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State Trading Corporation of India Ltd.

BSE: 512531 Sector: Others
NSE: STCINDIA ISIN Code: INE655A01013
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OPEN 82.60
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VOLUME 5353
52-Week high 127.00
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P/E 17.14
Mkt Cap.(Rs cr) 477
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OPEN 82.60
CLOSE 81.95
VOLUME 5353
52-Week high 127.00
52-Week low 67.10
P/E 17.14
Mkt Cap.(Rs cr) 477
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

State Trading Corporation of India Ltd. (STCINDIA) - Auditors Report

Company auditors report

To

The Members of

The State Trading Corporation of India Limited New Delhi

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the Standalone Financial Statements of The State Trading Corporation ofIndia Limited ("STC" or "the Company") which comprise the StandaloneBalance Sheet as at 31st March 2020 and the Standalone Statement of Profit and Loss(including Other Comprehensive Income) the Standalone statement of Changes in Equity andthe Standalone Statement of Cash Flows for the year ended on that date and notes to thefinancial statements including a summary of the significant accounting policies and otherexplanatory information in which the Accounts of Branches for the year ended on that dateaudited by the Branch Auditors of the Company's location at Mumbai Kolkata BengaluruChennai & Ahmedabad are incorporated (hereinafter referred to as "The StandaloneFinancial Statements").

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section [refer (a) (b) and (c) below] of our report the aforesaid StandaloneFinancial Statements give the information required by the Companies Act 2013 ("theAct") in the manner so required and give a true and fair view in conformity with theIndian Accounting Standards prescribed under section 133 of the Act read with theCompanies ( India Accounting Standards ) Rule 2015 as amended ("Ind AS") andother accounting principles generally accepted in India of the state of affairs of theCompany as at March 31st 2020 and its loss and total comprehensive income changes inequity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

a. Non provision in respect of the items / matters as indicated below has resulted inthe loss being shown lower by Rs. 231.27 crore for the year

i. Refer note no.39(9) for not providing firm liability of Rs.3.92 Crores from one ofthe party M/s Lichen Metals Private Limited after adjusting the deposit of Rs.27.95crores from Holding Company of the Party. The said Holding Company had approached forarbitration against the adjusted deposit and the arbitration award was in favour ofholding Company. STC had filed an appeal before the Hon'ble single bench of High Courtagainst the arbitration award. However under the Order passed by the Hon'ble CalcuttaHigh Court STC has deposited an amount of Rs.31.92 Crores on losing the case being theadjusted deposit with interest and made a provision for Rs.27.95 Crores in the books ofaccounts in the current year.

Considering the above circumstances the non-provision of the balance amount of Rs.3.92crores has resulted in the loss being shown lower by Rs.3.92 crores with consequentialeffect on Retained earnings and overstatement of claim recoverable by the same amount.

ii. Refer note 39(1) for not providing liability of Rs.3.51 Crores (net of carryingvalue of pledged stocks) where the Company had supplied HR coils to M/s. Conros Steelduring 2009-10. Party defaulted in making payment against one of the LCs amounting toapprox. 12.05 Crore (LC value Rs.10.05 Crore and interest & other expenses of Rs.2.00Crore). The Company has filed civil applications and criminal complaint under varioussections of India Penal Code. The material sold to the associate was pledged to theCompany and kept under the custody of CWC. However another PSU viz. M/s. Metal and ScrapTrading Corporation (MSTC) had also made a claim of ownership of stock. Hence STC hasfiled declaratory suit in the lower court Panvel Navi Mumbai. Meantime the Hon'bleCourt has asked MSTC to conduct the sale of pledged stock and deposit the sale proceedswith the Hon'ble Court. The matter is still pending. Further the Lender Institutions haveinitiated proceeding at NCLT against the associate STC has filed its claim of Rs.28.70Crore (including interest of Rs.16.65 Crore shown as contingent assets) before NCLT on21.08.2018.

Considering the above circumstances the non provision of the balance amount of Rs.3.51crores has resulted in the loss being shown lower by Rs.3.51 crores with consequentialeffect on Retained earnings and overstatement of claim recoverable by the same amount.

iii. Refer Note 15 where inventory includes Rs.0.05 Crores at Bangalore Branch whichhas not been written down to its realizable value though the Company has discontinued thisline of business for the past 3 years.

Considering the above circumstances loss for the year is understated by Rs.0.05Crores with consequential effect on Retained earnings' by the same amount andoverstatement of inventories' by Rs. 0.05 Crores.

iv. Refer note no. 38(ii) "Contingent Liabilities" which includes an amountas shown as a contingent liability Rs.4.98 Crores against which the Company has notprovided firm liability though the Company has lost the court case.

v. Refer note 12 & 55 the Company has Deferred Tax Asset of Rs.86.49 Croreshowever there is no virtual certainty of profits in the future considering the high valueof contingent liabilities significant decrease in the sales value and negative netcurrent assets of the Company. As a result of matter above loss for the year isunderstated by Rs.86.49 Crores with consequential effect on Retained earnings by the sameamount and overstatement of assets.

vi. Refer foot note of note no 38 for non-provision of a demand of Rs.132.32 Croresreceived from Land and Development Office - New Delhi which has resulted inunderstatement of loss by Rs.132.32 Crores and understatement of liabilities.

b. The Company has not complied with:

i. Ind AS 40 (regarding Fair Value Measurement of Investment Property) by notperforming fair valuation of investment property as on balance sheet date. (refer footnote of note no.6)

ii. Ind AS 21 (regarding Effects of Changes in Foreign Exchange) by not revaluing thecarrying amounts in most cases of foreign currency receivables and payables which areunder litigation/disputed. (refer note no. 58)

iii. Ind AS 109 (regarding impairment of financial assets and recognition of expectedcredit loss) by not making credit impairment on undisputed trade receivable of '164.64crore. The impact of the same is not ascertainable (refer note no 9).

iv. Ind AS 116 (regarding Leases) by not ascertaining the carrying value of leaseholdproperties in case of Jawahar Vyapar Bhawan Malviya Nagar Housing Colony and Agra Office.Due to unavailability of the lease period in these cases impact of the same is notascertainable (refer note no 4).

v. Ind AS 16 (regarding Revaluation of Property Plant and Equipment) by not complyingwith the requirement of the Revaluation. Accordingly the balance of the RevaluationReserve is overstated by '14.33 Crores which is subject to the Fair Valuation yet to beperformed by the Company. (refer note no 4 & 19).

c. The impact of the following is not ascertainable:

i. Note No 20 and 55 where the Company owed substantial amount to the bank for whichlender banks initiated the action of recovery by filing O.A. No. 148/2019 before DRT on18/02/2019. However subsequently Syndicate Bank (now Canara Bank) one of the constituentlender also filed insolvency petition in NCLT under section 7 of the IBC Code 2016 on21/02/2019. In response to the above action by Bank company for the settlement of itsdebt payable to the bank offered One Time Settlement (OTS) vide letter dated 20/03/2019 towhich Syndicate Bank (now Canara Bank-the lead banker) responded on 22/05/2019 giving acounter offer of settlement of which principle terms inter alia were as under: -

• Payment of Rs.1100 Crores immediately.

• Payment of Rs.300 Crores by sale of STC immovable properties.

• Balance amount of Rs.506.24 Crores by assigning 50% of realized trade receivablewithin 5 years from 1st Jan 2019.

Syndicate Bank (now Canara Bank) by their offer dated 22/05/2019 proposed to sign MOUnot later than 30/06/2019. Syndicate Bank (now Canara Bank) also confirmed vide letterdated 22/05/2019 that as part of settlement Rs. 900 Crores were already received from STCand balance amount of Rs. 200 Crores were to be remitted based on balances arrived on31/12/2018. On verification of documents it is found that Rs. 200 Crores were remitted on27/05/2019 but without executing any MOU and till date revised MOU/OTS Agreement if anyhas not been executed.

Based on the information and explanations provided to us in our opinion non-executionof MOU/OTS Agreement to bind the banker in terms of final settlement is a lapse on thepart of the company. Such irregularity may lead to uncalled for enquiries later on withregard to non-execution of MOU to bind the bankers in terms of final settlement.

Further subsequently a meeting was held on 29/08/2019 under the Chairmanship ofHon'ble Minister Commerce & Industry regarding settlement of dues of PEC and STC.PEC is an unlisted company 100% owned by Government whereas STC is a listed companylisted with Bombay Stock Exchange and National Stock Exchange and as on date of our report10% of shares are held by the public at large and remaining 90% is held by the CentralGovernment. As per minutes of the meeting held on 29/08/2019 and communicated by letterdated 09/09/2019 by Under Secretary Govt. of India it was resolved that since PEC doesnot have meaningful assets to pay its present outstanding except certain flats /homeshaving value approximately of Rs. 10 Crores therefore in order to repay debt of PEC of Rs1390.01 Crores so that public sector bank do not suffer a decision was taken in themeeting to sell/transfer Jawahar Vyapaar Bhawan New Delhi an immovable property owned bythe STC after due process of taking exemption from Land & Development office thelessor of the plot of land on which Jawahar Vyapaar Bhawan is constructed title will betransferred and lender bank will dispose off the properties in transparent manner. It wasfurther decided that Syndicate Bank (now Canara Bank) will revise the agreement of OTSwith STC and include PEC in its ambit so as to swiftly conclude the full and finalsettlement of pending dues of these companies to banks.

The meeting under the Chairmanship of Hon'ble Minister Commerce & Industry alsodecided that Government was going to close down STC and PEC.

Based on minutes of the meeting dated 29/08/2019 Syndicate Bank (now Canara Bank) videletter dated 11/10/2019 communicated about the opinion that they have obtained from theircounsel namely M/s Cyril Amarchand Mangaldas about possible way out to save the payment ofstamp duty on transfer / assignment of Jawahar Vyapaar Bhawan through binding agreementsin favor of buyer.

Thereafter an opinion has been sought by the company from M/s Shardul AmarchandMangaldas wherein they have opined inter-alia that merger with any other profitablecompany namely MMTC could be another option other than closer.

We have been informed that NCLT proceedings have been withdrawn by Syndicate Bank (nowCanara Bank) but the DRT withdrawal process is still pending. In the Consortium meetingheld at Stressed Asset Management branch Delhi of the Syndicate Bank (now Canara Bank) on13.01.2020 it was unanimously suggested by the Lenders that instead of withdrawing thecase from DRT possibility may be explored to obtain a consent decree based upon the broadsettlement arrived during the high level meeting dated 29.08.2019.

Further we have not been provided any document to substantiate that the Company hascountered the claim of the consortium banks to takeover Jawahar Vypaar Bhawan forsettlement of liabilities pertaining to the PEC Limited where as it is understood thatthe Company has instead started the process of clearing the title deed of Jawahar VypaarBhawan from L&DO so that transfer can be executed in favor of the Bank.

Considering the provisions of the Companies Act 2013 and the fact that 10%shareholding of STC is held by public at large the decision of Ministry of taking overthe liability of PEC amounting to Rs 1390.01 Crores by STC in the meeting held on29/08/2019 are in contravention to section 180 and 186 of the Companies Act 2013 andwould also be prejudicial to the interest of the minority shareholders which is public atlarge because STC by taking the liability is not gaining in any manner and this will alsobe contrary to the settled accounting principles because the liability is being fastenedon the company without any corresponding asset. We are of the considered opinion that thedecision taken in the meeting held on 29/08/2019 and insistence of the bankers tosell/transfer the Jawahar Vyapaar Bhawan for settlement of remaining liabilities of theCompany along with PEC's debts in the consortium meeting held on 13.01.2020 is prejudicialto the interest of the minority shareholders and is taken without following due process oflaw is not in the interest of the company and its members and is also contrary to thecorporate structure envisaged under the provisions of the Companies Act 2013. Suchdecision taken without the consent of the shareholders firstly by not convening meetingof the members is also affecting adversely the fundamental of the company being itsability to continue as a going concern.

ii. Refer note no. 54 for non-availability of confirmation of balances of certainreceivables and payables (including certain direct & indirect taxes).

iii. Refer foot note no. (b) of note no 4 for non adjustment of value/area in FixedAssets Register against areas acquired by DMRC for construction of Metro Station& byL&DO for widening of the Road during Asian Game as well as the flats/area of landsold by the company to HHEC for its Housing colony.

iv. Refer note no. 9 11 & 39 for not making credit impairment of trade receivablesRs. 973.19 Crore & Claim Receivables Rs. 6.78 Crore making a total of Rs. 979.97crore since the company feels that even if no amount would eventually be recoveredprovision is not required as the creditor will be paid by the company only to the extentthe amount is realized against such trade receivables though in most of the casesagreements are not tripartite.

Further in case of M/s Rajat Pharmaceuticals Ltd (RPL) who drew bills of exchange onSTC which were accepted upon receipt of overseas buyer's pre-acceptance to STC's bills ofexchange. However the foreign buyers defaulted in making payments against the exportbills and have gone into liquidation. A sum of Rs.527.86 crores has been admitted by theliquidator of one of the foreign buyer's i.e. Loben Trading Co. Pte. Ltd Singapore. ADecree of Rs 62.47 Crs. approx. has been passed by Hon'ble Bombay High Court in favour ofSTC against the dues from another foreign buyer i.e Sweetland Trading Pte Ltd. Singapore.As of current date RPL has gone into liquidation and official liquidator is appointed byHon'ble High Court Bombay. The matter is also under investigation by CBI. Banks &Financial institution have filed legal suit against RPL before DRT making STC also a partyto the case claiming Rs. 476.47 Crore.

Further refer to note 39 "Major Legal Cases (Trade Receivables)" formatters other than RPL as all these matters are sub-judice and/or under investigation ofCBI we are unable to comment upon the same.

v. Refer foot note to note no. 24 Customer at credit includes amount payable to U.PGovernment amounting to Rs 6.03 Crores. As informed by the Branch management Branch hasmade various other claims on U.P Government and accordingly dues of Rs. 39.11 Crores isrecoverable from U.P Government for which debit note dated March 10 2014 was raised.However the said claim was not recognised in the financial statements of the branch tilldate as its ultimate collection was not certain. In absence of information onacceptability of the said claim by UP Government we are unable to ascertain its possibleimpact if any on the financial statement of the Company.

As a result of matters contained in paras (a) (i) to (vi) above loss for the year isunderstated by Rs. 231.27 crore with consequential effect on 'Retained earnings' by thesame amount understatement of 'liabilities' by Rs.141.22 crore and overstatement of claimrecoverable by Rs. 90.05 crore.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial 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 Companies Act 2013 and we have fulfilledour other ethical responsibilities in accordance with these requirements and the ICAI'sCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for opinion (including the basis for the qualifiedopinion).

Emphasis of Matters:

a. Refer note 38(ii) "Contingent Liabilities which includes an amount of Rs. 1.30Crores in respect of pending sales tax liability. The Company has not complied in carryingout corrective actions as suggested by Government Audit Party (GAP) for F.Y. 2014-15 inthe accounts as on 31st March 2016 and for F.Y. 2015-16 in the accounts as on 31st March2017 amounting to Rs. 0.19 Crores and Rs. 1.11 Crores respectively.

b. In respect of litigation matters their present status and provisioning if anyrequired and on-going investigations into the alleged irregularities; further theCompany's past operations have exposed it to the risk of extensive litigation andcontractual claims from third parties with increased litigation costs not fully providedfor. Due to the range of potential outcomes and the significant uncertainty around theresolution of various claims the amount of ultimate liabilities if any to be recordedin the financial statements as a provision is not ascertainable and hence it is concludedthat it was appropriate to include an Emphasis of Matter related to these uncertainties.

c. Refer note no 48(b) wherein one of the Investment "NSS Satpura AgroDevelopment Company Limited" of the Company in the Financial Statement has a statusof "striked-off" as per the data available at the Ministry of Corporate Affairs.The impact though immaterial of the same hasn't been undertaken by the Company in itsFinancial Statement.

Our opinion is not modified in respect of these matter

Material Uncertainty related to Going Concern:

The Company has incurred a net loss of Rs.879.45 crore during the year ended March312019 and Rs. 112.84 crores during the year ended March 312020 and as of that datethe Company's liquidity position is not strong enough as is evident from the fact that thecurrent liabilities exceeded its Current assets by Rs 922.68 crore and (the fact thatequity shows a positive figure only on account of revaluation reserve). Also consideringthe high value of Contingent Liability amounting to Rs. 825.84 Crores significantdecrease in the sales volume of the company and the matter of continuous losses andnegative net current assets there could be material uncertainty for the company tocontinue as going concern. However in spite of these events or conditions which may casta doubt on the ability of the company to continue as a going concern the management is ofthe opinion that going concern basis of accounting is appropriate having regard to thefacts mentioned in Note No. 55.

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 informing our opinion thereon and we do not provide a separate opinion on these matters. Inaddition to the matters described in the basis for qualified opinion section we havedetermined the matters described below to be the key audit Matters to be communicated inour report.

1. Accuracy of recognition presentation and disclosures of revenues and other relatedbalances in view of adoption of Ind AS 115 "Revenue from contracts withcustomers" (new revenue accounting standard)

The application of the new revenue accounting standard involves certain key judgmentsrelating to identification of distinct performance obligations determination of price ofthe identified performance obligations the appropriateness of the basis used to measurerevenue recognized over the period. Additionally new revenue accounting standard containsdisclosures which involve collation of information in respect of disaggregated revenue andperiods over which the remaining performance obligations will be satisfied subsequent tothe balance sheet date.

Principal Audit Procedures followed:

We assessed the Company's process to identify the impact of adoption of the new revenueaccounting standard.

Our audit approach consisted testing of the design and operating effectiveness of theinternal controls and substantive testing as follows:

• Evaluated design of internal control relating to the implementation of the newrevenue accounting standard.

• Selected sample for continuing and new contracts and tested the operatingeffectiveness of the internal control relating to identification of the distinctperformance obligations and determination of transaction price. We carried out combinationof procedures involving enquiry and observation re-performance and inspection of evidencein respect of operation of these con trolls.

• Tested the relevant information technology systems' access and change managementcontrols relating to contracts and related information used in recording and disclosingrevenue in accordance with the new revenue accounting standard.

• Selected a sample of continuing and new contracts and performed the followingprocedures:

• Read analyzed and identified the distinct performance obligations in thesecontracts.

• Compared these performance obligations with these identified by the company.

• Considered terms of the contract to determine the transaction price includingany variable consideration to verify the transaction price used to compute revenue and totest the basis of estimation of the variable consideration.

• Samples in respect of revenue were tested with the performance obligationsspecified in the underlying contracts.

• Performed analytical procedures for reasonableness of revenue disclosed by typeand service offerings.

• We reviewed the collation of information and the logic of the report generatedfrom the budgeting system used to prepare the disclosure relating to the periods overwhich the remaining performance obligations will be satisfied subsequent to the balancesheet date.

2. Evaluation of uncertain tax position :

The company has uncertain material tax provisions including matters under dispute whichinvolves significant judgment to determine the possible outcomes of these disputes.

Principal Audit procedures followed:

We evaluated management's judgment of tax risks estimates of tax exposures andcontingencies by testing the design implementation and operating effectiveness of therelated controls. We obtained details of completed tax assessments and demands for theyear ended March 312020 from management. We involved in the detailed discussions with themanagement for underlying assumptions in estimating the tax provision and the possibleoutcome of the disputes. Our team also considered legal precedence and other rulings inevaluating management's position on these uncertain tax positions as at April 1 2019 toevaluate whether any change was required to management's position on these uncertainties.

3. Adoption of Ind AS 116 - Leases:

The Company has adopted Ind AS 116 Leases (Ind AS 116) in the current year. Theapplication and transition to this accounting standard is complex and is an area of focusin our audit since the Company has a large number of leases with different contractualterms.

Ind AS 116 introduces a new lease accounting model wherein lessees are required torecognise a right-of-use (ROU) asset and a lease liability arising from a lease on thebalance sheet. The lease liabilities are initially measured by discounting future leasepayments during the lease term as per the contract/ arrangement. Adoption of the standardinvolves significant judgements and estimates including determination of the discountrates and the lease term. Additionally the standard mandates detailed disclosures inrespect of transition. Refer Note 3.6 and Note 4 to the financial statements.

However audit addressed the key audit matter Our audit procedures on adoption of Ind AS116 include:

• Assessed and tested new processes and controls in respect of the leaseaccounting standard (Ind AS 116);

• Assessed the Company's Evaluation on the identification of leases based on thecontractual agreements and over knowledge of the business;

• Involved our specialists to evaluate the reasonableness of the discount ratesapplied in determining the lease liabilities;

• Upon transition as at 1st April 2019:

• Evaluated the method of transition and related adjustments;

• Tested completeness of the lease data by reconciling the Group's operating leasecommitments to data used in computing ROU asset and the lease liabilities.

• On statistical samples we performed the following procedures:

• Assessed the key terms and condition of each lease with the underlying leasecontracts; and

• Evaluated computation of lease liabilities and challenged the key estimates suchas discount rates and the lease term.

• Assessed and tested the presentation and disclosures relating to Ind AS 116including disclosures relating to transition.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance (changes in equity) and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. 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 implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatement that give a true and fair view and are free from material misstatement whetherdue 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. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the 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 financial statements.

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

• Identified and assessed the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtained an understanding of internal financial controls relevant to the auditin 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.

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

• Concluded 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.

• Evaluated the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 Matters

We did not audit the financial statements of 5 Branches included in the standalonefinancial statements of the Company whose financial statements reflect total assets of Rs.236.14 Crores as at 31st March 2020 and Gross total revenues of Rs. 1824.74 Crores forthe year ended on that date as considered in the standalone financial statements. Thefinancial statements of these branches have been audited by the branch auditors whosereports have been furnished to us and our opinion in so far as it relates to the amountsand disclosures included in respect of these branches is based solely on the report ofsuch branch auditors. Our opinion is not modified in respect of this matter.

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 Companies Act 2013 we give in the Annexure "A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report that:

i. We have sought and obtained all the information and explanations except for thematters referred in "Basis for Qualified Opinion" which to the best of ourknowledge and belief were necessary for the purposes of our audit

ii. In our opinion proper books of account as required by law have been kept by thegroup except for the matters referred in "Basis for Qualified Opinion" so faras it appears from our examination of those books and proper returns adequate for thepurposes of our audit have been received from the branches not visited by us.

iii. 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.

iv. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account and with the accountsreceived from the branches not visited by us.

v. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards except for the para (b) of Basis for Qualified opinion specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

vi. The going concern matter described under "Material uncertainty in relation toGoing Concern" paragraph above in our opinion may have an adverse effect on thefunctioning of the company.

vii. We have been informed that the provisions of Section 164(2) of the Act in respectof disqualification of directors are not applicable to the Company being a Governmentcompany in terms of notification no. G.S.R.463 (E) dated 5th June 2015 issued by Ministryof Corporate Affairs Government of India;

viii. 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 B".

ix. As informed the provisions of Section 197 relating to managerial remuneration arenot applicable to the Company being a Government Company in terms of MCA Notificationno. G.S.R. 463 (E) dated 5th June 2015.

x. 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:

a. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements refer note 38 & 39 to the financial statements.

b. The Company has made provision as required under the applicable law or IndianAccounting Standards for material foreseeable losses if any on long-term contractsincluding derivative contracts.

c. No case is identified for delay in transferring amounts required to be transferredto the Investor Education and Protection Fund (IEPF) by the Company during the periodunder review.

3. We are enclosing our report in terms of Section 143 (5) of the Act on thedirections and sub-directions issued by the Comptroller and Auditor General of India onthe basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us in Annexure- C.

For and on behalf of HDSG & Associates
Chartered Accountants
Firm Reg. No. 002871N
Arun Saini
Partner
M.No. 082070
Place: New Delhi
Date: 27.07.2020
UDIN: 20082070AAAAAM6735

annexure 'A' to independent auditors' report

The State Trading Corporation of India Ltd.

Referred to in Paragraph 1 under the heading of "Report on Other Legal andRegulatory

Requirements" of our report of even date

1. Fixed Assets

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. However the records are not updatedfor the financial year under audit and except for the areas of lease hold land andbuilding of Jawahar Vayapar Bhawan at Janpath New Delhi and Housing Colony at AurbindoMarg New Delhi (refer foot note no.4). Therefore we are not in a position to commentupon the same.

b) The company has a Programme of verification to cover all the items of fixed assetsin a phased manner which in our opinion is reasonable having regard to the size of thecompany and the nature of its assets. However the fixed assets have not been physicallyverified by the management during the year under audit due to Covid-19 (refer note no53(i)). Therefore we are not in a position to comment upon whether there are anydiscrepancies.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except for immovable properties referred below whose titledeeds are pending for execution in the company:

Location Description Area Audit observations Gross Block/ Revalued amount (' in Crore)
New Delhi Lease hold Land at Tolstoy Marg Jawahar Vayapar Bhawan New Delhi. 2.599 Acre Execution of lease deed is pending since 1975. Further out of total area physical position of land measuring 714.60 sqmtrs is not now with STC ( i.e. 388.91 sqmtrs. acquired by DMRC for construction of Metro and 325.69 sqmtrs. by NDMC for widening of the Road during Asian Game) and value the same has not been updated in FAR / FAS. Measurement for area under physical position is yet to be done. 431.77
New Delhi STC / MMTC Housing Colony Aurobindo Marg New Delhi 16.17 Acre Execution of lease deed (for 50% share of total land measuring 32.33 acre) allotted for housing colony is still pending. Further records / details for area given by STC from its own share to HHEC for its housing colony is to be adjusted in the FAR / FAS. Measurement for area under physical position of the company is yet to be done. 116.56
New Delhi Flats at AGVC Khel Gaon Marg New Delhi. 8 Flats (measuring 14424 sqfts) Execution of lease / conveyance deed is still pending. 25.28
Mumbai 7 nos. of Flats (refer foot note of note no.4) 7997 sqfts. Execution of lease / conveyance deed is still pending. 33.19

2. Inventories:

According to information and explanations given to us physical verification ofinventories is done by the management at a reasonable interval along with the inventorieslying with third parties and pledge stock have been physically verified through surveyorfrom time to time. However the same has not been physically verified during the year dueto Covid-19 (refer note no 53(ii)). Therefore we are not in a position to comment whethermaterial discrepancies are there or not.

3. According to information and explanations given to us the Company has not grantedany loans secured or unsecured to companies firms limited liability partnerships orother parties covered in the register maintained under section 189 of the Companies Act2013 ('the Act'). Accordingly clauses (iii) (a) (b) & (c) of paragraph 3 of theOrder are not applicable to the Company.

4. According to the information and explanations given to us the Company has not givenany loans or made any investments or provided any guarantees or security to the partiescovered under sections 185 and 186 of the Act. Accordingly paragraph 3 (iv) of the Orderis not applicable to the Company.

5. The Company has not accepted any deposits from the public during the year andconsequently the directives issued by Reserve Bank of India the provisions of sections73 to 76 of the Act and rules framed there under are not applicable to the Company.However certain old amounts are outstanding in advances from customers/credit balance incustomer accounts in the nature of deposits which as explained to us is not material andis subject to reconciliation and adjustment if any.

6. As informed by the management the Central Government has not prescribed themaintenance of cost records under section 148 (1) of the Company Act.

7. Statutory Dues :

(a) According to the information and explanations given to us and on the basis of ourexamination of the books of account un-disputed statutory dues including provident fundemployees' state insurance income-tax sales-tax goods and service tax service taxduty of customs duty of excise value added tax cess and other statutory dues havegenerally been deposited regularly with the appropriate authorities within the due dateexcept in the case of professional tax of Rs. 0.004 crore of Mumbai Branch which areoutstanding for more than six months as on balance sheet date from the date they becamepayable.

(b) According to the information and explanations given to us and as per books ofaccount there are dues outstanding of Sales Tax Wealth Tax Custom Duty Excise Duty Value Added Tax Service Tax Goods & Service Tax and Cess which have not beendeposited as on 31st March 2020 by the company on account of any dispute are as under :

Name of the statute Nature of dues Amount (Rs. in Crore) Period to which the amount relates Forum where dispute is pending
income Tax
Income Tax Act Income Tax 1.73 2008-09 DCIT (A) Delhi
Income Tax Act Income Tax 0.86 2010-11 ITAT Delhi
Income Tax Act Income Tax 3.00 2011-12 ITAT Delhi
Income Tax Act Income Tax 1.19 2012-13 ITAT Delhi
Income Tax Act Income Tax 1.90 2013-14 ITAT Delhi
Income Tax Act Income Tax 0.08 2016-17 CIT(A) Delhi
Sales Tax & Custom Duty
TNGST/AST/CST Sales Tax 0.83 1974-75 1975-76 1985-86 to 1987-88 1989-90 & 1991-92 Hon'ble Madras High Court
Sales Tax Sales Tax 0.50 1986-87 Kerela High Court
Central Sales Tax Act Central Sales Tax 0.01 1987-88 Appellate Tribunal
Custom Act Custom Duty 4.16 2017-18 CESTAT
Custom Act Custom Duty 1.69 2011-12 CESTAT
Custom Act Custom Duty 0.06 Commissioner Appeal
Bihar Sales Tax Act Sales Tax 0.01 1989-90 Sales Tax Appellate Tribunal
Orissa Sales Tax Act Sales Tax 0.01 1988-89 Commissioner (Appeals) Orissa
Central Sales Tax Act Central Sales Tax 0.02 1993-94 to 1995-96 Hon'ble Assam High Court
Central Sales Tax Act Central Sales Tax 0.23 2003-04 Joint Commissioner Sales Tax
West Bengal Vat Act / Central Sales Tax Act Vat & CST 0.02 2011-12 (A.Y.) Joint Commissioner Commercial Tax
Maharashtra Sales Tax Act Sales Tax 0.69 1992-93 & 1996-97 Maharashtra Sales Tax Tribunal
Maharashtra Sales Tax Act BST CST & MVAT 47.48 1993-94 2000-01 2003-04 & 2006-07 Joint Commissioner Sales Tax
Maharashtra Sales Tax Act BST CST & MVAT 389.92* 2004-05 2009-10 & 2011-12 Joint Commissioner Sales Tax
Maharashtra Sales Tax Act CST 0.50* 2008-09 Maharashtra Sales Tax Tribunal
Maharashtra Sales Tax Act TDS on Work Contract 0.21* 2012-13 Sales Tax Appellate Tribunal Mumbai
Service Tax
Finance Act 1994 Service Tax 4.37** 01.04.12-31.03.15 CESTAT
Finance Act 1994 Service Tax 7.29 2005-06 & 2006-07 CESTAT (Stay Granted)
Finance Act 1994 Service Tax 6.02 2007-08 to 2016-17 CESTAT
Finance Act 1994 Service Tax 0.13@ 01.04.2011 to 31.03.2012 Service Tax Appellate Tribunal Mumbai
Finance Act 1994 Service Tax 24.72 01.10.04 to 31.03.11 Supreme Court Delhi
Finance Act 1994 Service Tax 1.24# 01.04.2015 to 30.06.2017 Joint Commissioner of CGST & Central Excise Mumbai
Certificate Dues Liability
BPDRA Certificate Dues Liability 0.06 1971-72 1976-77 to 1978-79 Concerned Department

* A stay order has been received against the amount disputed

** The Company has received an order in original vide order of Principal Commissionerof CGST & Central Excise Mumbai South against which Company has filed appeal withthe Custom Excise and Service Tax Appellate Tribunal (CESTAT)

@ The appeal filed by the Company against Service Tax Appellate Authority Mumbai isrejected and the Company has contested the order of Service Tax Appellate Authority withService Tax Appellate Tribunal

# The Company has received a show-cause notice for levy of Service Tax under businessauxiliary service category. Being similar nature of matter being contested by the Companyfor earlier years with the appropriate authorities the Company has requested service taxauthorities to keep the assessment proceedings on hold till disposal of matters forearlier years.

8. According to information and explanations given to us the Company has defaulted inthe repayments of Loans/ Borrowings of Banks (refer note 20 & Qualified Opinion Paraof our report). However the company does not have loans/borrowings from financialinstitution or Government or dues to Debenture Holders. The lender-wise details of amountand period of defaults are as under :

Name of the Banks Amount of installment and interest overdue## Due date of payments Payments status as on balance sheet date Period of Delay (in days)
Syndicate Bank 280.71 Overdue ## 731
Indian Overseas bank 188.02 Overdue ## 731
Union Bank of India 140.72 Overdue ## 762
Indian Bank 94.81 Overdue ## 762
Exim Bank 74.43 Overdue ## 731
Bank of Baroda 26.27 Overdue ## 650
UBI (Kumily) 1.28 Overdue ## 762

## Balances are after adjustment of a lump sum payment of Rs. 1100/- crore made by thecompany to lead banker of Joint Lender Forum Banks for settlement.

9. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) and hence the application of such money forspecified purposes is not applicable.

10. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit except for all the cases which have been reported elsewhere in thefinancial statements.

11. As informed the provisions of Section 197 relating to managerial remuneration arenot applicable to the Company being a Government Company in terms of MCA Notificationno. G.S.R. 463 (E) dated 5th June 2015.

12. The company is not a Nidhi Company and hence the clause is not applicable.

13. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable. The details of RelatedParties Transactions have been disclosed in the Financial Statement as required by theapplicable Ind AS (refer note no.47).

14. The Company has not made any preferential allotment or private placement of sharesor fully or portly convertible debentures during the year.

15. As per records of the company and according to the information and explanationsgiven to us the Company has not entered into non -cash transactions with Directors orPersons connected with him and hence the clause is not applicable.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For and on behalf of
HDSG & Associates
Chartered Accountants
Firm Reg. No. 002871N
Arun Saini
Partner
M.No. 082070
Place: New Delhi
Date: 27.07.2020
UDIN: 20082070AAAAAM6735

"Annexure B" to INDEPENDENT AUDITOR'S REPORT

The State Trading Corporation of India Ltd New Delhi

Referred to Clause (viii) of Paragraph 2 under the heading of "Report on otherLegal and Regulatory Requirements" of our report of even date on Standalone FinancialStatements for the year ended 31st March 2020

We have audited the internal financial controls over financial reporting of TheState Trading Corporation of India Limited ("the Company") as on 31st March2020 in conjunction with our audit of the standalone 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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting (IFCFR)

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified Opinion

i. Company is maintaining Accounts in Tally ERP Software. However the Tally ERPSoftware on which accounts are being maintained by the Branches and Divisions are notintegrated/ interfaced with the each other or with the server at Head office. FurtherInventories and Consumables except for Bullion are not being maintained on the TallyERP instead it is maintained manually.

Further company is maintaining "Performance Management System" PayrollSoftware and "Leave Management System" which are not interfaced with each otheras well as the accounting software.

As a result of above Manual Accounting entries are being made on periodical basis inthe Tally ERP Accounting software and consolidation of the Financial Statements/Accountsof various Branches and Divisions which are made in MS-Excel.

ii. Lack of control over release of advance to parties 'incomparison with the targetedperformance / milestone to be provided by the parties. For Instance in the case ofinstallation of 5 Lifts advance given by the company against all the 5 lifts out ofwhich 4 lifts are still under installation even after long delay from the scheduled date.

iii. Lack of effective Internal control over inventory pledged with the company as inmost of the cases periodic physical verification reports have not been submitted by theparties and in certain cases parties are not allowing STC to conduct the physicalverification.

iv. In certain cases reconciliations of receivables & payables are pending sincelong. As informed to us Bankers got receivable audit done during the year under audit thereport of which has not been shared with us. Thus the impact of same is neither considerednor verifiable.

v. With respect to Mumbai branch of the Company the Branch auditor has reported forthe inadequate internal audit system weakness in the system of customer acceptancecredit evaluation and establishing customer credit limits inventory managementsafeguarding of assets including execution of conveyance of immovable properties/ leaseagreements and assets lying in flats assigned to employees needs to be strengthen andother related controls are not in place.

vi. Lack of Control over legal expenses due to nonmaintenance of proper records showingcase wise and advocate wise details.

vii. Delay in replying to the comments of the internal auditor as mentioned in hisAudit Report.

viii. Manner of maintenance of the Fixed Asset Schedule and Register to be strengthened

ix. Non-availability of requisite information and documentations in respect of oldoutstanding security deposits EMDs advances and other deposits received and paid.

x. Lack of control over the renewal of Rent/lease Agreements on timely basis.

xi. Lack of control over contingent liability and contingent assets due tonon-maintenance of proper records showing fact of the case latest status of the case andprobability of expected outcome in the opinion of management.

A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the Company's annual or interim financial statements willnot be prevented or detected on a timely basis.

Qualified Opinion

In our opinion the Company has except for effects of the material weaknessesdescribed above on achievement of the objectives of the control criteria in all materialrespects an adequate internal financial controls system over financial reporting and suchinternal financial controls over financial reporting were operating effectively as at 31stMarch 2020 based on the internal control over financial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.

We have to the extent possible considered the material weaknesses identified andreported above in determining the nature timing and extent of audit tests applied in ouraudit of the March 312020 standalone Ind AS financial statements of the Company andthese material weaknesses are not likely to affect our opinion on the standalone financialstatements of the Company.

Other Matters

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls over financial reporting insofar as itrelates to Branches at Ahmedabad Bangalore Chennai Kolkata and Mumbai is based on thecorresponding reports of the auditors of such branches and management replies to theobservations of the branch auditors.

For and on behalf of
HDSG & Associates
Chartered Accountants
Firm Reg. No. 002871N
Arun Saini
Partner
M.No. 082070
Place: New Delhi
Date: 27.07.2020
UDIN: 20082070AAAAAM6735

Annexure-'C' to the INDEPENDENT AUDITORS' REPOR

The State Trading Corporation of India Ltd New Delhi

Referred Paragraph 3 under the heading of "Report on other Legal and RegulatoryRequirements" of our report of even date on Standalone Financial Statements for theyear ended 31st March 2020

1 Whether the company has system in place to process all the accounting transactions through IT System? If yes the processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications if any may be stated. a. Company is maintaining accounts in Tally ERP Software. However the Tally ERP Software on which accounts are being maintained by the branches as well as by the head office including all divisions is not integrated with the each other. As a result of this compilation of accounts of all branches & divisions are made on excel sheet manually at the year end.
b. Further stock of inventories and consumables except for bullion are not being routed through IT System. Hence periodic manual entries are being made in the accounting software.
c. Company is maintaining software for Performance management system (PMS) Payroll software and leave management system which are not interfaced with each other as well as with Accounting Software. As a result of this manual entries are being made on periodic basis in the respective software as well as in accounting software.
2 Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/loans/interest etc. made by the lender to the company due to company's inability to repay the loan? The company is in the process of "one time settlement" (OTS) with the Lender Banks for the dues of banks for which Company is in continuing default. Impact if any on OTS will be accounted for on its completion. (Refer notes to account and Qualified Opinion Para of our Audit Report).
3 Whether the fund received/receivable for specific schemes from Central/State agencies were properly accounted for/ utilized as per its terms and condition? List of cases of deviation. As per information & explanation given to us the Company has not received any fund under any scheme of the Central/State Government during the year under report.
For and on behalf of
HDSG & Associates
Chartered Accountants
Firm Reg. No. 002871N
Sd/-
Arun Saini
Partner
M.No. 082070
Place: New Delhi
Date: 27.07.2020
UDIN: 20082070AAAAAM6735

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