been ignored.
iii. The Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Consequently clauses (iii) (a)(b) & (c) of paragraph 3 of the Order are not applicable.
iv. According to information and explanation given to us section 185of the Act regarding loans to directors is not applicable to the Company by virtue ofNotification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of CorporateAffairs Govt. of India. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 186 of the Act withrespect to the loans and investments made.
v. According to information and explanations given to us the Companyhas not accepted any deposits from the public within the meaning of the directives issuedby the Reserve Bank of India and provisions of sections 73 74 75 and 76 of the Act andthe Rules framed thereunder.
vi. We have broadly reviewed the books and records maintained by theCompany as specified by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 in respect of manufacturing activities and areof the opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the records with a view todetermine whether they are accurate and complete.
vii. (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company in our opinion the Companyis generally regular in depositing undisputed statutory dues including provident fundemployees' state insurance income tax goods and service tax duty of customs cessand other material statutory dues with the appropriate authorities and there are noundisputed statutory dues as at 31st March 2021 outstanding for a period ofmore than six months from the date they became payable.
(b) According to the information and explanations given to us thedisputed statutory dues that have not been deposited for matters under dispute and pendingdisposal before various authorities are stated below:
|Sl. Nature of No. Statute ||Nature of Disputed Statutory dues ||Period to which the amount relates to ||Forum where the dispute is pending ||Gross disputed amount ( Rs. Crore) ||Amount deposited under protest/adjusted by Tax authorities ( Rs. Crore) |
|1 Income Tax Act 1961 ||Income Tax/TDS/ Interest ||2002-03 2003-04 2004-05 2005-06 ||High Court ||22.06 ||61.77 |
| || ||2016-17 ||Commissioner of Income Tax (Appeals) ||50.74 ||20.54 |
| || ||2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 ||Asst. Commissioner /Deputy Commissioner of Income Tax ||89.90 ||396.65 |
|2 Central Excise Act 1944 ||Central Excise ||2007-08 to 2013-14 ||High Court ||397.58 ||0.10 |
| || ||1999-2000 to 2014-15 ||Tribunal ||7-47 ||0.39 |
| || ||2007-08 to 2015-16 ||Appellate Authority ||5.40 ||0.19 |
|3 Finance Act 1994 ||Service Tax ||2007-08 to 2016-17 ||Tribunal ||5.07 ||1.96 |
| || ||2007-08 to 2017-18 ||Appellate Authority ||7.67 ||1.19 |
|4 Customs Act 1962 ||Customs Duty ||2000-01 to 2012-13 ||Tribunal ||102.77 ||1.95 |
| || ||2012-13 ||Appellate Authority ||1.70 ||0.32 |
|5 The Orissa VAT Act 2004 ||VAT ||2005-06 to 2009-10 ||Tribunal ||12.60 ||2.17 |
| || ||2016-17 to 2017-18 ||Appellate Authority ||0.05 ||0.00 |
|6 The Orissa Sales Act 1947 ||OST ||1995-96 to 2002-03 ||High Court ||1.63 ||0.37 |
| || ||1992-93 to 2004-05 ||Tribunal ||1.00 ||0.64 |
| || ||2003-04 ||Revisionary Authority ||1.08 ||1.80 |
|7 The Orissa Entry Tax Act 1999 ||Entry Tax ||1999-00 to 2010-11 ||High Court ||12.89 ||6.06 |
| || ||1999-00 to 2013-14 ||Tribunal ||131.52 ||54.06 |
| || ||2004-05 to 2014-15 ||Revisionary Authority ||33.47 ||5.14 |
| || ||1999-00 to 2014-15 ||Appellate Authority ||43.48 ||4.97 |
|8 The Central Sales Act 1956 ||CST ||1991-92 ||High Court ||3.49 ||3.49 |
| || ||1992-93 to 2008-09 ||Tribunal ||277.52 ||77.84 |
|Total ||1209.90 ||641.60 || || || |
viii. According to the information and explanations given to us exceptbill discounting arrangement with banks the Company does not have any loans or borrowingsfrom any financial institution banks Government or debentures holders. The Company hasnot defaulted in repayment of the loans obtained under the bill discounting facility.
ix. The Company has not raised any moneys by way of initial publicoffer further public offer (including debt instruments) or term loans during the year.Accordingly paragraph 3 (ix) of the Order is not applicable to the Company.
x. According to the information and explanations given to us no fraudby the Company or any material fraud on the Company by its officers or employees has beennoticed or reported during the year.
xi. The provision of section 197 read with Schedule V of the Actrelating to managerial remuneration is not applicable to the Company by virtue ofNotification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of CorporateAffairs Govt. of India.
xii. In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company.
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 Companies Act 2013 whereapplicable. The details of such transactions have been disclosed in the 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 the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
xv. According to the information and explanations given to us and basedon our examination of the records the Company has not entered into any non-cashtransactions with any director or persons connected with him as specified in section 192of the Act.
xvi. The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT ON THE STANDALONEFINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2021 OF NATIONAL ALUMINIUMCOMPANY LIMITED
(Referred to in paragraph 2 under the heading of "Report on OtherLegal and Regulatory Requirements" of our Report of even date)
Report on the directions under section 143(5) of the Companies Act2013 by the Comptroller & Auditor General of India
According to the information and explanations given to us by themanagement and on the basis of our examination of books and records of the Company wereport that:
1. The Company has SAP system in place to process all the accountingtransactions through IT system. As there is no processing of accounting transactionsoutside IT system comment on the integrity of the accounts and financial implications ofaccounting transactions processed outside IT system does not arise.
2. There are no restructuring of any loan or cases of waiver/write offof debts/loans/interest made by a lender to Company.
3. During the year no fund has been received/receivable by the Companyfrom Central/State Government or its agencies for any scheme.
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2021 OF NATIONALALUMINIUM COMPANY LIMITED
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of NATIONAL ALUMINIUM COMPANY LIMITED ("the Company") as of 31stMarch 2021 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on 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 and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
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 financial statements whether due to fraud 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 the financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internalfinancial control over financial reporting includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on thefinancial 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.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March2021 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
|For Patro & Co. ||For GNS & Associates |
|Chartered Accountants ||Chartered Accountants |
|FRN: 310100E ||FRN: 318171E |
|(CA Ambika Prasad Mohanty) ||(CA Gokul Chandra Das) |
|Partner ||Partner |
|Membership No.: 057820 ||Membership No.: 086157 |
|UDIN: 21057820AAAAFE5944 ||UDIN: 21086157AAAACF3773 |
|Place: Bhubaneswar || |
|Date: 28th June 2021 || |