hindustan aeronautics ltd Auditors report

To The Members of Hindustan Aeronautics Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of Hindustan Aeronautics Limited ("the Company") which comprise the Balance Sheet as at 31^st March 2023 and the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and Notes to the Standalone Financial Statements, including a summary of Significant Accounting Policies and other explanatory information (hereinafter referred to as "the standalone financial statements" ) in which are included the returns of 29 divisions for the year ended on that date audited by the Division Auditors of the company.

In our opinion, and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023 and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the 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 Financial Statements under the provisions of the Act, and the Rules there under, 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 on the standalone financial statement.

Emphasis of Matter

1) Attention is invited to Notes to the Financial Results extracted below: a) Note:49 (33) (g) COVID-19 Impact

Curr ent year Impact:

The Company has shown normal performance during the year. Hence, there is no impact during the year ended 31^st March 2023.

Anticipated Future Impact:

Based on the information available (internal as well as external) up to the date of approval of this financial result, Company expects to recover the carrying amount of Intangible assets, Inventories, Property, Plant and Equipments, Lease, Financial Instruments, Trade Receivables etc. The Company will continue to closely monitor the developments, the future economic and business outlook and its impact on Companys future financial statements with a view to minimize the Covid impact.

b) Note no :49 (43 G)

Revision of pay scales of executives and workmen, with effect from 01.01.2017 was implemented in accordance with the guidance issued by DPE vide OM dated 03.08.2017 for Executives and in accordance with the Wage Agreement entered into between Management and Employees Union representatives in 2019-20 in respect of Workmen. On an interpretation on pay refixation and pursuant to the directives of the Administrative Ministry, the pay fixation to be revised and the excess amount paid is to be recovered from the employees.

This has resulted in reduction of salaries and wages for the year ended 31 March 2023 by 5155 lakhs (Previous year:

5256 lakhs) and a consequential reduction in sales revenue for the year ended 31 March 2023 by 1239 lakhs (Previous year: 812 lakhs).

While so, the Employees Union and Officers Association have filed Writ Petitions with Honble High Court of Karnataka to stay recovery of excess amount of salary paid by the Company. The Honble High Court has granted interim stay on recoveries, Pending disposal of the writ petitions by the High court, the excess amount is shown under claims recoverable Note No.19 for 29645 lakhs (Previous year 24489 lakhs). Provision has been created for the full liability of 29645 lakhs during the year as a prudential measure in case the issue will be settled in favour of employees.

In r espect of employees who retired prior to 30 June, 2021, provision is made for the amount recoverable 2665 lakhs (Previous year: 2584 lakhs). The amount withheld from employees who retired after 30^th June 2021 is kept under other liabilities 2706 lakhs (Previous year: 1835 Lakhs). Based on the final order that may be passed, suitable effect will be carried out in the accounts.

c) Note no :49 (31C)

Inventory amounting to 16,939 Lakhs were damaged due to _oods caused by rains. An internal technical assessment committee estimated the loss of Inventory 7,856 Lakhs and the same has been provided in the books during the year. A claim for 750 Lakhs towards loss of Inventory and Plant & Equipment based on the original cost has been submitted to the Insurance Company.

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Statements of the current period. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters	Response to Key Audit Matters & Conclusion
a) Revenue recognition	Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
(‘Ind AS 115) The r evenue standard establishes a framework for determining whether, how much and when revenue is recognized. This involves certain key judgements relating to identification of distinct performance obligations, determination of transaction price identified performance obligation, the appropriateness of the basis used to measure revenue recognized a period. Additionally, the standard mandates robust disclosures in respect of revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date.
	comprehensive Evaluated the appropriateness of the disclosures provided under the revenue standard and assessed the completeness and mathematical accuracy of the relevant disclosures. of Evaluated the design of internal controls relating to implementation of the revenue accounting standard. over
	Selected a sample of continuing and new contracts, and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price.
	We carried out a combination of procedures involving enquiry and observation, reperformance and inspection of evidence in respect of operation of these controls.
	Selected a sample of continuing and new contracts and performed the following procedures:
	Read, analyzed and identified the distinct performance obligations in these contracts.
	Compared these performance obligations with that generally identified and recorded by the company.

 

Key Audit Matters	Response to Key Audit Matters & Conclusion
	Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable revenue.
	Examination of the correspondence relating to price revision and ascertained the reasonableness of the estimates.
	Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts.
	Due to detailed procedures, a portion of is recognized based on the most likely amount based on past experience and the consistent practices followed. We have verified the procedures revenue recognition including unbilled revenue.
b) Impairment of Trade Receivables	We have verified the followed in identifying the recoverability of long outstanding dues.
In r espect of receivables from Government the company i) Ef fectiveness of internal controls in place and procedures generally does not make any impairment provision based on past experience.
The amount involved being significant balance and management judgement we consider this as a Key Audit Matter.	ii) The pr ocedures and follow up actions in ascertaining the impairment of receivables.
	Our audit procedures include evaluation of provisions made for impairment in earlier years. We also made test checks of invoice wise collection details provided made in respect of in the five preceding financial years and we concluded that the management assumption is reasonable.
c) Contract Asset	Contract Assets represents the Companys right to receive the consideration in exchange for the Goods or Services that the Company has transferred to the Customer, when that right is conditioned on something other than passage of time.
Contract asset represents the revenue recognized but yet to be invoiced to the customer.
d) Liquidated damages	We have verified the controls, period of delay, the expected days of delay as on 31.03.2023 and also the calculation for the liquidated damages recognized and found the system followed and calculation to be in order.
The Companys contract with the customers has standard clause for Liquidated damages for delayed delivery. The companys product have extended period of manufacturing; design approvals and inspection by customer at various stages which result in delay in certain cases leading to liquidated damages. The liquidated damages recognized being significant in the statement of profit and loss, is considered a key audit matter in our opinion.
e) W ork - in - Progress (WIP) - Inventories	Our Audit Procedures include review of Physical Verification instructions
Inventories include Work in Progress which have been physically verified by the management based on physical verification instructions. verification Physical reports
	Roll back procedures
	Examining the basis of valuation on a test check basis Based on the above audit procedures we concluded that the valuation of WIP is proper.

 

Key Audit Matters	Response to Key Audit Matters & Conclusion
f) Revision of pay	We have verified the Audit para given by PDCA Bangalore, and the directives given by the Administrative Ministry dated 07.04.2021.
Revision of pay scales of executives and workmen, with effect from 01.01.2017 was implemented in accordance with the guidance issued by DPE vide OM dated 03.08.2017 for Executives and in accordance with the Wage Agreement entered into between Management and Employees Union representatives in 2019-20 in respect of Workmen. On an interpretation on pay refixation and pursuant to the directives of the Administrative Ministry, the pay fixation is to be revised and the excess amount paid is to be recovered from the employees.
	We have verified the Copies of the writ petition filed by the employees, the interim orders of the Honble High Court and the legal opinion from the company counsel.
	We verified the internal control and the program logic for recalculation of the employees cost and also made test check on walk through basis .Based on the above audit procedures we are satisfied with accounting treatment followed for employees benefits expenses, recognition of the amount recoverable, and made during the year.
The r evision has resulted in reduction of salaries the provision and relating to retired employees and the provision wages for the year ended 31 March 2023 by 5155 lakhs (Previous year: 5256 lakhs ) and consequential reduction in sales revenue for the year ended 31 March 2023 by 1239 lakhs (Previous year: 812 lakhs) .
While so, the Employees Union and the Officers Association have filed Writ Petitions with Honble High Court of Karnataka to stay recovery of excess amount of salary paid by the Company. The Honble High Court has granted interim stay on recoveries, Pending final disposal of the writ petitions by the High court, the excess amount is shown under claims receivable Note No.19 29645 lakhs (Previous year 24489 lakhs). Provision has been created in FY 2022-23 for the full liability of 29645 lakhs as a prudential measure in case the issue will be settled in favour of employees.
In r espect of employees who retired prior to 30 June, 2021, provision is made for the amount recoverable 2665 lakhs (Previous year: 2584 lakhs).The amount withheld from employees who retired after 30th June 2021 is kept under other liabilities 2706 lakhs (Previous year: 1835 Lakhs)

Information Other than the Financial Statements and Auditors Reports Thereon

The companys Board of Directors is responsible for the other information. The other information comprises the information included in Boards Report, Management Discussion & Analysis Report, Business Responsibility Report, but does not include the financial statements and our auditors report thereon. The Boards Report, Management Discussion & Analysis Report, Business Responsibility Report is expected to be made available to us after the date of this auditors report.

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

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the reports, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibility of Management and Those Charged with Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,2013("the Act") with respect to the preparation of these Standalone 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 Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Financial Statements, The Board of Directors 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 the Board of Directors 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 Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone 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 financial statements.

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

Identify and assess the risks of material misstatement of the 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system 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 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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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 de_ciencies in Internal Control that we identify during our audit.

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.

Other Matter

a) W e did not audit the financial statements / information of 29 Divisions included in the financial statement of the company whose financial statements / financial information reflect total assets of 67,11,738 Lakhs as at 31^st March 2023 and the total revenue of 26,92,785 lakhs for the year ended on that date, as considered in the standalone financial statements / information of these divisions have been audited by the division auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of divisions, is based solely on the report of such division auditors.

Our opinion is not modified in respect of these matters

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 (" the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013 we give in the "Annexure –B" statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) W e 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 and proper returns adequate for the purposes of our audit have been received from the divisions not visited by us.

c) The reports on the accounts of the divisions of the company audited under Section 143 (8) of the Act by the division auditors have been sent to us and have been properly dealt with by us in preparing this report.

d) The Balance Sheet, the Statement of Profit and Loss (the Statement of Changes in Equity) and Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the divisions not visited by us.

e) In our opinion, the aforesaid Standalone financial statements comply with the AccountingStandards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

f) Ministry of Corporate Affairs vide notification no 1/2/2014-CL-V dated 23^rd February 2018 has exempted the companies engaged in defense production to the extent of application of relevant Accounting Standard on Segment Reporting. In view of the above, no disclosure is made by the company as required by Ind AS 108. Subject to the above, we state that, in our opinion, the aforesaid standalone financial Statements comply with the Accounting Standards specified under Section 133 of the Act

g) In terms of circular NO. GSR 463(E) dated 05^th June 2015 issued by the Ministry of Corporate Affairs, Government of India, the company being Government Company, is exempt from the provisions of section 164(2) of the Act regarding disqualification of Directors.

h) The provisions of Section 197 are not applicable to a government Company (in terms of MCA Notification NO.GSR 463 (E) dated 05^th June 2015) as the managerial remuneration is paid as per the appointment letter from the Government of India.

i) W ith respect to the adequacy of the internal financial controls with reference to standalone financial statements of the

Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A" j) W ith 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 Financial Statements –Refer Note 49 (2) (a),49 (2) (b) ,49 (20),49 (21),49 (41),49 (43G), to the financial statements

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, on long-term contracts. The company does not have any derivative contracts.

iii. There were no amounts which were required to be transferred to the Investor education and protection fund by the company.

iv (a) The management has represented that, to the best of its knowledge and belief, no funds have been advanced. or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the division to or in any other persons or entities, including foreign entities ("lntermediaries"}, with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities Identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the division from any persons or entities, including foreign entities ("funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on such audit procedures we have considered reasonable and appropriate in the circumstances, nothing has come to the notice that has caused us to believe that the representations under sub-clause (i) and (ii) contain any material mis-statement.

v) a) The company has declared final dividend for the financial year 2021-2022 on 29.08.2022.

b) The interim dividends declared on 11.11.2022 and 10.03.2023 for the financial year 2022-2023 and paid by the Company during the year is in accordance with Section 123 of the Companies Act, 2013.

c) The Company has not proposed any final dividend up to the date of our report.

I) As required by section 143(5) of the Act, we give in "Annexure C" a statement on the matters specified by the Comptroller and Audit General of India for the Company.

	For A.John Moris & Co.
	Chartered Accountants
	FRN NO: 007220S
	(A G Krishnan)
	Partner
	Membership No. 021183
Place: Bengaluru	UDIN: 23021183BGTCQC1773
Date: 12.05.2023

ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT

OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF HINDUSTAN AERONAUTICS LIMITED.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act").

We have audited the Internal Financial controls with reference to standalone financial statements of HINDUSTAN AERONAUTICS LIMITED ("the Company") as of March 31, 2023 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys Management is responsible for establishing and maintaining Internal Financial controls with reference to financial statements criteria established by the Company, considering the essential components of Internal Control stated in the Guidance Note on Audit of Internal Financial controls with reference to financial statements, 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 Companies Act, 2013.

Auditors Responsibility

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 with reference to financial statements (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of Internal Financial Controls, both applicable to an audit of Internal Financial Controls and both issued by 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.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the Internal Financial Controls System over Financial Reporting 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.

We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the division Internal Financial Controls System over Financial Reporting.

Meaning of Internal Financial controls with reference to financial statements

A companys Internal Financial Control over Financial Reporting 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 Control over Financial Reporting includes those policies and procedures that:

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

(ii) Pr ovide 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

(iii) 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

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 Control over Financial Reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the division has, in all material respects, an adequate Internal Financial Controls System over Financial Reporting and such Internal Financial controls with reference to financial statements were operating effectively as at March 31, 2023, 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 with reference to financial statements issued by ICAI.

	As per our report of even date
	For A.John Moris & Co.
	Chartered Accountants
	FRN NO: 007220S
	(A G Krishnan)
	Partner
	Membership No. 021183
Place: Bengaluru	UDIN: 23021183BGTCQC1773
Date: 12.05.2023

ANNEXURE B To The Independent Auditors Report

Of Even Date On The Standalone Financial Statements Of Hindustan Aeronautics Limited.

The Annexure referred to in Paragraph 1 under the heading ‘Report on Other Legal and Regulatory Requirements of our Report of even date:

In terms of the information and explanations sought by us and provided to us by the Company and the books of account and records examined by us in the normal course of audit and to the best our knowledge and belief we state that;

(i) In r espect of the Companys property, plant and equipment, right-of-use assets and intangible assets:

(a) (A) The Company has maintained proper records showing full particulars including quantitative details and situation of Property, Plant and Equipment and relevant details of right-of-use-assets.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) The Company has a program of physical verification of Property, Plant and Equipment and right-of-use assets so as to cover all the assets once in every five years, which in our opinion is reasonable having regard to the size of the company and nature of its assets. Pursuant to the program, certain Property, Plant and Equipment and right-of-use assets were due for verification during the year and were physically verified by the management during the year. According to the information and explanations given to us, no material discrepancy were noticed on such verification.

(c) The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee) disclosed in the financial statements are held in the name of the company, except the following:

Description of property FMD	Gross carrying val ue in lakhs	Held in name of	Whether promoter, director or their relative or employee	Period held– indicate range, where appropriate	Reason for not being held in name of company*
Land 76.475 Acres	5	Various persons	NA	Approx. 1950	Compendium Error. Estate department is in possession of Hand book with land acquired in various survey numbers called as Compendium. Few title documents are not available as per the compendium.
NASIK
1) Land at Kasbe Sukena Railway station: Approx. 196.22 acres	- -	Government of Maharashtra (GOM)	No.	Since Inception of the Nashik factory in 1964	Railway siding land is not in use by HAL & is to be returned to Appropriate authority of State Government. Division is continuously following up the matter.
2) Land at Ojhar Approx. 69.48 Acres given by State government		Government of Maharashtra (GOM)	No.	Since Inception of the Nashik factory in 1964	Matter is being followed with Sub Divisional Magistrate Niphad for making Indenture.
LUCKNOW
Land 39.320 Acres	286 Lakhs	Lucknow Development Authority	Not applicable	19.05.1986	The land is in the possessions of the division, however, same is to be registered in the name of the division by Lucknow Development Authority.

 

Description of property KANPUR	Gross carrying val ue in lakhs	Held in name of	Whether promoter, director or their relative or employee	Period held– indicate range, where appropriate	Reason for not being held in name of company*
Land at Kanpur (429.03 Acres)	4.00 lakhs	No title deed	No	Since beginning but date not available Since beginning	We have been informed that possession of the said immovable property was handed over to Hindustan Aeronautics Limited (HAL) by district Land Acquisition Officer and Indian Air Force, therefore no title deed is
Building	35.00 Lakhs	No title deed	No	but date not available	required to be executed under Government Grants Act, 1895. (Section 2 Government Grants are exempted from the operation of the Transfer of Property Act)
BARRACKPORE
Land 7.115 acres		Instrument of transfer is pending execution	No	31st March 1969	Transfer of Land is being pursued with Defense Estate Officer, Kolkata

(d) The Company has not revalued any of its Property, Plant and Equipment (including right-of-use assets) and intangible assets during the year;

(e) No proceedings have been initiated during the year or are pending against the Company as of 31^st March 2023 for holding any benami property under Benami Transaction (Prohibition) Act ,1988 and rules made thereunder.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals and no discrepancies of 10% or more in the aggregate for each class of the inventory were noticed.

(b) The Company has been sanctioned working capital limits in excess of 5 crore, in aggregate, during the year from banks on the basis of security of current assets. There are differences between the stock statement submitted to the banks and books of account however the differences are not significant. Refer note 35C of note 49 to financial statements.

(iii) During the year the Company has made investments in a joint venture company and has granted loans both secured and unsecured to its employees and has not provided any guarantee or security to any other entity.

(a) The company has provided both secured and unsecured loan to its employees .

A) The aggregate amount granted during the year and balance outstanding at the balance sheet date is given below:

Particulars	Loans to employees in Lakhs
Aggregate amount provided during the year	328
Balance outstanding as at balance sheet date in respect of above	969

(b) In our opinion, the Investment made during the year and the terms and conditions of the grant of loans, during the year are, prima facie, not prejudicial to the Companys interest.

(c) The repayment of principal and payment of interest for employees loan has been stipulated and the repayments are regular.

(d) There are no overdue amount for more than ninety days.

(e) The company has not granted any loan or renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties. Hence, reporting under clause 3(iii)(e) of the Order is not applicable.

(f) The Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment during the year. Hence, reporting under clause 3(iii)(f) is not applicable.

(iv) In terms of Circular No.GSR 463 (E) dated 5^th June 2015 issued by Ministry of Corporate Affairs, Government of India, the Company being a Government Company engaged in Defence production is exempt from Section 185 and 186 of Companies Act 2013 and hence considered not applicable.

(v) The Company has not accepted any deposits or amount which are deemed to be deposits. Hence, reporting under Clause 3 (v) of the order is not applicable.

(vi) W e have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the

Company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148 (1) of the Act and we 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) The company is regular in depositing undisputed statutory dues, including Goods and Service Tax, Provident Fund,

Employees State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess, and any other Statutory Dues to the appropriate authorities and there were no undisputed amounts payable which were in arrears as at 31^st March 2023 for a period of more than six months from the date they became payable.

(b) Details of dues of Goods and service tax, income Tax or Sales Tax or Service Tax or Duty of Customs or Duty of Excise or

Value Added Tax, and Cess that have not been deposited as on 31^st March 2023 on account of disputes are given below:

Sales Tax # Assessment Year	Amount (In Lakhs)	Appeal by	Forum where dispute is pending
1986-87	3340	The company	Ist Appellate Authority
1988-89	5106	The company	Ist Appellate Authority
1989-90	5465	The company	Ist Appellate Authority
1991-92	4279	The company	Ist Appellate Authority
1997-98	319	The company	Ist Appellate Authority
1999-2000	151	The company	Maharashtra Sales Tax Tribunal
2000-2001	57	The company	First Appellate Authority (Re calculation pending)
2000-2001	9	The company	Rectification Application submitted on 19.05.2006 for Submission of C Form. Pending before Dy.Com. Of Sales Tax Assessment Nasik.
2001-2002	4	The company	Rectification of remand back appeal order passed on 19/05/2022. The part payment adjusted against the tax dues against the order.
2002-2003	89	The company	Maharashtra Sales Tax Tribunal, Mumbai
2002-2003	365	The company	Maharashtra Sales Tax Tribunal, Mumbai
2003-2004	28	The company	Maharashtra Sales Tax Tribunal, Mumbai
2003-2004	321	The company	Maharashtra Sales Tax Tribunal, Mumbai
2004-2005	10510	The company	Maharashtra Sales Tax Tribunal, Mumbai
2004-2005	270	The company	Rati_cation application before Sr. Dy. Comm. of Sales Tax Nasik
2005-2006	41459	The company	Maharashtra Sales Tax Tribunal, Mumbai

 

Assessment	Amount	Appeal by	Forum where dispute is pending
Year	(In Lakhs)
2005-2006	59	The company	Remanded back order received from First Appellate Authority- Nasik on 23.11.2021
2006-2007	76060	The company	Maharashtra Sales Tax Tribunal, Mumbai
2006-2007	8	The company	Maharashtra Sales Tax Tribunal, Mumbai
2008-2009	82234	The company	Maharashtra Sales Tax Tribunal, Mumbai
2009-2010	102090	The company	Maharashtra Sales Tax Tribunal, Mumbai
2009-2010	139	The company	Maharashtra Sales Tax Tribunal, Mumbai
2007-2008	57387	The company	Maharashtra Sales Tax Tribunal, Mumbai
2007-2008	14	The company	Maharashtra Sales Tax Tribunal, Mumbai
2010-2011	92600	The company	Maharashtra Sales Tax Tribunal, Mumbai
2011-2012	90384	The company	Maharashtra Sales Tax Tribunal, Mumbai
2011-2012	11	The company	Maharashtra Sales Tax Tribunal, Mumbai
2012-2013	79396	The company	Maharashtra Sales Tax Tribunal, Mumbai
2013-2014	93906	The company	Maharashtra Sales Tax Tribunal, Mumbai
2014-2015	67170	The company	Ist Appeal order received.2nd Appeal to be filed before tribunal.
2014-2015	4	The company	Ist Appeal order received.2nd Appeal to be filed before tribunal.
2015-2016	71484	The company	Maharashtra Sales Tax Tribunal, Mumbai
2016-2017	106895	The company	Maharashtra Sales Tax Tribunal, Mumbai
2016- 2017	61	The company	1st Appeal order received.2nd Appeal to be filed before tribunal.
2017-18 (Q1)	10142	The company	Maharashtra Sales Tax Tribunal, Mumbai
2017-18 (Q1)	23	The company	Ist Appeal order received.2nd Appeal to be filed before tribunal.
2004-15	33746	The company	Additional Commissioner (Appeal)
1996-97	479	The company	High Court, Allahabad
1997-98	593	The company	High Court, Allahabad
1998-99	751	The company	High Court, Allahabad
1999-00	488	The company	High Court, Allahabad
2000-01	1058	The company	High Court, Allahabad
2001-02	1222	The company	High Court, Allahabad
2002-03	1361	The company	High Court, Allahabad
2003-04	709	The company	High Court, Allahabad
2004-05	936	The company	High Court, Allahabad
2005-06	1230	The company	High Court, Allahabad
2006-07	2386	The company	High Court, Allahabad
2007-08	2988	The company	High Court, Allahabad
2008-09	2316	The company	High Court, Allahabad
2009-10	2922	The company	High Court, Allahabad
2010-11	3348	The company	High Court, Allahabad

 

Assessment	Amount	Appeal by	Forum where dispute is pending
Year	(In Lakhs)
2011-12	4399	The company	High Court, Allahabad
2012-13	5848	The company	High Court, Allahabad
2013-14	3195	The company	Tribunal
2014-15	3710	The company	Tribunal
2015-16	1688	The company	Tribunal
2016-17	2637	The company	Tribunal
2017-18	835	The company	Tribunal
2005-06	102	The company	WB Commercial Taxes Appellate and Revisional Board, Kolkata
2006-07	448	The company	WB Commercial Taxes Appellate and Revisional Board, Kolkata
2007-08	351	The company	WB Commercial Taxes Appellate and Revisional Board, Kolkata
2008-09	849	The company	WB Commercial Taxes Appellate and Revisional Board, Kolkata
2016-17	83	The company	WB Commercial Taxes Appellate and Revisional Board, Kolkata
2015-16	9	The company	Commissioner of Central Tax (Appeal) Domlur Bangalore
2016-17	3	The company	Commissioner of Central Tax (Appeal) Domlur Bangalore
2010-11	372	The company	Appellate Tribunal, Lucknow
2011-12	1432	The company	High Court
2012-13	4156	The company	High Court
2013-14	4859	The company	High Court
2014-15	8310	The company	High Court
2015-16	15331	The company	Appellate Tribunal, Lucknow
2016-17	13609	The company	Appellate Tribunal, Lucknow
2017-18	4026	The company	Appellate Tribunal, Lucknow
Total	11,34,625

# Sales Tax paid against Disputed tax 30,408 Lakhs.

Service Tax # Assesment Year	Amount (in Lakhs)	Appeal by	Forum where dispute is pending
From Financial year 2007-08 to 2011-12	4,709	The Company	Pending before Tribunal, Bangalore
Financial year 2008-09	387	The Company	Pending before Tribunal, Bangalore
From Financial year 2013-14 to 2016-17	136	The Company	Pending before Tribunal, Bangalore
April 2017 to June 17	6	The Company	Pending before Commissioner of Service Tax (Appeals), Bangalore

 

Assesment Year	Amount (in Lakhs)	Appeal by	Forum where dispute is pending
April 2011 to March 2012	74	The Company	CESTAT
April 2009-10 to March 2010-11	84	The Company	CESTAT
Oct 2007 to March 2009	120	The Company	CESTAT
August 2002 to March 2003	6	The Company	CESTAT, Bangalore
April 2003 to March 2004	26	The Company	CESTAT, Bangalore
April 2004 to March 2005	63	The Company	CESTAT, Bangalore
April 2005 to March 2006	78	The Company	CESTAT, Bangalore
April 2006 to March 2007	123	The Company	CESTAT, Bangalore
April 2007 to March 2008	128	The Company	CESTAT, Bangalore
April 2008 to March 2009	18	The Company	CESTAT, Bangalore
April 2009 to March 2010	1	The Company	CESTAT, Bangalore
April 2010 to March 2011	1	The Company	CESTAT, Bangalore
April 2013 to March 2017	13	The Company	CESTAT, Bangalore
2013-14 till 2017-18	55	The Company	Commissioner of Central Tax (Appeals) East Commissionerate Domlur
2007-08 to 2011-12	10,541	The Company	CESTAT EZB,KOLKATA
2015-16	1,099	The Company	Commissioner of CGST & Central Excise, Audit Commissionerate, Bhubaneswar.
2016-17 & 2017-18	341	The Company	Pending before The Joint Commissioner of CGST & Central Excise, Audit Commissionerate, Bhubaneswar.
2005-06 to 2009-10	385	The Company	CESTAT
2010-11	38	The Company	CESTAT
2011-12	340	The Company	CESTAT
2010-11	38	The Company	CESTAT
2015-16	280	The Company	CESTAT
2020-21	12	The Company	CESTAT
2016-17 & 2017-18	242	The Company	CESTAT
2004-05 to 2008-09	426	The Company	Central Excise & Service Tax appellate Tribunal, New Delhi
2011-12 to 2014-15	12,681	The Company	CESTAT, Allahabad
2015-16 to 2016-17	194	The Company	CESTAT, Allahabad
Various Years	166	The Company	Commissioner (Appeal)
2005- 06	62	The Company	CESTAT/Tribunal
2009-10	282	The Company	CESTAT/Tribunal
2007- 11	11,235	The Company	CESTAT/Tribunal
2011-12	434	The Company	CESTAT/Tribunal
2012-13	688	The Company	CESTAT/Tribunal
2013-14	1,617	The Company	CESTAT/Tribunal

 

Assesment Year	Amount (in Lakhs)	Appeal by	Forum where dispute is pending
2014-15	1,904	The Company	CESTAT/Tribunal
2015-17	326	The Company	CESTAT/Tribunal
2012-13	42	The Company	CESTAT
April 2009 To March 2013	450	The Company	CESTAT
June 2013 to June 2017	1	The Company	Service Tax
2011-12	96	The Company	Old Ref. No ST/85856/15-MUM Dated 21.04.2015 (Was Disposed ORDER IN HAND DT 01.11.2018
			-Remanded back to lower authority. refiled by division). New Ref No ST/86412/2022-DB Arising out of OIA/OIO/01/ST/2015 DT 15.01.2015 date of filling 25.03.2022
2012-13	624	The Company	Old Ref. No ST/85856/15-MUM Dated 21.04.2015 (Was Disposed order in hand dt 01.11.2018 -remanded back to lower authority. refiled by division) . New Ref
			No ST/86412/2022-DB Arising out of OIA/OIO/01/ ST/2015 DT 15.01.2015 date of filling 25.03.2022
2013-14	8,145	The Company	ST/87320 DT 10/10/2016-Appeal filed before Hble CESTAT, Mumbai;; no hearing posted
2014-15	10,692	The Company	ST/85007 DT.11/01/2017-Appeal filed before Hble CESTAT, Mumbai; ;no hearing posted
2015-16	14,077	The Company	ST/86124/2019-DB-Appeal filed before Honble CESTAT in Mar 2019 ; ; no hearing posted
2016-17	41,898	The Company	ST/86124/2019-DB-Appeal filed before Honble CESTAT in Mar 2019 ; ; no hearing posted
2017-18	2,461	The Company	ST/86124/2019-DB-Appeal filed before Honble CESTAT in Mar 2019 ; ; no hearing posted
2007-08	280	The Company	ST/134/10-MUM Dated 23.03.2010.17/ST/2009. Matter decided by Hble CESTAT Mumbai in HAL Favour.
2008-09	224	The Company	ST/134/10-MUM Dated 23.03.2010.17/ST/2009.
			Matter decided by Hble CESTAT Mumbai in HAL Favour.
2012-2013,2013-2014 and 2014-2015	1,395	The Company	ST/85782/2022-DB dt 25.03.2022-Appeal filed before Honble CESTAT in Mar 2022 ; ; no hearing posted
2012-13	144	The Company	ST/86125/2019-DB-Appeal filed before Honble CESTAT in Mar 2019; no hearing posted
2013-14	172	The Company	ST/86125/2019-DB-Appeal filed before Honble CESTAT in Mar 2019; no hearing posted.
2014-15	176	The Company	ST/86125/2019-DB-Appeal filed before Honble CESTAT in Mar 2019; no hearing posted
2015-16	176	The Company	ST/86125/2019-DB-Appeal filed before Honble CESTAT in Mar 2019; no hearing posted
2016-17	271	The Company	ST/86125/2019-DB-Appeal filed before Honble CESTAT in Mar 2019; no hearing posted

 

Assesment Year	Amount (in Lakhs)	Appeal by	Forum where dispute is pending
2015-16	6	The Company	Appeal filed before Honble CESTAT
2016-17	4	The Company	Appeal filed before Honble CESTAT
2017-18	0	The Company	Appeal filed before Honble CESTAT
2012-13	8	The Company	Appeal filed before Honble CESTAT
2013-14	6	The Company	Appeal filed before Honble CESTAT
2014-15	7	The Company	Appeal filed before Honble CESTAT
Total	1,30,717

 

Assessment Year	Amount ( In Lakhs)	Appeal by	Forum Where Dispute is pending
2017-18	308	The Company	HAL has filed Appeal with Appellate Authority (Dy. Commissioner of Sales tax)
Total	308

Customs Duty #

Assesment Year	Amount (in Lakhs)	Appeal by	Forum where dispute is pending
2019-20	945	The company	Pending before Tribunal, Bangalore
2015-16 to 2019-20	4,098	The company	CESTAT
2013-14	23,569	The company	CESTAT
2017-18 to 2020-21	264	The company	CESTAT
2018-19	22	The company	CESTAT
2018-2019 and 2019 -2020	1,441	The company	CESTAT, Bangalore
2020-21	11	The company	_CESTAT
17.02.2018	63	The company	Commissioner of Customs (apeals), Bengaluru
TOTAL	30,414

Income Tax #

Assessment Year	Amount (in Lakhs)	Appeal by	Forum where dispute is pending
2020-21	12,227	The company	Commissioner of Appeals
2008-09 to 2019-20	398	The company	Asst. Commissioner Income Tax, TDS
TOTAL	12,625

# Income tax paid against disputed tax 6891.55 lakhs

Others
Year	Amount (In Lakhs)	Appeal by	Forum Where Dispute is pending	Authority
01/04/2019 to 30/09/2020	16	The Company	ESIC, Regional Director (Appellant Authority)	Employees State Insurance Act
2001-02 to 2022-23	2,734	The Company	Bombay High Court	Non Agricultural Cess
2001-02 to 2022-23	578	The Company	Bombay High Court	Gram Panchayat Tax
April 2005 - Sep 2007	20	The Company	High Court, Karnataka	Appeal preferred by ESI Dept. Amount of deposit made is 10.02 Lakhs
2005-06	102	HAL,Barrackpore division	WB Commercial Taxes,Appellate and Revisional Board,Kolkata
2006-07	448	HAL,Barrackpore division	WB Commercial Taxes,Appellate and Revisional Board,Kolkata
2007-08	351	HAL, Barrackpore division	WB Commercial Taxes,Appellate and Revisional Board,Kolkata
2008-09	849	HAL, Barrackpore division	WB Commercial Taxes,Appellate and Revisional Board,Kolkata
2016-17	83	HAL, Barrackpore division	WB Commercial Taxes,Appellate and Revisional Board,Kolkata
2015-16	9	HAL Foundry and forge division	Commissioner of central tax(Appeal) Domlur ,Bangalore	Excise duty
2016-17	3	HAL Foundry and forge division	Commissioner of central tax(Appeal) Domlur, Bangalore	Excise duty
Total	5,193

(viii) Ther e were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,1961 (43 of 1961).

(ix) . (a) The Company has not taken any loans or other borrowings from any lender. Hence reporting under clause 3(ix)(a) of the Order is not applicable.

(b) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(c) The Company has not taken any term loan during the year and there are no outstanding term loans at the beginning of the year and hence, reporting under clause 3(ix)(c) of the Order is not applicable.

(d) On an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term purposes by the Company.

(e) On an overall examination of the financial statement of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligation of its subsidiaries.

(f) The Company has not raised any loans during the year and hence reporting under clause 3(ix)(f) of the order is not applicable (x) (a) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause 3(x)(a) of the Order is not applicable.

(b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause 3(x)(b) of the Order is not applicable.

(xi) (a) No fraud by the Company or fraud on the Company has been noticed or reported during the year

(b) No report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of the Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and up to the date of this report.

(c) W e have taken into consideration the whistle blower complaints received by the Company during the year (and up to the date of this report), while determining the nature, timing and extent of our audit procedures.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

(xiii) In our opinion, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 with respect to applicable transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

(xiv) (a) In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business.

(b) W e have considered, the internal audit reports for the year under audit,.issued till date . (xv) The Company has not entered into any non-cash transactions with Directors or persons connected with him.

(xvi) a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.Hence reporting under clause 3(xvi)(a),(b) and (c) of the Order is not applicable. b) In our opinion, there is no core Investment Company within Group (as defined in the Core Investment companies (Reserve Bank Directions,2016) and accordingly reporting under clause 3(xvi)(d) of the order is not applicable.

(xvii) The Company has not incurred cash loss during the financial year covered by our audit and the immediately preceeding financial year.

(xviii) There has been no resignation of the statutory auditor of the Company during the Year.

(xix) On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payments of financial liabilities, other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) Ther e are no unspent amount towards Corporate Social responsibility (CSR) on ongoing projects requiring a transfer to a special account in compliance with provisions of sub section (6) of section 135 of the said act.

	For A.John Moris & Co.
	Chartered Accountants
	FRN NO: 007220S
	(A G Krishnan)
	Partner
	Membership No. 021183
Place: Bengaluru	UDIN: 23021183BGTCQC1773
Date: 12.05.2023

ANNEXUR E – C TO THE INDEPENDENT AUDITORS REPORT

Directions indicating the areas to be examined by the Auditors during the course of audit of annual accounts of Hindustan Aeronautics Limited for the year 2022-23 issued by the Comptroller & Auditor General of India under Section 143(5) of the Companies Act, 2013.

Areas Examined	Observation/Finding
1. Whether the company has system in place to process all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated.	Yes. The Company has ERP System in place and the accounting entries are generated in the System as and when transaction are made. The ERP system is not linked to Internet and the modules in the ERP system are not interlinked. In view of the same some Journal Entries are required to be made to account for certain adjustment / correction derived basically from the System and then fed in to the system through required accounting process with a maker and checker concept to ensure the integrity of the System Not applicable.
2. Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/loans/interest etc. made by a lender to the company due to the companys inability to repay the loan? If yes, the financial impact may be stated. Whether such cases are properly accounted for?. (In case, lender is a Government company, then this direction is also applicable for statutory Auditor of Lender Company)
3 Whether funds (grants/subsidy etc.) received/ receivable for specific schemes from Central/ State Government or its agencies were properly accounted for/utilized as per its term and conditions? List the cases of deviation.	Not applicable

 

	For A.John Moris & Co.
	Chartered Accountants
	FRN NO: 007220S
	(A G Krishnan)
	Partner
	Membership No. 021183
Place: Bengaluru	UDIN: 23021183BGTCQC1773
Date: 12.05.2023