To
The Members
NMDC LIMITED
New Delhi
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the standalone financial statements of NMDC LIMITED ("theCompany") which comprise the balance sheet as at 31st March 2019 and thestatement of Profit and Loss (including Other Comprehensive Income) statement of changesin equity and statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation in which are included the Returns for the year ended on that date audited bythe branch auditors of the Company's branches located at Bailadila Iron Ore minesBacheli; Bailadila Iron Ore mines Kirandul; Donimalai project Donimalia; NMDC Iron andSteel plant Nagarnar; Diamond Mining unit Panna; Sponge Iron unit Paloncha; R&Dunit Hyderabad; Regional Office Visakhapatnam.
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 ("IndAS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 312019 and 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 (SAs)specified under section 143(10) of the Act
(SAs).Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the standalone financial statements under the provisions of the Act andthe Rules there under and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion on the standalone financial statements.
Emphasis of Matter
We draw your attention without modifying our opinion in respect of:-
1. Note No. 2.12(2) of the financial statements regarding buy back of 102040815numbers equity shares at Rs 98/- per share during the year for an aggregate considerationof Rs 1000 crore.
2. Note No. 2.34.10 of the financial statements regarding show cause notice havingbeen served on Bailadila project of NMDC by District Collector (South Bastar Dantewada)pursuant to judgment of Honorable Supreme Court of India with reference to writ petition(Civil No- 114 of 2014 dated 2nd August 2017).
3. Note No. 2.34.9 of financial statements regarding suspension of operations atDonimalai Iron Ore Mines owing to imposition of condition by Govt. of Karnataka asking fora premium of 80% on average sales value which is challenged before Honorable High court ofKarnataka.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial
statements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We along with other branch auditors have determined thematters described below as key audit matters to be communicated in our report.
| Sr. No. | Branch | Key Audit Matter | Auditor's Response |
| 1. | NISP | Capital Work- in- Progress: | |
| | The Capital Work In Progress (CWIP) for the financial year ended 31.03.2019 in the unit is Rs 13292.19 crores. Since the amount involved is substantial and these projects takes significant period of time to get ready for intended use this is considered to be a key audit matter. | We obtained a view of the management and examined the process of capitalization. We have relied on the management expertise regarding commissioning of the plant. |
| | (Refer Note No: 2.2 of financial statements) | |
| 2. | Donimalai | Trade Receivable: | |
| | As at 31st March 2019 current asset in respect of trade receivable includes receivables from monitoring committee amounting to Rs 1934.39 crores which are pending adjudication. Since it is a area of higher assessed risk of material misstatement this is considered to be a key audit matter. | We have involved our internal experts to review the nature of the amounts recoverable the sustainability and the likelihood of recover ability upon final resolution. |
| | (Refer Note No:2.34.8 of financial statements) | |
| 3. | HO | Mine Closure Obligation (MCO): | |
| | The company creates Mine closure obligation liability based on the present cost of closure of mining project of the latest mine. The rate of closure arrived at based on such cost is uniformly applied to other mines for arriving at the total MCO liability. | We have involved our internal expertise to review the estimates of the rate of MCO considered by the company and whether any change was required to management's position on these matters. |
| | The matter was considered to be a key audit matter because there is estimate involved as per management's policy. | |
| 4. | HO | Income tax: | |
| | The company has uncertain tax position including matters under dispute which involve significant judgment relating to the possible outcome of these disputes in estimation of the provision of income tax. In view of this the area has been considered as a Key Audit Matter. (Refer Note No:2.29 of financial statements) | Our audit procedures include obtaining details of completed tax assessments and outstanding demands as at the year ended March 312019 from management. We involve our internal experts to discuss with the management regarding estimates used to ascertain the tax provision of disputed cases. |
| | | Our internal experts also consider legal precedence and other rulings in evaluating management's position on these disputed cases. |
| 5. | HO | Investment in Subsidiary Joint Ventures and Associates : | |
| | Investment in Subsidiary Joint Ventures and Associates are valued at cost and adjusted for impairment losses after carrying out impairment testing. Since judgment of the management is required to determine if there is any indication of possible impairment we have considered it to be a key audit matter. | Our audit procedure comprise of identification and understanding of the reasonableness of the principle assumptions used by the management to judge the need for impairment testing. |
| | (Refer Note No:2.4.1 of financial statements) | |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the FinancialPerformance Highlights Directors' Report including Annexures to Directors' Report butdoes not include the standalone financial statements and our auditor's report thereon.
The other information as stated above not made available to us as of the date ofsigning of this report is expected to be made available to us after the date of thisstatutory auditor's report.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information when made 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.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
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 Responsibility 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 totalcomprehensive income changes in equity and cash flows of the Company with the IndAS andother accounting principles generally accepted in India including the Indian AccountingStandards specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statement that give a true andfair view and are free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism 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 controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Other Matter
We did not audit the financial statements/ information of Six branches included in thestand alone financial statements of the Company whose financial statements/financialinformation reflect total assets of '21098.41 crores as at 31st March 2019 andthe total revenue of '12258.15 crores for the year ended on that date as considered inthe standalone financial statements/information of these branches have been audited by thebranch auditors whose reports have been furnished to us and our opinion in so far as itrelates to the amounts and disclosures included in respect of these branches is basedsolely on the report of such branch auditors.
Our opinion 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 and on the basis of such checks of books and records of the company as weconsider appropriate and according to the information and explanations given to us wegive in the "Annexure-1" a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.
2. We are enclosing our report in terms of section 143(5) of the Act on the basis ofsuch checks of books and records of the company as we consider appropriate and accordingto the information and explanations given to us in "Annexure-2" on thedirections issued by the Comptroller & Auditor General of India.
3. As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus.
(c) The reports on the accounts of the branch offices of the Company audited underSection 143(8) of the Act by branch auditors have been sent to us and have been properlydealt with by us in preparing this report.
(d) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) Statement of changes in equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account and with the returns received from thebranches not visited by us.
(e) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules2014.
(f) The provisions of Section 164(2) of the Act in respect of disqualification ofdirectors are not applicable to the company being a Government company in terms ofnotification no:- G.S.R.463(E) dated 5th June 2015 issued by Ministry ofCorporate Affairs Government of India.
(g) 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 -3".
(h) With respect to the other matters to be included in the auditor's report inaccordance with the requirements of Section 197(16) of the Act as amended:
We are informed that the provisions of section 197 read with Schedule V of the Actrelating to managerial remuneration are not applicable to the company being a GovernmentCompany in terms of Ministry of Corporate Affairs notification no- G.S.R.(E) 5thJune 2015.
(i) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 2.31 to the financial statements; [or theCompany does not have any pending litigations which would impact its financial position10]
ii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
| As per our attached report of even date. | |
| For Tej Raj & Pal | (CA Dinakar Mohanty) |
| Chartered Accountants | Partner |
| FRN: 304124E | Membership No. 059390 |
| Place: New Delhi | |
| Date: 28-05-2019 | |
"ANNEXURE -1" TO THE INDEPENDENT AUDITOR'S REPORT
Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirement' of our report of even date to the Financial Statements of the Company for theyear ended March 312019:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company is in the process of carrying out physical verification of fixedassets a regular programme of physical verification of its fixed assets by which all thefixed assets are physically verified by the management over a period of three years. Inour opinion the periodicity of the physical verification is reasonable having regard tothe size of the company and the nature of fixed assets. In accordance with this programcertain fixed assets were verified during the year and no material discrepancies have beennoticed on such verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company as to whether the title deeds of immovableproperties are held in the name of the company our observations are listed below:
| Sl. no. | Description of Assets | Area in acres | Value (in ') as on 31.03.2019 | Issues*(if any) |
| R & D | | | | |
| 01 | Stamp duty of Land | 2.98 | 842208 | No documents regarding stamp duty were made available for verification therefore we are unable to comment. |
| BACHELI | | | |
| LAND LEASE HOLD (GENERAL) | | | |
| 01 | Land Magazine Building and Service Centre. Location Hilltop | 755.27 | Nil | The unit holds possession Letter Dated 24.01.1977 M.P. Govt. gazette Notification dated 07.06.1977. |
| 02 | Land acquisition for screening plant | 470 | Nil | No documents were made available for verification therefore we are unable to comment. |
| 03 | Land acquisition for intake arrangement Location - Bacheli | 28.13 | Nil | Original Sale deed is available for Private land of 14.13 acres (5.718 Hec.). Mutation of Land in favour of NMDC is under process with tahsildar Bacheli. However paper for 14acres Govt. land not available. |
| 04 | Mining Lease of DEP. - 05 | 1334.463 | 539996215 | The unit holds Possession Letter issued by Mining Officer District South Bastar Dantewada. |
| 05 | Mining Lease of DEP. - 10 | 764.379 | 298900815 | The unit holds Possession Letter issued by Mining Officer District South Bastar Dantewada. |
| 06 | Mining Lease of DEP. - 10(FO) | 352.858 | 139164937 | The unit holds Possession Letter issued by Mining Officer District South Bastar Dantewada. |
| 07 | Mining Lease of DEP. - 11A | 764.379 | 3845514 | The unit holds Possession Letter issued by Mining Officer District South Bastar Dantewada. |
| 08 | Land for Sankininalla W/supply scheme for 10 & 11 a proj. | 2 Hectares | 103528 | No documents were made available for verification; therefore we are unable to comment. |
| 09 | Land for Sankininalla W/supply scheme for 10 & 11 a proj. | 3 Hectares | Nil | No documents were made available for verification; therefore we are unable to comment. |
| 10 | Land acquired for Central workshop Location : Bacheli | 23.39 | 62594 | The unit holds Possession Letter of lease deed dated 19.07.1991 from Tahsildar bastar M.P. |
| 11 | Land Lease hold of Dep No 10 for measuring of iron ore | 308.13 (Hecters) | 1 | No documents were made available for verification therefore we are unable to comment. |
| 12 | Land lease hold of pocket No. 12 and 3 near Bhansi | 189.956 (Hecters) | 1 | No documents were made available for verification; therefore we are unable to comment. |
| 13. | Lease Hold land of Bacheli Float | 99.956 (hecters) | 1 | No documents were made available for verification; therefore we are unable to comment. |
| LAND FREEHOLD (GENERAL) | | | |
| 1. | Land for Bhansi Camp Location : Bacheli | Under reconciliation | 7840 | Khasra documents for holding available |
| 2. | Land acquired for Const. of intake water supply to screening plant. Location : Bacheli | 14 | 18987 | No documents were made available for verification; therefore we are unable to comment. |
| 3. | Value of private land from Adivasi for pipeline from Nerli Dam to Screening plant. Location - Bacheli | 1.54 | 7375 | No documents were made available for verification; therefore we are unable to comment. |
| 4. | Value of private land for Oxidation pond. Location :Bacheli. | 17.77 | 13294. | Sale deed for the land 17.77 acres(i.e. 7.191 Hect) available; mutation is under process with Tehsildar. |
| 5. | 4 acres land for railway siding at Bacheli Location : Bacheli | 4 | 5502 | Original sale deed is available mutation application for land is under process with tehsildar. |
| 6. | Land acquired from adivasi for tailing dam near parapur. | 81.35 | 211395 | Attested copy of sale deed obtained from registrar dantewada is avaialable; mutation application is under process with tehsildar. |
| 7. | Acquisition of land for Tailing Dam and diff of amount paid vide JV No/12461/88 | Under Reconciliation | 30635 | No documents were made available for verification; therefore we are unable to comment. |
| 8. | Forest Land for Uniflowly dispatch system | 4-94 | 1240000 | Ministry of environment and forest(MOEF) issued Letter No. 8B/007/2002/FCW/1313 dated 07.06.2002 is available. |
| Sl. no. | Description of Assets | Area in acres | Value (in ') as on 31.03.2019 | Issues*(if any) |
| BUILDINGS (GENERAL) | | Gross Block - 388734256 Net Block - 336116142 | No documents were made available for verification; therefore we are unable to comment. |
| i. | Land for Bhansi Base Camp Location : Bacheli | 30 | Nil | The unit holds possession letter dated 03.06.1996 M.P. Govt. Gazette Notification dated 03.06.1996. |
| 2. | Land for Bacheli Town - ship (lease paids to DFO and cost of stamp for regn.) | 200 | Nil | The unit holds possession letter dated 20.06.1976 M.P. Govt. Gazette Notification dated 09.02.1976. |
| 3. | Land for Bailadila Estate at Jagdalpur Loaction : Jagdalpur | 10 | Nil | No documents were made available for verification; therefore we are unable to comment. |
| 4. | Land for Operation Township at Hill Top Location : Hilltop | 307.06 | Nil | Copy of Gazette Notification issued by M.P. Govt. dated 07.06.1977 denotifying the area is available. |
| Building (Social Amenities) | | Gross Block - 935551377 Net Block - 878560029 | No documents were made available for verification; therefore we are unable to comment. |
| PANNA | Description of Assets | Area in acres | Value (in ') as on 31.03.2019 | Issues*(if any) |
| FREEHOLD LANDS (GENERAL/ SOCIAL) | | | |
| 1. | Land | | 268392 | Measurement details were not made available. |
| 2. | Land at Panna Plot No - 1236/3 | 2.063 | 5176 | No documents were made available for verification; therefore we are unable to comment. |
| 3. | Land at Panna Plot No - 76/2 | 1.821 | 3304 | No documents were made available for verification; therefore we are unable to comment. |
| 4. | Land at Panna Plot No - 1237/2 | 2.063 | 7370 | No documents were made available for verification; therefore we are unable to comment. |
| 5. | Land at Panna Plot No - 1236/2 | 15.873 | 30085 | No documents were made available for verification; therefore we are unable to comment. |
| 6. | Land lease hold Dep No-14 | 317.19 (Hecter) | Nil | The company hold possession letter issued by the Chief Secretary Mining Resource Dept. M.P. |
| KIRANDUL | Description of Assets | Area in acres | Value (in ') as on 31.03.2019 | Issues*(if any) |
| 1. | Land Leasehold Dep-11C Mines and Fine Ore Dump | 122.619 Hectares | 2184430.00 | No documents were made available for our verification there for we are unable to comment. |
| 2. | Cap of 11B Expenditure Dep- 11B Mines | | 11913706.00 | No documents were made available for our verification there for we are unable to comment. |
| 3. | Mining Lease of Dep-14 | 17.81 Hectares | 5731352.00 | No documents were made available for our verification there for we are unable to comment. |
| Land Leasehold (Social Amenities) | | | |
| 1. | Land Leasehold (for Town ship) Type ii Qtr. In Kirandul | 20.81 Hectares | 0.00 | No documents were made available for our verification there for we are unable to comment. |
| Land Freehold (General) | | | |
| 1. | Land-Area in Bacheli Pargana | 1.00 Acres | 338.00 | No documents were made available for our verification there for we are unable to comment. |
| 2. | Land-Area in Bacheli Pargana (Kameli Kala) | 2.10 Acres | 557.00 | No documents were made available for our verification there for we are unable to comment. |
| 3. | Land-Area in Bacheli Pargana (Poro Kameli) | 3.27 Acres | 1341.00 | No documents were made available for our verification there for we are unable to comment. |
| 4. | Land-Area in Bacheli Pargana | 2.58 Acres | 958.00 | No documents were made available for our verification there for we are unable to comment. |
| 5. | Land-Area in Bacheli Pargana | 0.09 Acres | 31.00 | No documents were made available for our verification there for we are unable to comment. |
| 6. | Land-Area in Bacheli Pargana | 0.08 Acre | 212.00 | No documents were made available for our verification there for we are unable to comment. |
| 7. | Land-Area in Bacheli Pargana | 0.22 Acre | 58.00 | No documents were made available for our verification there for we are unable to comment. |
| 8. | Land-Area in Bacheli Pargana | 5.44 Acres | 2216.00 | No documents were made available for our verification there for we are unable to comment. |
| 9. | Land-Area in Kirandul Pargana | 0.93 Acre | 514.00 | No documents were made available for our verification there for we are unable to comment. |
| 10. | Land-Area in Kirandul Pargana | 11.50 Acres | 8525.00 | No documents were made available for our verification there for we are unable to comment. |
| 11. | Land-Area in Kirandul Pargana | 2.20 Acres | 1866.00 | No documents were made available for our verification there for we are unable to comment. |
| 12. | Land-Area in Kirandul Pargana | 4.59 Acres | 3090.00 | No documents were made available for our verification there for we are unable to comment. |
| 13. | Land Area in Bada bacheli | 1.46 Acres | 384.00 | No documents were made available for our verification there for we are unable to comment. |
| 14. | Land Area in Bada bacheli Pargana | 1.35 Acres | 355.00 | No documents were made available for our verification there for we are unable to comment. |
| 15. | Land Area in Bada bacheli Pargana | 0.32 Acres | 158.00 | No documents were made available for our verification there for we are unable to comment. |
| 16. | Land Area in Bada bacheli Pargana | 0.70 Acres | 433.00 | No documents were made available for our verification there for we are unable to comment. |
| 17. | Land Area in Bada bacheli Pargana | 1.40 Acres | 663.00 | No documents were made available for our verification there for we are unable to comment. |
| 18. | Land Area in Bada bacheli Pargana | 1.81 Acres | 477.00 | No documents were made available for our verification there for we are unable to comment. |
| 19. | Land Area in Bada bacheli Pargana | 1.07 Acres | 382.00 | No documents were made available for our verification there for we are unable to comment. |
| 20. | Land Area in Bada bacheli Pargana | 4.27 Acres | 1140.00 | No documents were made available for our verification there for we are unable to comment. |
| 21. | Land Area in Padapur Pargana | 1.00 Acre | 263.00 | No documents were made available for our verification there for we are unable to comment. |
| 22. | Land Area in Padapur Pargana | 1.00 Acre | 1580.00 | No documents were made available for our verification there for we are unable to comment. |
| 23. | Land Area in Padapur Pargana | 1.06 Acres | 279.00 | No documents were made available for our verification there for we are unable to comment. |
| 24. | Land Area in Padapur Pargana | 1.22 Acres | 321.00 | No documents were made available for our verification there for we are unable to comment. |
| 25. | Land Area in kodenar Pargana | 3.48 Acres | 916.00 | No documents were made available for our verification there for we are unable to comment. |
| 26. | Land Area in Jagdalpur | 5.823 Hectares | 105778.00 | No documents were made available for our verification there for we are unable to comment. |
| 27. | Land for Accumulation of Slimes | 39.58 Acres | 709502.00 | No documents were made available for our verification there for we are unable to comment. |
| 28. | Land at Madadi VIL | 15.79 Acres | 446722.00 | No documents were made available for our verification there for we are unable to comment. |
| 29 | Land Freehold in Kirandul pargana | 47.18 Acres | 22569.00 | No documents were made available for our verification there for we are unable to comment. |
| 30 | Land Freehold (Construction of 100 Permanent Type-C Qtrs) | 75.90 Acres | 46200.00 | No documents were made available for our verification there for we are unable to comment. |
| 31 | Land Freehold for Construction of K.V. School Near Praleosh Vidyalaya | 21.62 Acres | 2239610.00 | No documents were made available for our verification there for we are unable to comment. |
| 32 | BUILDINGS (Social Amenities) | | Net Block- 690641990.00 | Documents for construction have been verified. However these buildings have been over the above Land for which no title deeds have been made available for verification. |
| KIRANDUL | | | | |
| 33. | Land lease hold Dep-14 Mines | 322.368 (Hecters) | 4131186 | The company hold possession letter issued by the joint secretary Mining Resources Department Raipur. |
| 34. | Land lease Hold Dep-14 non Mining | 506.742 (Hecters) | 6649904 | The company hold possession letter issued by the joint secretary Mining Resources Department Raipur. |
| 35. | Land Lease Hold Dep No. 11 | 317.79 (hecters) | 1 | The company hold possession letter issued by the chief secretary Mining Resources Department Raipur. |
| NAGARNAR IRON AND STEEL PLANT | | | |
| 1. | Land at villages Nagarnar Kasturi Amaguda & Maganpur | 288.79 (Hecters) | 72758374 | Free hold land for which the company hold possession letter issued by (Kabja Praman Patra) the Tehsildar Jagdalpur |
| 2. | Land at villages Bhamani | 1.82 (Hecters) | 136380 | Free hold land for which the company hold possession letter issued by (Kabja Praman Patra) the Tehsildar Jagdalpur |
| 3. | Land at villages Nagarnar Bijaput Upanpal Kasturi amaguda Madpal Chokawada & Maganpur | 318.74 (Hecters) | 880816636 | Free hold land for which the company hold possession letter issued by (Kabja Praman Patra) the Tehsildar Jagdalpur |
| 4. | Land at villages Chokawada | 7.2 (Hecters) | 2631600 | Free hold land for which the company hold possession letter issued by (Kabja Praman Patra) the Tehsildar Jagdalpur |
| 5. | Land at villages Nagarnar | 155.55 (Hecters) | Not finalized | Free hold land for which the company hold possession letter issued by (Kabja PramanPatra) the Tehsildar Jagdalpur |
| 6. | Land at villages Dhanpunji | 20.28 Acres | 31020964 | Free hold land for which the company hold possession letter issued by (Kabja Praman Patra) the Tehsildar Jagdalpur |
| INDUSTRIAL LAND AND OTHERS | | | |
| 1. | Land at Jhanj Raipur | 1.82 (Hecters) | 60822220 | The company holds possession letter issued by the New Raipur Development Authority |
| 2. | Industrial Free Hold Land | 11.35 Acres | 139.21 crores | Having provisional allotment letters of 13.43 acres but measuring 11.35 acres |
| 3. | Industrial free hold Land purchased from M/s Allwyn Watches Ltd. | 24.23 Acres | 5.88 crores | Purchased land of 26.39 acres but measuring 24.23 acres |
| 4. | Industrial Free Hold land acquired from Chattisgarh Housing board | 1.43 Acres | 0.83 crores | Acquired land of 1.32 acres measuring 1.43 acres |
| 5. | Building ( General Leasehold) | | Net Block' 212851322 | Building constructed on mines lease area. |
2. (a) The management has conducted the physical verification of inventory atreasonable intervals.
(b) The discrepancies noticed on physical verification of the inventory as compared tobooks records which has been properly dealt with in the books of account were notmaterial.
3. According to the information and explanations given to us and on the basis of ourexamination of the records of the company the company has not granted any loans securedor unsecured to companies firms Limited Liability Partnerships or other parties coveredin the register maintained under Section 189 of the Companies Act 2013. Accordingly theprovisions of clause (3) (iii) (a) to (c) of the order are not applicable to the companyand hence not commented upon.
4. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of loans investments guarantees and security.
5. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
6. The Central Government has prescribed the maintenance of cost records under Section148(1) of the Act. Company is generally maintaining proper cost records as specified bythe Central Government under sub-Section (1) of Section 148 of the Companies Act 2013.
7. According to information and explanations given to us in respect of statutory dues:
(a) The company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income - Tax Sales tax Service TaxDuty of Customs Duty of Excise Value added Tax Cess and any other statutory dues withthe appropriate authorities.
(b) There were no undisputed amounts payable in respect of including Provident FundEmployees State Insurance Income - Tax Sales tax Service Tax Duty of Customs Duty ofExcise Value added Tax Cess and any other statutory dues were in arrears as at March312019 for a period of more than six months from the date on when they become payable.
(c) According to the information and explanation given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added taxoutstanding on account of any dispute except the followings:
| UNIT | NAME OF STATUE | NATURE OF DUES | PERIOD | FORUM WHERE DISPUTE IS PENDING | Rs in Crores |
| KIRANDUL | Nagarpalika Kirandul | Export Tax | 1995 - 96 | Hon'ble High Court of | 11.26 |
| | | 1996 - 97 | Chhattisgarh | |
| | | 2008 - 09 To 2018 - 19 | | |
| MP Commercial Tax | Commercial Tax | 2002-03 | Dy. Commissioner of | 1.60 |
| Act 1994 | | 2005-06 | Commercial Tax (Appeal) | |
| | | 2008-09 | | |
| DGGI Raipur Zonal Unit | Service Tax | 2017-18 | It commission Raipur Commissionerate | 0.65 |
| Commissioner of GST and Central Excise (Audit) | GST | 2017-18 | Director(c) GST and Central Excise (Audit) | 0.11 |
| DFO Dantewada and state of Chhattisgarh | Forest Permit Fee | 14.06.2002 to 31.10.2012 | Bilaspur bench of Ho'ble High Court Chhattisgarh | 63.29 |
| Nagarpalika Kirandul | Conservancy Tax | 1997-98 to 2005-06 | High Court Chhattisgarh | 0.79 |
| | | 2014-15 to 2017-18 | | |
| Nagarpalika Kirandul | Property Tax | 2013-14 to 2016-17 | High Court Chhattisgarh | 74.40 |
| The Appellate Tribunal | Service Tax | July 2012- June 2014 | Service Tax Appellete Tribunal | 16.12 |
| High Court | Service Tax on Royalty | 2017-18 | High Court Bilaspur | 80.23 |
| DONIMALAI | Karnataka Sales Tax Act 1957 | Tax on ERP Licenses | 1990-91 199192 | Dy. Commissioner of Commercial Tax Bellary | 0.51 |
| Karnataka Forest Act 1963 | Forest Development Tax | 2008-09 to 2010-11 | Hon'ble Supreme Court of India | 243.69 |
| Central Excise Customs and Service tax | Service Tax on services provided to CISF | 2012-13 to 2015-16 | Commissioner of Central Excise (Appeals) | 0.23 |
| Central Excise Customs and Service tax | Service Tax on LD and penalty recovered from contractors | 2013-14 to 2015-16 | Commissioner of Central Excise (Appeals) | 0.27 |
| Central Excise Customs and Service tax | Objection to Trans - 1 Credit in respect of Service Tax credit taken in July 2017 GST | 2017 - 18 | Central Tax (CGST) Hosapete | 0.49 |
| Central Excise Customs and Service tax | Service Tax on Royalty | 01.04.2016 to 30.06.2017 | Commissioner of Central Excise (Appeals) Belagavi | 97.00 |
| PANNA | Service tax on Royalty | Service Tax | 2016-17 201718 (Q1) | High Court Jabalpur | 0.85 |
| Commercial Tax | Sales & Entry Tax | 2013-14 | DCIT Sagar | 0.23 |
| Commercial Tax | Sales & Entry Tax | 2016-17 | DCIT Sagar | 0.04 |
| BACHELI | The Finance Act 1994 | Service Tax | July 2012 to June 2014 | The Appellate Tribunal | 59.38 |
| The Finance Act 1994 | Service Tax | April 2016 to March 2019 | The Appellate Tribunal | 102.38 |
| VIZAG | The Finance Act 1994 | Service Tax | 2007-08 TO 2011-12 | Service Tax - Vizag Sales Tax - Hyderabad | 2.74 |
| NISP | Central Excise Act. | GST Refund | F.Y. 2018-19 | Commissioner Appeals U/S 35 of the Central Excise Act | 3.40 |
| Head Office | Income Tax Act 1961 | Income Tax | FY 2015-16 | CIT(A) | 70.54 |
| | | 2010-11 2005- 06 1990-00 & 2001-02 2006- 07 to 2009-10 201112 to 2013-14 | High Court | 1604.71 |
| | | 2014-15 | ITAT Hyderabad | 98.58 |
| The Finance Act 1994 | Service Tax | 01.10.2013 to 30.09.2014 &01.10.2007 to 31.10.2012 | CESTAT | 28.28 |
| | | 01.07.2012 to 31.03.2015 | COM.(A) Mysore | 0.17 |
| | | TOTAL | | 2561.94 |
| | | | | |
8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans and borrowings to any financialinstitutions banks government or dues to debenture holders.
9. The Company has not raised money by way of initial public offer or further publicoffer(including debt instrument) or term loans and hence reporting under clause 3 (ix) ofthe Order is not applicable to the Company.
10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the company or no material fraud on the company by its officersor employees has been noticed or reported during the year.
11. In our opinion and according to the information and explanations given to us thecompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule V to the Act.
12. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of theorder is not applicable to the company.
13. In our opinion and according to the information and explanations given to us thecompany is in compliance with section 177 and 188 of the Companies Act2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.
14. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause 3 (xiv) of the order is not applicable to the company.
15. In our opinion and according to the information and explanations given to usduring the year the company has not entered into any non cash transactions with itsDirectors or persons connected to its Directors and hence provisions of section 192 of theCompanies Act2013 are not applicable to the company.
16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act1934.
| As per our attached report of even date. | For Tej Raj &Pal |
| Chartered Accountants |
| (FRN. 304124E) |
| ( CA. Dinakar Mohanty) |
| New Delhi | Partner |
| 28th May 2019 | Membership No-059390 |
"ANNEXURE-2" TO THE AUDITOR'S REPORT
Report on the Direction of the Comptroller and Auditor General of India required undersub section 5 of section 143 of the Companies Act 2013 ("the Act")
| Sl. No. | Directions | Reply |
| 1. | Whether the company has system in place to process all the accounting transaction 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. | Yes the company has a ERP system (Oracle) to process all the accounting transactions through IT system. However for preparation of financial statements some manual interventions are carried out. |
| 2. | Whether there is any restricting of an existing loans 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 financial impact may be stated. | Not Applicable |
| 3. | Whether funds received/ receivable for specific schemes from central / state agencies were properly accounted for/ utilised as per its terms and conditions? List the cases of deviations. | Not Applicable |
| For Tej Raj &Pal |
| Chartered Accountants |
| (FRN. 304124E) |
| |
| ( CA. Dinakar Mohanty) |
| New Delhi | Partner |
| 28th May 2019 | Membership No-059390 |
