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NCC Ltd.

BSE: 500294 Sector: Infrastructure
NSE: NCC ISIN Code: INE868B01028
BSE 15:16 | 18 Oct 81.95 0.45
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82.20

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83.95

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81.65

NSE 15:09 | 18 Oct 81.80 0.30
(0.37%)
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82.10

HIGH

83.90

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OPEN 82.20
PREVIOUS CLOSE 81.50
VOLUME 271624
52-Week high 100.00
52-Week low 30.90
P/E 16.90
Mkt Cap.(Rs cr) 4,998
Buy Price 81.90
Buy Qty 8.00
Sell Price 82.00
Sell Qty 2805.00
OPEN 82.20
CLOSE 81.50
VOLUME 271624
52-Week high 100.00
52-Week low 30.90
P/E 16.90
Mkt Cap.(Rs cr) 4,998
Buy Price 81.90
Buy Qty 8.00
Sell Price 82.00
Sell Qty 2805.00

NCC Ltd. (NCC) - Auditors Report

Company auditors report

To the Members of

NCC Limited

Report on the Audit of the Standalone Ind AS Financial Statements Opinion

We have audited the accompanying standalone Ind AS financial statements of NCC Limited("the Company") which includes 5 branches and 30 joint operations comprisingthe Balance sheet as at March 31 2021 the Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and notes to the standalone Ind AS financialstatements including a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone Ind AS financialstatements") .

In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of reports of the branch auditors and otherauditors on the separate financial statements and other financial information of thebranches and joint operations referred to in the Other Matter paragraph below theaforesaid standalone Ind AS financial statements give the information required by theCompanies Act 2013 as amended ("the Act") in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at March 31 2021 its profit includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as 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 Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone Ind AS financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we and other auditors referred to in the Other Matterparagraph below have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the standalone Ind AS financial statements.

Emphasis of Matter

We draw attention to note 49 of the standalone Ind AS financial statements whichdescribes the uncertainties and possible effects of COVID-19 on the operations of theCompany. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 31 2021. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context. We havedetermined the matters described below to be the key audit matters to be communicated inour report. We have fulfilled the responsibilities described in the Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone Ind AS financial statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanying standalone Ind AS financial statements.

Key audit matters How our audit addressed the key audit matters
Trade receivables and contract assets
Total trade receivables and total contract assets amounting to Rs 2660.19 crores and Rs 4281.58 crores respectively represents approximately 54.65% of the total assets of the Company as at March 31 2021. Our audit procedures amongst others included the following:
In assessing the recoverability of the aforesaid balances and determination of allowance for expected credit loss management's judgement involves consideration of aging status historical payment records evaluation of litigations the likelihood of collection based on the terms of the contract and the credit information of its customers including the possible effect from the pandemic relating to COVID-19. • We understood and tested on a sample basis the design and operating effectiveness of management controls over the recognition and the recoverability of the trade receivables and contract assets.
• We performed test of details and tested relevant contracts documents and subsequent settlements for material trade receivable balances and amounts included in contract assets that are due on performance of future obligations.
Management estimation is required in the measurement of work completed as at year end for recognition of unbilled revenue. • We tested the aging of trade receivables at the year end.
We considered this as key audit matter due to the materiality of the amounts and significant estimates and judgements as stated above. • We performed test of details and tested relevant contracts and documents with specific focus on measurement of work completed as at the year-end for material unbilled revenue balances included in contract asset.
• We used the work of internal auditors who under our supervision were present at the project site to observe inventory count performed by the management including physical inspection of work completed in respect of unbilled revenue. We evaluated the competence capabilities and objectivity of the aforesaid internal auditors.
• We performed additional procedures in respect of material over-due trade receivables and long outstanding contract assets i.e. tested historical payment records correspondence with customers and legal advice obtained by the management on litigations from legal experts.
• We evaluated the competence capabilities and objectivity of the aforesaid legal experts
• We performed additional procedures in respect of balances disclosed in note 48 which include review of communications to/ from customers physical inspection of work done in respect of unbilled revenue verification of last bills certified etc.
• We assessed the allowance for expected credit loss made by management including the possible effect from the pandemic relating to COVID-19.
Carrying value of investment made in a subsidiary
The Company's carrying value of investment in NCC Infrastructure Holdings Limited (‘NCCIHL') a subsidiary as at March 31 2021 is Rs 388.53 crores which is higher by Rs 144.53 crores as compared to the Company's share of net worth in NCCIHL as per its audited financial statements. (refer note 4.3) Our audit procedures amongst others included the following:
• We obtained and read management's assessment of the recoverable amount of the investment.
Management's assessment of the recoverable amount of the investment in the above subsidiary has been identified as a key audit matter due to the significance of the carrying value of the investment and that it requires the management to make significant estimate of future cash flows including from the claims filed/won at arbitration by NCCIHL which are sub-judice and not accounted for by taking into consideration the management's internal assessment and legal advice on the tenability of these claims. • We traced the net worth of NCCIHL to the audited financial statements of NCCIHL as at and for the year ended March 31 2021 audited by another firm of chartered accountants.
• We obtained a summary of the claims filed by NCCIHL but not accounted for. We read and assessed the legal advice obtained by the Company from expert in respect of the tenability of the above claims.
• We obtained and read the arbitration orders received in favor of NCCIHL.
• We evaluated the competence capabilities and objectivity of the aforesaid expert.
• We assessed the allowance for impairment made by management.
Indirect tax litigations
The Company is subject to assessments by tax authorities on various indirect tax matters resulting into litigations/disputes (refer note 35(i) Our audit procedures amongst others included the following:
(a) to the standalone Ind AS financial statements). • We obtained list of indirect tax litigations as at March 31 2021 from the management.
The tax matters involve material amounts which are at various stages and the proceedings take significant time to resolve.
Management exercises significant judgement in assessing the financial impact of the tax matters due to the complexity of the cases and involvement of various tax authorities. • We discussed the matters with the management to understand the possible outcome of these disputes.
• We involved our experts to review the management's assessment of the possible outcome of the disputes relating to indirect tax litigations.
Accordingly we have identified this as a key audit matter. • We assessed management's assumptions and estimates in respect of contingent liability disclosure in note 35(i)(a) to the accompanying standalone Ind AS financial statements.

We have determined that there are no other key audit matters to communicate in ourreport.

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

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone Ind AS financial statements and our auditor's report thereon. Our opinionon the standalone Ind AS financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon. In connection with our audit ofthe standalone Ind AS financial statements our responsibility is to read the otherinformation and in doing so consider whether such other information is materiallyinconsistent with the standalone Ind AS financial statements or our knowledge obtained inthe audit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Standalone Ind AS 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 Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS financial statements management 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.

Those charged with governance are also responsible for overseeing the Company'sfinancial reporting process.

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

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial 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 Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone Ind ASfinancial 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 the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to standalone Ind AS financialstatements in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation. We communicate with those charged with governance regardingamong other matters the planned scope and timing of the audit and significant auditfindings including any significant deficiencies in internal control that we identifyduring 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 Ind AS financialstatements for the financial year ended March 31 2021 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Other Matter

We did not audit the financial statements and other financial information of 4 branchesand 9 joint operations included in the accompanying standalone Ind AS financial statementsof the Company whose financial statements and other financial information reflect totalassets of Rs 182.52 crores as at March 31 2021 and the total revenues of Rs370.49 crores and net cash inflows of Rs 2.87 crores for the year ended on that date.These financial statements/information of these branches and joint operations have beenaudited by the branch auditors and other auditors respectively whose reports have beenfurnished to us and our opinion in so far as it relates to the amounts and disclosuresincluded in respect of these branches and joint operations is based solely on the reportof such branch auditors and other auditors respectively.

Of these 1 branch is located outside India whose financial statements and otherfinancial information have been prepared in accordance with accounting principlesgenerally accepted in their respective country and which has been audited by branchauditors under generally accepted auditing standards applicable in their respectivecountry. The Company's management has converted the financial statement of such branchlocated outside India from accounting principles generally accepted in their respectivecountry to accounting principles generally accepted in India. We have audited theseconversion adjustments made by the Company's management. Our opinion in so far as itrelates to the balances and affairs of such branch located outside India is based on thereport of branch auditors and the conversion adjustments prepared by the management of theCompany and audited by us.

Our opinion on the standalone Ind AS financial statements and our report on Other Legaland Regulatory Requirements below is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that: (a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; (b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books and proper returns adequate for the purposes of our audit havebeen received from the branches not visited by us; (c) The reports on the accounts of thebranch offices of the Company audited under Section 143(8) of the Act by branch auditorshave been sent to us and have been properly dealt with by us in preparing this report; (d)The Balance Sheet the Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account and with the returnsreceived from the branches not visited by us; (e) In our opinion the aforesaid standaloneInd AS financial statements comply with the Accounting Standards specified under Section133 of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amended;

(f) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct; (g) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure 2" to this report; (h) In our opinion the managerial remuneration forthe year ended March 31 2021 has been paid / provided by the Company to its directors inaccordance with the provisions of section 197 read with Schedule V to the Act; (i) Withrespect to the other matters to be included in the Auditor's Report in accordance withRule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinion andto the best of our information and according to the explanations given to us: i. TheCompany has disclosed the impact of pending litigations on its financial position in itsstandalone Ind AS financial statements – Refer Note 35(i) and 42 to thestandalone Ind AS financial statements; ii. The Company has made provision as requiredunder the applicable law or accounting standards for material foreseeable losses if anyon long-term contracts including derivative contracts; and iii. There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Navneet Rai Kabra
Partner
Membership Number: 102328
UDIN: 21102328AAAADM9587
Place of Signature: Hyderabad
Date: May 28 2021

ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

Re: NCC Limited (‘The Company')

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) A major portion of fixed assets have been physically verified by the management inaccordance with the programme of verification which in our opinion provides forphysical verification of all fixed assets at reasonable interval having regard to the sizeof the Company and nature of its assets. According to the information and explanationsgiven to us the discrepancies noticed on such verification were not material and havebeen properly dealt with in the books of account. (c) According to the information andexplanations given by the management the title deeds of immovable properties included inproperty plant and equipment/ fixed assets are held in the name of the Company.

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

(iii) (a) The Company has granted loans to companies covered in the register maintainedunder section 189 of the Companies Act 2013. In our opinion and according to theinformation and explanations given to us the terms and conditions of the grant of suchloans are not prejudicial to the Company's interest.

(b) The schedule of repayment of principal and payment of interest has been stipulatedfor the loans granted and the repayment/receipts are regular.

(c) There are no amounts of loans granted to companies firms or other parties listedin the register maintained under section 189 of the Companies Act 2013 which are overduefor more than ninety days.

(iv) In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the Company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the construction services and areof the opinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of custom duty of excise value added tax goodsand service tax cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax goods and service tax cessand other material statutory dues were outstanding at the year end for a period of morethan six months from the date they became payable.

(c) According to the records of the Company the dues outstanding of income-taxsales-tax service tax custom duty excise duty Goods and Service tax value added taxand cess on account of any dispute are as follows:

Rs
Statute Nature of the dues Forum where dispute is pending Period to which the amount relates Amount involved Amount paid under protest
CST Appellate Authority Bhopal 2011-15 0.72 0.49
CST Commissioner of Commercial Taxes Ranchi Jharkhand 2014-15 0.31 -
Sales tax and VAT Law CST Sales Tax Tribunal Mumbai 2010-14 10.88 0.47
VAT Additional Commissioner Andhra Pradesh 2012-13 12.53 8.27
VAT Additional Commissioner Grade-2 (Appeals) Commercial Tax Range-5 Lucknow 2006-07 1.55 0.16
VAT Additional Commissioner (CT) West Bengal 2010-11 20.32 -
VAT Commissioner of Sales Tax New Delhi 2009-11 & 2012-14 13.00 4.74
VAT Appellate Deputy Commissioner Kerala 2008-09 0.31 0.05
VAT Additional Commissioner West Bengal 2014-15 2.77 2.93
VAT Commissioner of Sales Tax Kerala 2012-14 2.13 -
VAT Commissioner of Commercial Taxes Ranchi Jharkhand 2010-11 & 2014-16 5.07 0.15
VAT High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh 2005-06 1.45 -
VAT Hon'ble High Court of Odisha 2007-12 10.00 3.38
VAT Hon'ble High Court of Tamil Nadu 2006-07 0.44 -
VAT Sales Tax Appellate Tribunal Andhra Pradesh 2005-09 16.19 13.90
VAT Sales Tax Tribunal Mumbai. 2010-15 39.30 7.72
Sales tax and VAT Sr. Joint Commissioner (Appeals) West Bengal 2008-10 & 2012-13 31.93 0.94
VAT Law VAT Appellate Deputy Commissioner Hyderabad 2007-10 & 2013-14 32.58 32.58
VAT Sales Tax Appellate Joint Commissioner Andhra Pradesh 2010-12 14.76 14.76
VAT Joint Commissioner Lucknow 2012-17 44.81 29.97
VAT Joint Commissioner West Bengal 2015-17 8.70 6.78
VAT Deputy Commissioner of Sales Tax Bhubaneswar Oct'15 to Mar'18 12.19 2.40
VAT Joint Commissioner Lucknow (Appeals) 2017-18 3.02 2.36
Entry Tax High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh 2012-13 0.99 0.50
Entry Tax Hon'ble High Court of Orissa 2007-2012 0.74 -
Sales Tax High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra 1994-95 0.44 0.27
Pradesh
Central Excise Act 1944 Sales Tax Excise Duty Sales Tax Appellate Tribunal Andhra Pradesh CESTAT Bangalore 2000-01 2007-08 0.69 0.46 0.10 0.10
Service Tax CESTAT Bangalore 2005-12 75.03 0.80
Service Tax CESTAT Hyderabad 2010-15 7.87 0.48
Finance Act 1994 Service Tax Commissioner (Appeals) Service Tax 2005-08 0.39 0.10
Service Tax High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh 2007-09 13.02 -

(viii) In our opinion and according to information and explanations given by themanagement the Company has not defaulted in repayment of dues to a financial institutionand banks. The Company did not have any outstanding dues to government or debentureholders. (ix) In our opinion and according to the information and explanations given bythe management the Company has not raised the monies by way of further public offer(including debt instruments). In our opinion and according to the information andexplanations given by the management the Company has utilised the monies raised by way ofterm loans for the purposes for which they were raised.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or no fraud on the Companyby the officers and employees of the Company has been noticed or reported during the year.(xi) According to the information and explanations given by the management the managerialremuneration has been paid / provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Companies Act 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.(xiii) According to the information and explanations given by the management transactionswith the related parties are in compliance with section 177 and 188 of Companies Act

2013 where applicable and the details have been disclosed in the notes to the financialstatements as required by the applicable accounting standards.

(xiv) According to the information and explanations given by the management theCompany has complied with provisions of section 42 of the Companies Act 2013 in respectof Private Placement of shares during the year. According to the information andexplanations given by the management we report that the amounts raised have been usedfor the purposes for which the funds were raised.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013. (xvi) According to theinformation and explanations given to us the provisions of section 45-IA of the ReserveBank of India Act 1934 are not applicable to the Company.

For S.R.BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm registration number : 101049W/E300004
Per Navneet Rai Kabra
Partner
Membership No.102328
UDIN: 21102328AAAADM9587
Place: Hyderabad
Date: May 28 2021

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE IND ASFINANCIAL STATEMENTS OF NCC LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to these standalone IndAS financial statements of NCC Limited ("the Company") as of March 31 2021 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.

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 the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to these standalone Ind AS financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the "Guidance Note") and theStandards on Auditing as specified under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both issued by ICAI.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 with reference to these standalone Ind AS financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls with reference to these standalone Ind ASfinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to standalone Ind AS financial statements included obtaining anunderstanding of internal financial controls with reference to these standalone Ind ASfinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto 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 internal financialcontrols with reference to these standalone Ind AS financial statements.

Meaning of Internal Financial Controls With Reference to these Standalone Ind ASFinancial Statements

A company's internal financial controls with reference to these standalone Ind ASfinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of standalone Ind AS financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial controls with reference to these standalone IndAS financial statements includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standaloneInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standaloneInd AS financial statements.

Inherent Limitations of Internal Financial Controls With Reference to these StandaloneInd AS Financial Statements

Because of the inherent limitations of internal financial controls with reference tothese standalone Ind AS financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to these standalone Ind AS financial statements to future periodsare subject to the risk that the internal financial control with reference to thesestandalone Ind AS financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

InouropiniontheCompanyhasinallmaterialrespectsadequate internal financial controlswith reference to these standalone Ind AS financial statements and such internal financialcontrols with reference to these standalone Ind AS financial statements were operatingeffectively as at March 31 2021 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the ICAI.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Navneet Rai Kabra
Partner
Membership Number: 102328
UDIN: 21102328AAAADM9587
Place of Signature: Hyderabad
Date: May 28 2021

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