mmtc ltd share price Auditors report


To the Members of

MMTC Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying financial statements of MMTC Limited ("the Company"), which comprise the Balance Sheet as at March 31,2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the financial statements including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the financial statements"), in which are incorporated the financial statements for the year ended on that date audited by the Branch Auditors of the Companys Regional and sub-regional Offices at Mumbai, Vizag, Chennai, Hyderabad and Bhubaneshwar(SRO).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2021, as amended, thereof ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, the profit and total comprehensive income(Comprising of net profit and total comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis of Qualified Opinion

1. We draw attention to note no 40(f)(a) of the accompanying financial statement, which states that the liability @1.5% of profit before tax ("PBT") for the year in respect of scheme for retirees prior to 01.01.2007 (closed group) has not been recognised even though the Company has reported PBT of INR. 1279.16 crore (P.Y. 120.60 crore), on the basis of affordability. Also, the Company has not provided form PRMBS (open group) @ 4.5% of Basic and DA for serving employees. During the previous year provision in respect of retirees after 01.01.2007 pertaining to FY 2019-20 and 2020-21 had been withdrawn due to loss during these previous years. The management will review the above in the next financial year. The non-recognition of provision according to the schemes above constitutes a departure from the accounting standards as prescribed under section 133 of the Act. An amount of INR. 19.18 crore (P.Y. 1.81 crore) (1.5% of PBT) and INR. 1.63 crore (P.Y. 3.29 crore) (4.5% of Basic and DA) estimated by the management, should have been provided as per the accounting standards. Accordingly, the provision for PRMBS would have been increased by INR. 20.81 crore (P.Y. 5.10 crore) and net income and shareholders fund would have been reduced by the given amount.

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). 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 (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.

Sl. No Key Audit Matter Auditors Response
1. Refer note no. 34 on the claims not acknowledged as debt incorporating therein claims on account of pending legal cases. There are large numbers of cases pending before various adjudicating authorities. These legal cases involve significant judgement to determine the possible outcome of those disputes and independent legal assessment to pursue the case. We obtained list of all the pending legal cases handled at Corporate office legal division on 31st March 2023 with a note from management on the changes in the status of the cases from that of last year. We considered the effect of information provided by the management and analysed the impact of financial obligation of the Company.
The company has 5 regional offices, 1 sub-regional office and different divisions to handle the trade activities including accounting of that particular activity. However, in lot of cases the legal cases are pursued at corporate office level while related financial information / transactions are dealt at RO level, thereby difficulties are faced in giving a comprehensive and holistic treatment to the transaction. It was suggested to management to have legal cases and financial obligation if any at the same location in order to have clarity in reporting in financial statement.
2 Assessment of impairment of investment in subsidiary and joint ventures (Refer note no. 6) Our audit procedures include but we are not limited to the following:
The company as at 31st March,2023 has non-current and current investments. Obtained and understanding of the management process.
Discussed extensively with management regarding impairment indicators and evaluated the design and testing operating effectiveness of controls.
Assessed the methodology used by the management to estimate the recoverability of investment and ensured that it is consistent with applicable accounting standards.

Emphasis of Matters

Restructuring and default in loan repayment

We draw attention to Note No. 29 of the accompanying financial Statements, which states that Consequent upon receipts of divestment proceeds from NINL on 4.7.2022 an amount of INR. 2551.44 crore as on 31.3.2022 have been paid towards principal and normal agreed interest upto 31.3.2022. An amount of Rs. 106.41 crore out of which Rs. 63.68 crore pertains to interest from 01.04.2022 to 31.03.2023 & remaining amount of Rs. 42.73 crore relates to additional interest and other charges under RTR subject to final settlement with banks. The matter is now closed with State Bank of India and Punjab & Sind Bank. Other lender banks are also taking up their matter with appropriate authorities. The management is of the view that the remaining banks shall take into consideration the concession if any and no addition provision is required to be made.

Our opinion is not modified in respect of the above matter.

Non-compliance of regulation 33 of SEBI and section 49 of the Act

We draw attention to Note No. 34 (vii) to the accompanying financial statements, which states that the Company has created a contingent liability of INR 0.07 crore (P.Y. 0.07 crore) on account of demand raised by Stock Exchange Board of India (SEBI) in relation to non-compliance of regulation 33 of SEBI. The management is in the process of having these demands waived and thus no provision has been made in the financial statements.

Our opinion is not modified in respect of the above matter.

Non-compliance of Section 149 of the Act

We draw attention to Note No. 34 (vii) to the accompanying financial statements, which states that an amount of INR. 0.01 crore is included for non-compliance of appointment of Independent Director within the stipulated time. The management is in the process of receiving an approval from the concerned ministry, thus no provision has been made in the financial statements

Our opinion is not modified in respect of the above matter.

Write-off of Foreign Debtors

We draw attention to Note No. 36 (n) to the accompanying financial statements, which states that an amount of INR. 0.10 crore on account of foreign debtors outstanding for more than twenty years was written off with the approval of the Board of directors of the Company during the year and the provisions created earlier for bad and Doubtful Debts/Claims/Loans were withdrawn. The management of the Company is under the process of taking an opinion on the FEMA guidelines through an expert and action (if any) will be taken accordingly.

Our opinion is not modified in respect of the above matter.

Other Matters

1. We did not audit the financial statements/ financial information of 5 Regional Offices included in the standalone financial statements of the Company whose financial statements/financial information reflect total assets of INR. 375.47 crores as at March 31,2023 and total revenue of INR. 230.62 crores for the year ended on that date, as considered in the standalone financial statements. The financial statements/financial information of these branches have been audited by the branch 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 these branches, is based solely on the report of such branch auditors.

2. The sub - regional office of Bhubaneshwar has provided a qualified opinion and has reported that the SRO has recognised income INR. 0.25 crore which arose due to forfeiture of eMd as the party failed to comply with terms and conditions of the tender. All the activities starting from floating of the tender, execution of the contract and the decision to cancel the lots allotted to the parties for failure to deposit the payment and forfeit the EMD pertain to FY 2021-22.

As the forfeiture pertains to FY 2021-22, such income is a prior period item in the Financial statement for FY 2022-23 which should have been disclosed as per the requirements of IND AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors. Such omission has decreased the loss of FY 2022-23 by INR. 0.25 crore and reduced the EMD amount under Other Financial liabilities in FY 2022-23. As per the requirements of INDAS 8 the said Miscellaneous Income of INR. 0.25 Crore., should have been corrected in the Financial statements retrospectively and accordingly Financial statements for FY 2022-23 and the comparative amount of the prior period should have been restated.

The accounting standard requires retrospective adjustment only if the amount is material. An amount of INR. 0.25 crore is material at the SRO level but in the standalone financial statements the given amount is not material and thus has been adjusted through Prior period errors provided in Note No. 48 of the accompanying financial statements.

Our opinion is not modified in respect of this matter.

3. The regional of Mumbai under Emphasis of matter para has reported that there is a dispute pertaining to Sada Lease Land, Goa due to which there is a retrospective change in the lease rentals from year 2005 to 2022. The change in the lease rentals has been debited to Profit & Loss Account in the following manner:

Lease Rent of earlier years - 274.83 lakhs

Interest on lease - 46.91 lakhs

Depreciation on ROU Assets - 0.85 lakhs

Further the lease rentals for the block of 2021-25 has not been revised. Last revision was made in the block of 2015-20. Subsequent to this period, revision has been pending as on date and the RO has recognized expenses based on the 2015-20 revision.

Our opinion is not modified in respect of this matter.

Managements Responsibilities for the Financial Statements

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 financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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, 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.

The Board of Directors are responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 scepticism 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 financial 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 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 the 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 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 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 deficiencies 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, based on our audit 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 of the aforesaid financial statements.

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, the Cash Flow Statement and Statement of Changes in Equity dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with the companies (Indian accounting Standards) Rules, 2015 as amended;

e) Being a Government Company pursuant to the Notification No. GSR 463(E) dated 5 June 2015 issued by the Ministry of Corporate Affairs, Government of India, provisions of sub-section (2) of Section 164 of the Act, are not applicable to the Company;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

g) As per Notification number G.S.R. 463 (E)dated 5th June, 2015 issued by Ministry of Corporate Affairs, section 197 of the Act regarding remuneration to director is not applicable to the Company, since it is a Government Company.

h) 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, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. There are pending litigation including matters relating to sales tax, custom duty and excise duty which are disclosed as contingent liability - refer to Note 34 and 36 to the standalone financial statements, the impact of the same is unascertainable as the matters are sub-judice.

ii. The Company is not having any long-term contracts including derivative contracts for which there were any material foreseeable losses; and

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2023;

iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds

(which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), 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 (Refer note 50 (e)).

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("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 (Refer note 50(f))

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. The Company has not declared or paid any dividend during the year ended 31 March 2023.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.

3. As required by CAG of India through directions, issued under Section143(5) of the Act, 2013 we give our report in the attached "Annexure C".

Annexure- A To the Independent Auditors Report on the Financial Statements of The MMTC LIMITED.

Refer to in Paragraph 4 under "Other Legal and Regulatory Requirement" we further report that:

I. a. i. The Company has not maintained proper records in respect of its property plant and equipment showing full particulars including quantitative details and situation of Property plant and equipment.

ii. The Company has maintained proper records showing full particulars of intangible assets.

b. As per the explanations and information given to us the Property plant and equipment have been physically verified by the management at reasonable intervals except fixed assets provided to officials of Ministry of Corporate Affairs.

c. Based on our examination of the property tax receipts and lease agreement for land on which building is constructed, registered sale deed / transfer deed / conveyance deed provided to us, we report that. The title in respect of self-constructed buildings and title deeds of all other 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 included under Property, Plant and Equipment are held in the name of the Company as at the balance sheet date.

Title deeds of immovable property are held in the name of the company except in the case mentioned below:

Region/Office Description of property Gross carrying Value (INR) Held in the name of Whether promoter, director or their relative or employee Period held Remarks
Corporate Office Leasehold Land (Scope) Office Building (Scope) 1.04 Crore 5.74 Crore Scope Complex No 99 years Lease Deed is in the name of scope which is yet to be executed in favour of the company

Further, 36 title deeds has been deposited with Honble High Court in respect of dispute with Anglo American Metallurgical Coal Pte Limited.

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 at March 31,2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

ii. a. The management has conducted physical verification of inventory at reasonable intervals during the year. In our opinion, the coverage and procedure of such verification by the management is appropriate and no discrepancies of 10% or more in the aggregate for each class of inventory were noticed. In our opinion and according to the information and explanation given to us, the procedure, the procedure of physical verification of inventories followed by the management needs to be strengthen in relation to the size of the MMTC Limited and the nature of its business.

b. The Company has not been sanctioned working capital limits by banks or financial institutions on the basis of security of current assets during any point of time of the year. Accordingly, reporting under clause 3(ii)(b) of the Order is not applicable to the Company.

iii. The Company has not made any investments in, has provided any loans or advances in the nature of loans or stood guarantee, or provided security, secured or unsecured, to companies, firms, Limited liability partnerships or any other parties during the year, and hence reporting under clause 3(iii) of the Order is not applicable.

iv. In our opinion and according to the information and explanations given to us the Company has complied with the provisions of Section 186 of the Act with respect to investments. Further, in our opinion, the Company has not entered into any transaction covered under Sections 185 and 186 of the Act in respect of loans, guarantees and security.

v. According to the information and explanations given to us, the Company has not accepted any deposits or there is no amount which has been considered as deemed deposit within the meaning of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, reporting under clause 3(v) of the Order is not applicable to the Company.

vi. According to the information and explanations given to us, maintenance of cost records has not been prescribed by the Central government for the Company under section 148(1) of the act. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.

vii. a. According to the information and explanations given to us and as per the records verified by us, the Company has not been regular in depositing undisputed statutory dues including Income Tax, Provident Fund dues, Professional Tax, Value Added Tax, Service Tax and Goods & Service tax with the appropriate authorities. There were no undisputed amount payable in respect of Income Tax, Provident Fund dues, Professional Tax, GST, Value Added Tax and Service Tax and other statutory dues in arrear as at 31st March 2023 for more than six months from the date they became payable.

b. In case of dues of Income Tax or sales tax or service tax or duty of custom or duty of excise or value added tax or cess which have not been deposited on account of any dispute are attached as "Annexure I".

viii. There 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. According to the information and explanations given to us and as per the records verified by us, the Company has defaulted in repayment of loans or borrowings to a financial institution, bank, Government or dues to debenture holders as per details attached in "Annexure II".

b. According to the information and explanations given to us including representation received from the management of the Company, and on the basis of our audit procedures, we report that the Company has not been declared a wilful defaulter by any bank or financial institution or other lender.

c. In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of term loan during the year. Accordingly, reporting under clause 3(ix)(c) of the Order is not applicable to the Company.

d. In our opinion and according to the information and explanations given to us, the Company has not raised any funds on short term basis during the year. The outstanding short-term funds have not been utilised for the long term purposed.

e. According to the information and explanations given to us and on an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiary.

f. According to the information and explanations given to us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiaries.

x. a. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments), during the year. Accordingly, reporting under clause 3(x)(a) of the Order is not applicable.

b. According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or (fully, partially or optionally) convertible debentures during the year. Accordingly, reporting under clause 3(x)(b) of the Order is not applicable to the Company.

xi. a. No fraud by the Company or on the Company has been noticed or reported during the year. According to the information and explanations given to us and based on the audit procedures performed in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the company or its officers, noticed or reported during the year, nor have we been informed of such case by the management.

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 Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the date of this report.

c. According to the information and explanations given to us including the representation made to us by the management of the Company, there are no whistle-blower complaints received by the Company during the year.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the provisions of paragraph 3(xii) of the Order are not applicable to the Company.

xiii. According to the information and explanations given to us, all transactions with the related parties made by the Company are in compliance with section 177 and 188 of the Act, where applicable and the relevant details in respect of such transactions have been appropriately disclosed in the standalone Financial Statements under Ind As-24 - "Related Party Disclosures" specified under Section 133 of the Act read with relevant rules.

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

b. We have considered, the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures.

xv. In our opinion during the year the Company has not entered into any non-cash transactions with its Directors or persons connected with its directors. and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

xvi. a. In our opinion, 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, the Company is no core investment company (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 incurred no cash losses during the financial year covered by our audit and cash losses of INR. 89.35 crores was incurred in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors of the Company during the year. Accordingly, reporting under clause 3(xviii) of the Order is not applicable.

xix. According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realisation of standalone financial assets and payment of standalone financial liabilities, other information accompanying the standalone financial statements, our knowledge of the plans of the Board of Directors and management, we are of the opinion that no material uncertainty exists as on the date of the audit report that the Company is 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. There are no unspent amounts towards Corporate Social Responsibility (CSR) on other than ongoing projects requiring a transfer to a Fund specified in Schedule VII to the Companies Act in compliance with second proviso to sub-section (5) of Section 135 of the said Act. Accordingly, reporting under clause 3(xx)(a) and (b) of the Order is not applicable for the year.

xxi. The reporting under clause 3(xxi) is not applicable in respect of audit of standalone financial statements of the Company. Accordingly, no comment has been included in respect of said clause under this report.

Annexure "I"to Clause 7 (iii) of Annexure A to Independent Auditors Report on the Standalone Financial Statements of MMTC Limited

Mumbai Region

Nature of Statute Nature of Dues Year Amount Involved Authority Nature of Statute
Bombay Sales Tax Act Sales Tax 1989-90 15,01,06,778 Jt. Comm. Of Sale tax (Appeal IV) Bombay Sales Tax Act
Bombay Sales Tax Act Sales Tax 2001-02 45,03,961 Jt. Comm. Of Sale tax (Appeal I) Bombay Sales Tax Act
Bombay Sales Tax Act and Central Sales Tax Sales Tax Act and Central Sales Tax Sales Tax 2004-05 42,00,789 Jt. Comm. Of Sale tax (BST Appeals) Bombay Sales Tax Act
Maharashtra VAT, 2002 Sales Tax 2008-09# 13,04,722 Maharashtra Sales Tax Tribunal Maharashtra VAT, 2002
Maharashtra VAT, 2002 Sales Tax 2010-11# 45,01,471 Maharashtra Sales Tax Tribunal Maharashtra VAT, 2002
Maharashtra VAT, 2002 Sales Tax 2009-10# 17,22,430 Maharashtra Sales Tax Tribunal Maharashtra VAT, 2002
Maharashtra VAT, 2002 Sales Tax 2013-14 13,29,839 Jt. Comm. Of Sale tax (Appeal VI) Maharashtra VAT, 2002
Central Sale Tax,1956 Sales Tax 2011-12 48,25,144* Jt. Comm. Of Sale tax (Appeal VI) Central Sale Tax,1956
Central Sale Tax,1956 Sales Tax 2008-09# 51,81,979 Maharashtra Sales Tax Tribunal Central Sale Tax,1956
Central Sale Tax,1956 Sales Tax 2007-08# 71,97,308 Maharashtra Sales Tax Tribunal Central Sale Tax,1956
Custom Act,1962 Differential Custom Duty 2012-13 23,98,53,708 Commissioner of Customs Custom Act,1962

*An Appeals are filed with same appellate authority for common issue.

#Order from the respective Tribunals have been received in May 2022 and revised amount is not yet determined.

Nature of Statute Nature of Dues Year Amount Authority
TNGST Act Sales Tax Penalty & Interest 2001-02 1,78,566 (SPANDEX YARN) Assistant Commissioner of Commercial Taxes
TNVAT Act Sales tax exhibition returns and penalty and interest 1999-20 78,25,755* High court
TNVAT Act Sales tax exhibition returns and penalty and interest 2007-08,, 2009-10, 2011 61,42,058 Jt. Commissioner of Sales Taxes

Vizag Region

Nature of Statute Nature of Dues Year Amount Authority
APGST* APGST 1968-69 9,28,162 STAT HYD
APGST* APGST 1986-87 2,70,83,841 STAT VIZAG
CST** CST 2007-08 91,537 ADC
VAT APVAT 2013-14 17,31,799 ADC
VAT APVAT 2014-15 4,17,000 ADC
Customs Duty Customs Duty 2009-10 92,92,463 CESTAT, Hyderabad
Customs Duty Customs Duty 2007-08 3,48,58,882 CESTAT, Hyderabad
Customs Duty Customs Duty 2014-15 1,91,21,170 CESTAT, Hyderabad
Customs Duty Customs Duty 2008-09 76,07,136 CESTAT, Hyderabad
Customs Duty Customs Duty 2013-14 76,07,136 CESTAT, Hyderabad
Customs Duty Customs Duty 2021-22 1,50,15,449 CESTAT, Hyderabad

Interest and penalty on ST and Customs upto 31-03-2023 - Rs. 8,37,92,745

*Out of the disputed amounts relating to APGST/VAT/CST the RO has deposited a sum of Rs. 98,70,324/- with the respective authorities.

**Out of the disputed amounts relating to Custom duty the RO had deposited a sum of Rs. 76,07,136/- with the respective authorities.

Kolkata Sub-Region

Nature of Statute Nature of Dues Year Amount Authority
Central Sales Tax,1956 Sales Tax 2013-14 46,07,728 Calcutta High Court
WB Value Added Tax Act, 2003 West Bengal VAT 2013-14 51,46,313 Calcutta High Court

Hyderabad Region

Nature of Statute Nature of Dues Year Amount Authority
CST Central Sales Tax 1989-90 1,49,770 STAT
APGST Sales Tax 1991-92 24,02,576 STAT
APGST Sales Tax 1992-93 13,96,269 STAT-VIZAG
APGST Sales Tax 1993-94 17,62,687 STAT-VIZAG
APGST Sales Tax 1993-94 6,30,615 STAT-VIZAG
CST Central Sales Tax 1993-94 4,41,446 STAT-VIZAG
CST Central Sales Tax 1994-95 2,04,081 AC LTU- VIZAG
APGST Sales Tax 1997-98 58,43,100 STAT-VIZAG
APGST Sales Tax 1999-00 39,04,454 STAT-VIZAG
APGST Sales Tax 2000-01 2,52,926 STAT-VIZAG
VAT VAT 2006-07 6,76,058 AC LTU,STAT
VAT VAT 2007-08 71,000 AC AUDIT
VAT VAT 2008-09 7,84,474 STAT
VAT VAT 2012-13 99,49,808 ADC (CTO)
CST Central Sales Tax 2013-14 4,40,000 STAT
AP VAT-JC VAT 2013-14 22,00,000 AP VAT-JC
Customs CUSTOM DUTY 2021-22 46,47,711 High court of telangana
Customs CUSTOM DUTY 2016-17 5,36,12,040 Commissioner of Customs, Chennai

Corporate Office

Nature of Statute Nature of Dues Year (AY) Amount Forum
Income Tax Act Income Tax 2018-19 2,09,96,930 CIT(A)
Income Tax Act Income Tax 2017-18 1,59,36,207 CIT(A)
Income Tax Act Income Tax 2016-17 3,24,12,680 CIT(A)
Income Tax Act Income Tax 2015-16 6,71,494 CIT(A)
Income Tax Act Income Tax 2013-14 3,11,55,608 High court
Income Tax Act Income Tax 2009-10 2,10,12,618 ITAT
Income Tax Act Income Tax 2009-10 3,39,770 ITAT
Income Tax Act Income Tax 2008-09 52,75,829 CIT(A) / Sup. Court
Income Tax Act Income Tax 2005-06 4,51,65,330 Sup. Court
Income Tax Act Income Tax 2004-05 3,58,34,174 ITAT
Income Tax Act Income Tax 2003-04 1,08,96,834 ITAT
Income Tax Act Income Tax 2001-02 1,17,77,218 High Court
Income Tax Act Income Tax 1999-00 2,85,69,897 ITAT
Income Tax Act Income Tax 1998-99 58,90,533 ITAT
Total 26,59,35,121

Out of the above demand, an amount of Rs. 20,09,99,603 has been deposited by the company. Delhi Region

Name of Statute Nature of Dues Year Amount Authority
UP-VAT LST/CST 1990-91 6,17,588 Moradabad, Allahabad High Court
UP-VAT LST 1991-92 4,70,578 Moradabad, Allahabad High Court
UP-VAT LST 1992-93 2,64,037 Moradabad, Allahabad High Court
UP-VAT LST 1993-94 1,85,100 Moradabad, Allahabad High Court
UP-VAT LST 1987-88 16,35,160 Joint Commissioner (Appeals), Kanpur
UP-VAT VAT 1996-97 6,11,808 Commissioner (Appeals), UP-VAT
UP-VAT VAT+ Interest for non-submission of Form-3B (Gold)& Non-submission of Form 3C1 (Mentha Oil) 2007-08 62,457 Commissioner (Appeals), UP-VAT
Haryana VAT LST 1992-93 4,24,587 Faridabad, Punjab & Haryana High Court, Chandigarh
MP-VAT LST 1999-00 1,50,004 Sales Tax Authority, Indore
MP-VAT LST 1998-99 47,30,692 Assessing Authority, Indore
Custom & Central Excise Customs Duty & Interest on non-export of Gold Jewellery against Gold Loan by Associates 1999-00 2,72,67,919 Pending before Honble Delhi High Court as per directions of Honble Supreme Court of India.
Income Tax Income Tax 2008-09 100 TDS Demand
Income Tax Income Tax 2010-11 to 2011-12 42,340 TDS Demand

*Amount paid under protest out of above is INR. 59,53,490

Jaipur Sub - Region

Nature of Statute Nature of Dues Year Amount Authority
Rajasthan Sales Tax Act Sales Tax 2003-04 1,49,46,540 Rajasthan Kar Board, Ajmer. (Rs. 35.49 lacs have been deposited under protest). Sales Tax Dept. has appealed against the order of DC (Appeals) in Kar Board.
Rajasthan Sales Tax Act Sales Tax 1999-00 26,07,605 Rajasthan Kar Board, Ajmer. Pending with Kar Board against demand on account of 4767 MT DAP u/s 84 of RST Act.
Income Tax Income Tax 2009-10 to 2017-18 23,030 TDS Demand from 2009-10 to 2017-18
Income Tax Income Tax 2018-19 1,330 TDS Demand
Income Tax Income Tax 2020-21 590 TDS Demand

* Total amount deposit under protest Rs. 35,49,446. Bhubaneswar Region

Nature of Statute Nature of Dues Year Amount Authority
Orrisa Sales Tax Interest Penalty 1978-79 26,50,388 High Court of Orissa
Orrisa Sales Tax Odisha Sales Tax 1978-79 2,48,26,709 High Court of Orissa
Orrisa Sales Tax Odisha Sales Tax 1978-79 12,41,336 High Court of Orissa
Orrisa Sales Tax Interest 1978-79 3,57,42,030 Revision petition Flied Before CCT &GST, dispose and stayed till disposal of SLP
Orrisa Sales Tax DEPB 2006-09 23,62,76,042 Odisha Sales Tax Tribunal
Orrisa Sales Tax DEPB 2010-12 8,21,76,347 High Court of Orissa
OVAT Value Added Tax 2013-14 21,64,39,902 Odisha Sales Tax Tribunal
CST (Odisha) Central Sale Tax,1956 2013-14 91,08,96,791 Odisha Sales Tax Tribunal
ET (Odisha) Entry Tax 2013-14 82,55,71,451 Odisha Sales Tax Tribunal
CST (Odisha) Declaration Form Issue 2011-14 91,47,940 Odisha Sales Tax Tribunal
Service Tax Act Service Tax 2003-05 48,785,949 Customs excise & Service Tax Appelate Tribunal
GST Act ITC Disallowed 2017-18 3,07,238 Joint Commissioner Appeal
Central Excise Act Service Tax 2010-11 6,21,25,560 Writ Petition filed before honourable high court on 8-10-2020
Central Excise Act Service Tax 2011-12 6,53,85,916 Writ Petition filed before honourable high court on 8-10-2020
Central Excise Act Service Tax 2009-12 5,65,784,201 Writ Petition filed before honourable high court on 8-10-2020
Central Excise Act Service Tax 2009-11 1,28,80,485 Commissioner of customs Excise & Service Tax, Bhubaneswar
Central Excise Act Service Tax 2012-13 64,14,797 Writ Petition filed before honourable high court on 8-10-2020
Central Excise Act Service Tax 2012-13 7,63,68,637 Writ Petition filed before honourable high court on 8-10-2020
Central Excise Act Service Tax 2013-14 9,94,263 Customs Excise & Service Tax Appeallate Tribunal
Central Excise Act Customs 2012-13 1,49,02,87,738 Customs Excise & Service Tax Appeallate Tribunal
Central Excise & Custom Act Service tax 2014-15 17,71,628 Commissioner of customs Excise & Service Tax , Bhubaneswar
Central Excise & Custom Act Custom Interest and penalty 2017-18 1,32,576 Commissioner of customs Excise & Service Tax , Bhubaneswar
Central Excise Act Service Tax 2017-18 22,081 Dept Filed Appeal

Annexure "N"to Clause 8 of Annexure A to Independent Auditors Report on the Standalone Financial Statements of MMTC Limited

Particulars Amount of Default as on Balance Sheet Date Maximum Period of Default (in days)
Name of the lenders Banks: Principal (Rs.) Interest (Rs.) Principal Interest (Rs.)
Up to 3rd July 2023 4th July to 31st March 2023 Up to 3rd July 2023 4th July to 31st March 2023
Bank of Maharashtra 1,60,00,00,000 4,09,55,960 3,72,84,304 95 95 270
Punjab & Sind Bank 3,00,00,00,000 7,65,84,735 35,97,707 95 95 199
Punjab National Bank 5,00,00,00,000 12,82,99,946 11,26,72,931 95 95 270
Indian Bank (erst. Allahabad Bank) 2,00,00,00,000 5,12,06,978 6,64,57,890 95 95 270
Union Bank of India (erst. Corporation Bank) 5,00,00,00,000 12,65,01,739 11,37,46,250 95 95 270
State Bank of India 3,09,25,00,000 12,73,44,795 - 95 95 -
Karnataka Bank 3,00,00,00,000 8,22,60,741 9,71,76,153 95 95 270
Grand Total 22,69,25,00,000 63,31,54,894 43,09,35,235

Annexure B To the Independent Auditors Report of even date on the Standalone Financial Statements MMTC Limited

Report on the internal financial Controls under section 143(3)(I) of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MMTC 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 Board of Directors of the Company 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". 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 the 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

Our responsibility is to express an opinion on the Companys internal financial controls over financial of the company reporting 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, as specified 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 Institute of Chartered Accountants of India. 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 over financial reporting was established and maintained and if such controls operated effectively in all material respects.

An 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 over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

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:

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

b) 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 authorizations of management and directors of the company; and

c) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting 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, to the best of our information and according to the explanations given to us, the company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting 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 Over Financial Reporting issued by the Institute of Chartered Accountants of India"

For M.L. Puri & Co.
Place: New Delhi Chartered Accountants
Date: 30.05.2023 FRN: 002312N
UDIN: 23095584BGWCXK3321
CA R.C. Gupta
Partner
M.No.095584

Annexure C To the Independent Auditors Report of even date in the Financial

Statements of MMTC LIMITED

Report on the Directions issued by C&AG under section 143(5) of the Companies Act, 2013 for the Financial Year 2022-2023

Sr. No. Key Audit Matter Auditors Response
I 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 system in place to process all the accounting transactions through standalone IT System from which data is transferred to its ERP system. However, in the absence of a modern integrated ERP, certain transactions are manually punched/ recorded in the IT System. Those transactions do not have any implication on integrity of the accounts and any financial implication. List of such transactions which are passed manually in the IT system are as below: Based on our audit procedures, on test basis, wherever the accounting transactions are based on workings outside IT system, no instances of lack of integrity of accounts and no financial implications have been noted / reported.
II 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? The Company had approached all lenders for loan restructuring during the FY 2020-21 and final loan restructuring agreement was finalized/signed during 2021-22 and signed on 10th June 2022, the Company has benefited by INR. 3.94 crore due to this restructuring and the same has been properly accounted for in the books.
III Whether funds received/receivable for specific schemes from central/ state agencies were properly accounted for/ utilized as per its term and conditions? List the cases of deviation. There is no such case.

List of transaction passed manually in ERP system.

S. No. Accounting Area Accounting Activity Impact on integrity and financial implication
1 Sale of retail commodity including IGC Sale of goods in retail business is done through independent software, the data of which is not automatically integrated into ERP without manual intervention. None
2 Closing inventory Valuation of closing inventory at lower of cost or market value is done manually and incorporated in ERP through Journal Vouchers. None
3 Depreciation Depreciation as prescribed in schedule III of Companies Act 2013 is to be computed manually and entered into system through Journal Voucher. None
4 Hedging Entries Accounting entries for hedging are passed manually and entered in ERP system through Journal Vouchers at each period end. None
5 Month End expenses provisions The exercise is done manually and entered into system through Journal Voucher. None

MANAGEMENTS REPLY TO AUDITORS OBSERVATIONS IN THE AUDIT REPORT ON STANDALONE FINANCIAL STATEMENTS FOR 2022-23

S. AUDITORS OBSERVATION MANAGEMENTS REPLY
Qualified Opinion
1. We draw attention to note no 40(f)(a) of the accompanying financial statement, which states that the liability @1.5% of profit before tax ("PBT") for the year in respect of scheme for retirees prior to 01.01.2007 (closed group) has not been recognised even though the Company has reported PBT of INR. 1279.16 crore (P.Y. 120.60 crore), on the basis of affordability. Also, the Company has not provided form PRMBS (open group) @ 4.5% of Basic and DA for serving employees. During the previous year provision in respect of retirees after 01.01.2007 pertaining to FY 2019-20 and 2020-21 had been withdrawn due to loss during these previous years. The management will review the above in the next financial year. The nonrecognition of provision according to the schemes above constitutes a departure from the accounting standards as prescribed under section 133 of the Act. An amount of INR. 19.18 crore (P.Y. 1.81 crore) (1.5% of PBT) and INR. 1.63 crore (P.Y. 3.29 crore) (4.5% of Basic and DA) estimated by the management, should have been provided as per the accounting standards. Accordingly, the provision for PRMBS would have been increased by INR. 20.81 crore (P.Y. 5.10 crore) and net income and shareholders fund would have been reduced by the given amount. MMTC Employees Post Retirement Medical Benefit Trust (PRMBT) has been formed as per approval of 447th BOD meeting held on 15.05.2019 and the same has been operationalised and started functioning as per order dated 23.01.2023.
It is pertinent to mention here that MMTC was showing profits till closure of the quarterly accounts up to December, 2019. However, MMTC finally declared losses for the year 2019-20 when it adopted its accounts in August, 2020 keeping in view the fact that NINL operations were stopped in end of March, 2020 and business interest income on accrual basis due for transactions with NINL was not allowed to be included. The financial health of the company deteriorated due to negative cash flows, reduction of business coupled with COVID affecting all aspects of business across the globe. The financial health of company led to the decision of the Board in view of negative PBT / affordability, sustainability.
Accordingly, MMTC Board of Directors in their 471st meeting held on 08.07.2022 approved reversal of provisions for PRMBS trust for loss making years 1920 & 20-21 and nil PRMBS provision in FY 21-22. No further contributions to PRMBS Trust beyond Rs. 150 crores made in 2019 be provided for until review and affordability. Therefore, it will not be prudent to make any provisions on these accounts and the past provisions in our books of accounts if any, need to be reversed.
Further, as per the Cl 2.9 on ("Companys right to discontinuance of Contribution) of MMTC PRMBT Trust deed signed on 20.09.2019", The company may at anytime, considering the affordability, discontinue its contribution to the trust."
Detailed report on the issue of PRMBT has already been furnished to GAP in past and guidance is solicited for moving further.
Key Audit Matters
1 Refer note no. 34 on the claims not acknowledged as debt incorporating therein claims on account of pending legal cases. There are large numbers of cases pending before various adjudicating authorities. These legal cases involve significant judgement to determine the possible outcome of those disputes and independent legal assessment to pursue the case. Institution of legal cases depends upon the jurisdiction of the court as per the Civil procedure code 1908(CPC). The jurisdiction is determine mainly on the ground of:
a ) Pecuniary Value
b ) Territorial jurisdiction of a court
c ) Subject matter
The company has 5 regional offices, 1 sub-regional office and different divisions to handle the trade activities including accounting of that particular activity. However, in lot of cases the legal cases are pursued at corporate office level while related financial information / transactions are dealt at RO level, thereby difficulties are faced in giving a comprehensive and holistic treatment to the transaction. Likewise in case of immovable property the suit is instituted where the immovable property is situated. The regional offices which has executed a particular agreement and which is the keeper of the records is more suitable and appropriate to pursue the case before court.
However when matters reaches the Supreme Court, then matter is dealt with at corporate office.
Auditors Response: We obtained list of all the pending legal cases handled at Corporate office legal division on 31st March 2023 with a note from management on the changes in the status of the cases from that of last year. We considered the effect of information provided by the management and analysed the impact of financial obligation of the Company. It was suggested to management to have legal cases and financial obligation if any at the same location in order to have clarity in reporting in financial statement.
Emphasis of Matters
^ Restructuring and default in loan repayment We draw attention to Note No. 29 of the accompanying financial Statements, which states that Consequent upon receipts of divestment proceeds from NINL on 4.7.2022 an amount of INR. 2551.44 crore as on 31.3.2022 have been paid towards principal and normal agreed interest upto 31.3.2022. An amount of Rs. 106.41 crore out of which Rs. 63.68 crore pertains to interest from 01.04.2022 to 31.03.2023 & remaining amount of Rs. 42.73 crore relates to additional interest and other charges under RTR subject to final settlement with banks. The matter is now closed with State Bank of India and Punjab & Sind Bank. Other lender banks are also taking up their matter with appropriate authorities. The management is of the view that the remaining banks shall take into consideration the concession if any and no addition provision is required to be made. Our opinion is not modified in respect of the above matter. Consequent upon receipts of divestment proceeds from NINL on 4.7.2022 an amount of INR. 2551.44 crore as on 31.3.2022 have been paid towards principal and normal agreed interest up to 31.3.2022. An amount of Rs. 106.41 crore out of which Rs. 63.68 crore pertains to interest from 01.04.2022 to 31.03.2023 & remaining amount of Rs. 42.73 crore relates to additional interest and other charges under RTR subject to final settlement with banks. The matter is now closed with State Bank of India, Punjab & Sind Bank, Bank of Maharastra, Punjab National Bank and Indian Bank. Union Bank of India has also approved concession in principle. Remaining lender bank i.e. Karnataka Bank is also taking up the matter with their appropriate authorities. Provision relating to penal and additional interest made in FY 2022-23 has been reversed accordingly. The management is of the view that the remaining one bank ie. Karnataka Bank shall take into consideration the concession if any and no additional provision is required to be made.
2. Non-compliance of regulation 33 of SEBI and section 49 of the Act We draw attention to Note No. 34 (vii) to the accompanying financial statements, which states that the Company has created a contingent liability of INR 0.07 crore (P.Y. 0.07 crore) on account of demand raised by Stock Exchange Board of India (SEBI) in relation to noncompliance of regulation 33 of SEBI. The management is in the process of having these demands waived and thus no provision has been made in the financial statements Our opinion is not modified in respect of the above matter. These demands were for not having sufficient number of Independent Directors on the MMTC Board which was beyond the MMTCs control. Division has written to Stock Exchanges for waiver of these penalties levied. MoC & I have appointed three independent directors including one woman Independent Director.
3 Non-compliance of Section 149 of the Act We draw attention to Note No. 34 (vii) to the accompanying financial statements, which states that an amount of INR. 0.01 crore is included for non-compliance of appointment of Independent Director within the stipulated time. The management is in the process of receiving an approval from the concerned ministry, thus no provision has been made in the financial statements Our opinion is not modified in respect of the above matter. MoC & I have appointed three independent directors including one woman Director. MMTC has requested for waiver of penalties levied for non-compliances in appointment of Independent Directors which was beyond MMTCs control.
4. Write-off of Foreign Debtors We draw attention to Note No. 36 (n) to the accompanying financial statements, which states that an amount of INR. 0.10 crore on account of foreign debtors outstanding for more than twenty years was written off with the approval of the Board of directors of the Company during the year and the provisions created earlier for bad and Doubtful Debts/Claims/Loans were withdrawn. The management of the Company is under the process of taking an opinion on the FEMA guidelines through an expert and action (if any) will be taken accordingly. Our opinion is not modified in respect of the above matter. As per the opinion of consultant, since the export written off during FY 2022-23 does not exceed the limit of 5% of total export proceeds realized in the calendar year 2021and on satisfaction of other conditions, the self write off of foreign receivables amounting to INR 9,66,172.86 should be in compliance and allowed under FEMA Law.