Ashok Leyland Ltd Directors Report.

To the Members of Ashok Leyland Limited

Report on the audit of the Standalone Ind AS financial statements

Opinion

1. We have audited the accompanying Standalone Ind AS financial statements of Ashok Leyland Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2020, and the Statement of Profit and Loss (including Other Comprehensive Loss), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2020, and Total Comprehensive Income (comprising of profit and other comprehensive loss), changes in equity and its cash flows for the year then ended.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Ind AS Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Standalone Ind AS financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

4. We draw your attention to Note 3.19 of the Standalone Ind AS financial statement which explains the uncertainties and the managements assessment of the financial impact due to lockdowns and other restrictions and conditions related to the COVID - 19 pandemic situation, for which a definitive assessment of the impact in the subsequent period is highly dependent upon circumstances as they evolve.

Our opinion is not modified in respect of this matter.

Key audit matters

5. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Ind As financial statements of the current period. These matters were addressed in the context of our audit of the Standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter description How our audit addressed the key audit matter
I. Impairment
a. Carrying value of Investments in equity instruments of subsidiaries, joint ventures and associates As part of our audit, our procedures included the following:

(Refer to Note 1B.17, Note 1B.11 and Note 1C to the Standalone Ind AS financial statements regarding the recognition, valuation and disclosure methods of equity instruments in subsidiaries, joint ventures and associates, ‘Impairment Losses and ‘Critical accounting judgements and key sources of estimation uncertainty respectively)

• We obtained an understanding and assessed the design, implementation and operating effectiveness of managements relevant internal controls to identify whether there are any indicators of impairment and where such indicators exists, the method by which the recoverable amount is determined by the management. Specifically, we focused on management controls to conclude on the appropriateness of future cash flows (including terminal cash flow) and key assumptions used in arriving at the recoverable amount and fair value, as applicable.

In the Standalone Ind AS financial statements of the Company, the gross carrying value of equity investments in subsidiaries, joint ventures and associates is Rs. 3,452.51 crores against which a cumulative provision for impairment of Rs. 1,025.29 crores is outstanding as at March 31, 2020. • We evaluated the following:
Determination of carrying value of investments is a key audit matter as the amounts are significant to the financial statements and the determination of recoverable value and/or impairment assessment involves significant management judgement. - terminal growth rate by comparing with the long-term outlook based on the relevant macroeconomic outlook for the geography in which the entities are operating.
The key inputs and judgements involved in the model for impairment assessment of investments include future cash flows of the respective entities, the discount rate and the long-term growth rates used. - discount rate by comparing it with an independently calculated discount rate.
- budgets considering growth and other cash flow projections provided by the Companys management and compared these with the actual results of earlier years to assess the appropriateness of forecast.
- the competence, capabilities and objectivity of the managements expert involved in the valuation process.

 

b. Fair value of investment in other equity instruments • We along with the auditors experts evaluated the appropriateness of the measurement model and reasonableness of key assumptions like terminal growth rate, discount rate.
(Refer to Note 1B.17 and Note 1C to the Standalone Ind AS financial statements regarding the recognition, valuation and disclosure methods of equity instruments in others and ‘Critical accounting judgements and key sources of estimation uncertainty respectively) • We performed sensitivity tests on the model by analysing the impact of using other possible growth rates and discount rates within a reasonable and foreseeable range.
In the Standalone Ind AS financial statements of the Company, equity investments in others is Rs. 203.21 crores valued at fair value on a recurring basis, and where no listed price in an active market is available. • We evaluated the adequacy of the disclosures made in the Standalone Ind AS financial statements.
The valuation of these other equity instruments is a key audit matter as the determination of fair value involves significant management judgement as no active market, observable inputs are available. • Based on the above procedures performed, we did not identify any significant exceptions in the managements assessment in relation to the carrying value of equity investments in subsidiaries, joint venture, and associates; carrying value of net assets of LCV business; and that of fair value of investment in other equity instruments.
The key inputs and judgements involved in the model for fair value assessment of investments include future cash flows of the respective entities, the discount rate and the long-term growth rates used.
c. Carrying value of the net assets of cash generating unit (including goodwill) of Light Commercial Vehicle business
(Refer to Note 1B.11 and Note 1C to the Standalone Ind AS financial statements regarding the ‘Impairment Losses and ‘Critical accounting judgements and key sources of estimation uncertainty on the recognition, valuation and disclosure methods respectively)
In the Standalone Ind AS financial statements of the Company, the carrying value of net assets of cash generating unit (including goodwill) of the Light Commercial Vehicle business (‘LCV) is Rs. 690.65 crores as at March 31, 2020.
As per Ind AS 36, Impairment of Assets, the Company is required to assess annually impairment of goodwill acquired in business combination.
The carrying value of net assets of cash generating unit (including goodwill) of LCV business is a key audit matter due to the amount involved and the underlying complexity of the measurement model.
The key inputs and judgements involved in the carrying value assessment of LCV business include future cash flows of the business, the discount rate and the long-term growth rates used.
II. Assessment of provision for warranty obligations
(Refer to Note 1B.14, Note 1.20, Note 1.29 and Note 1C to the Standalone Ind AS financial statements regarding the ‘Provisions– Warranties for recognition and valuation methods, Non-Current Provisions and Current Provisions respectively, and ‘Critical accounting judgements and key sources of estimation uncertainty – Provision for product warranty respectively) As part of our audit, our procedures included the following:
• We obtained an understanding and assessed the design, implementation and operating effectiveness of managements relevant internal controls with regards to the appropriateness of recording of warranty claims, provisioning of warranty, and the periodic review of provision created.
In the Standalone Ind AS financial statements, the Company has recognised a provision of Rs. 312.76 crores for warranty obligations as on March 31, 2020. • We also involved our auditors specialist to verify the appropriateness of the process and controls around IT systems as established by the management. Specifically, we focused on controls around periodic review of warranty provision and that around the appropriateness and adequacy of provision.

 

We determined this matter as key audit matter since the product warranty obligations and estimations thereof are determined by management using a model which incorporates historical information on the type of product, nature, frequency and average cost of warranty claims, the estimates regarding possible future incidences of product failures and discount rate. Changes in estimated frequency and amount of future warranty claims can materially affect warranty expenses. • We evaluated the model used by the management for provisioning of warranty to evaluate on the appropriateness of the methodology followed by the management and the mathematical accuracy of the model. To this effect we evaluated the following:
- the inputs to the model were verified on a sample basis with historical cost inputs on actual claims incurred and historical sales data of the Company.
- we compared the amount of provisions from prior year with actual claims processed during the period, in order to verify the reasonableness of the forecast.
- the discount rate used for arriving at the present value of obligation was verified for reasonableness and the mathematical accuracy of the present value of the obligation was verified.
Based on the above procedures performed, we consider the provision for warranty obligations to be reasonable.

III. Capitalisation of Internally Generated Intangible Assets (ITA) and Intangible Under Development (ITUD):

(Refer to Note 1B.10, Note 1B.11, and Note 1C to the Standalone Ind AS financial statements regarding the recognition, amortisation of Intangible Asset, ‘Impairment Losses and ‘Critical accounting judgements and key sources of estimation uncertainty respectively) As part of our audit, our procedures included the following:
The Company has capitalised Rs. 655.37 crores of intangibles (developed technical knowhow) during the year and has an amount of Rs. 173.17 crores under development as at March 31, 2020 for new vehicle technology relating to design, emission and other intangible assets. • We obtained an understanding and assessed the design, implementation and operating effectiveness of relevant internal controls with regard to the classification of development expenditure and their capitalisation and evaluation of impairment for internally generated intangible assets;
The appropriateness of ITA and ITUD capitalised is a key audit matter due the judgement involved in assessing if the cost meets the capitalisation criteria, dependency of the business on the assets capitalised/ under capitalisation and key assumptions used in the measurement model for impairment. • We confirmed that the development projects for intangible assets and its impairment assessment were approved by the committee appointed by the Board;
The measurement model used for review of impairment of these ITA depends largely on managements assessment with regard to the appropriateness of estimated future cash flows and the discount rates used. Hence, there are significant estimates and judgements involved in determining the above. • Tested the capitalisation of project related expenses incurred during the year with underlying documents relating to material costs, directly attributable overheads, designing cost, software expenses, testing charges and employee hours incurred to verify existence and appropriateness of classification of research and development;
• With regard to the impairment assessment model, we evaluated the following:
- discount rate by comparing it with an independently calculated discount rate;
- budgets considering growth and other cash flow projections provided by the Companys management;
- the competence, capabilities and objectivity of the management personnel involved in the valuation process;
• We along with the auditors experts evaluated the appropriateness of the measurement model and reasonableness of key assumption like discount rate.
• We performed sensitivity tests on the model by analysing the impact of using other possible growth rates and discount rates within a reasonable and foreseeable range.
• We evaluated the adequacy of the disclosures made in the Standalone Ind AS financial statements.
• Based on the above procedures performed, we did not identify any significant exceptions in the managements assessment in relation to the capitalisation of ITA and ITUD.

Other Information

6. The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report (i.e. Boards report, Report on Corporate Governance and Management Discussion and Analysis Report) but does not include the Standalone Ind AS financial statements and our auditors report thereon.

Our opinion on the Standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the Standalone Ind AS financial statements

7. The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

8. In preparing the Standalone Ind AS financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors responsibilities for the audit of the Standalone Ind AS financial statements

9. Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Ind AS financial statements.

10. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to Standalone Ind AS financial statements in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Ind AS 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 auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Standalone Ind AS financial statements, including the disclosures, and whether the Standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

11. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

12. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

13. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

14. As required by the Companies (Auditors Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

15. 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 best of 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 the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive loss), the Statement of Changes in Equity and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March 31, 2020 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2020 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A".

(g) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its Standalone Ind AS financial statements– Refer Note 3.9 to the Standalone Ind AS financial statements;

(ii) The Company has long-term contracts including derivative contracts as at March 31, 2020 for which there were no material foreseeable losses;

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;

(iv) The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2020.

16. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

For Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number: 304026E/E-300009 Chartered Accountants

ANNEXURE A TO INDEPENDENT AUDITORS REPORT

Referred to in paragraph 15 [f] of the Independent Auditors Report of even date to the members of Ashok Leyland Limited on the Standalone Ind AS financial statements as of and for the year ended March 31, 2020

Report on the Internal Financial Controls with reference to financial statements under Clause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financial statements of Ashok Leyland Company ("the Company") as of March 31, 2020 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

2. The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

3. Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. A companys internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls with reference to financial statements includes those policies and procedures that

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

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financial statements

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

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2020, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. (Also refer paragraph 4 of the Independent Auditors Report)

ANNEXURE B TO INDEPENDENT AUDITORS REPORT

Referred to in paragraph 14 of the Independent Auditors Report of even date to the members of Ashok Leyland Limited on the Standalone Ind AS financial statements as of and for the year ended March 31, 2020

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets (Property, plant and equipment and Intangible Assets).

(b) The Property, plant and equipment are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the property, plant and equipment has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us, the title deeds of immovable properties, as disclosed in Note 1.1 on Property, plant and equipment and Note 1.1A on Right-of-use asset to the Standalone Ind AS financial statements, are held in the name of the Company, except for as stated in Sub Notes 1, 2 and 7 to Note 1.1 and in Note 1.1A to the Standalone Ind AS financial statements.

ii. The physical verification of inventory excluding stocks with third parties have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them.

The discrepancies noticed on physical verification of inventory as compared to book and records were not material and have been appropriately dealt with in the books of accounts.

iii. The Company has granted unsecured loans, to a subsidiary and to a company covered in the register maintained under Section 189 of the Act. The Company has not granted any secured/ unsecured loans to firms /LLPs/ other parties covered in the register maintained under Section 189 of the Act.

(a) In respect of the aforesaid loans, the terms and conditions under which such loans were granted are not prejudicial to the Companys interest.

(b) In respect of the aforesaid loans, the schedule of repayment of principal and payment of interest has been stipulated, and the parties are repaying the principal amounts, as stipulated, and are also regular in payment of interest as applicable.

(c) In respect of the aforesaid loans, there is no amount which is overdue for more than ninety days.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues, including provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax and other material statutory dues, as applicable, with the appropriate authorities. Also refer note 3.9 to the financial statements regarding managements assessment on certain matters relating to provident fund.

Further, for the period March 1, 2020 to March 31, 2020, the Company has paid Goods and Service Tax and filed GSTR 3B (after the due date but) within the timelines allowed by (Central Board of Indirect Taxes and Customs (CBEC) under the Notification Number. 31/2020 dated April 03, 2020 on fulfilment of conditions specified therein.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income-tax and goods and service tax, which have not been deposited on account of any dispute. The particulars of dues of sales tax, service tax, duty of customs, duty of excise, value added tax, as at March 31,

2020 which have not been deposited on account of a dispute, are as follows:

Name of Statute Nature of Dues Amount (in crores) Period to which the amount relates Forum where the dispute is pending
State and Central Sales Tax Act Sales tax and Value added 335.93 Various periods from 1985 - 2017 Appellate Authority - upto Commissioner Level
111.49 Various periods from 1987 - 2013 Appellate Authority - Tribunal
1.09 Various periods from 2006 - 2011 High Court
Central Excise Act, 1944 Excise duty and Cess thereon 0.13 Various periods from 1993 - 2016 Appellate Authority - upto Commissioner Level
3.15 Various periods from 1996 - 2014 Appellate Authority - Tribunal
0.45 Various periods from 1996 - 2014 High Court
Customs Act, 1962 Customs Duty 0.02 Various periods from 2006 - 2007 Appellate Authority - Tribunal
Service Tax - Finance Act, 1994 Service Tax and and Cess thereon 58.50 Various periods from 2009 - 2016 Appellate Authority - Tribunal
4.14 Various periods from 2007 - 2016 Appellate Authority- upto Commissioner Level

viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.

ix. In our opinion, and according to the information and explanations given to us, the moneys raised by way of term loans have been applied for the purposes for which they were obtained. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments).

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. The Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.