NLC India Ltd Auditor Reports

To

The Members of NLC INDIA LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of NLC INDIA LIMITED ("the Company") ("NLCIL"), which comprise the Standalone Balance Sheet as at 31st March, 2025, the Standalone Statement of Profit and

Loss (including other Comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended including a summary of the material accounting policies and other explanatory information in which are included the Returns for the year ended on that date audited by the branch auditors of the Companys branches located at Talabira and Barsingsar (hereinafter referred to as

"Standalone Financial Statements").

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 31st March, 2025, its profit (including other comprehensive income), the 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 Standalone

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 Standalone Financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence obtained by us and the audit evidence obtained by the branch auditors in terms of their reports referred to in "Other Matters" section below, is sufficient and appropriate to provide a basis for our opinion on the Standalone Financial Statements.

Material Uncertainty Related to Going Concern

We draw attention to Note 59 (c) of the Standalone Financial Statements, wherein the non-availability of adequate quantum of land for lignite mining operations at Neyveli mines and power generation have been elaborated upon. Such non-availability of lignite mining land may cast significant uncertainties relating to the operations of the Company, and eventually the Companys ability to continue as a going concern in future. Our Opinion is not modified in respect of this matter.

Emphasis of Matter

We draw attention to the following matters in the Notes to the Standalone Financial Statements: 1. Note 24(g), with regard to amount billed on VSVS to DISCOMs and the matter is sub judice, the Company has retained the regulatory deferral liability for the disputed amount of 386.51 Crore, along with accrued interest of 16.52 Crore on the amount already received. Accordingly, a total regulatory deferral liability of 403.03 Crore has been recognized as of March 31, 2025 in this regard. 2. Note 54, with regard to the determination of the transactions with MSME vendors and balances thereof, have been done based on the certificate received from the respective parties as made available in the GEM Portal system. The disclosures in respect of MSME vendors, interest liability thereon as per MSME Act, Income tax computations as such need to be ascertained from MSME Vendor are computed manually and accounted accordingly.

3. We draw attention to Note 46 to the statement, which states that the Company has filed tariff petitions for the control period 2024-29 and truing-up petitions for the control period 2019-24 within the statutory timelines. 4. Note 5 of the statement, which describes the Companys updated accounting policy for capitalization and amortization of ongoing mine development costs. During the current financial year, the Company has revised its policy to provide that ongoing development costs incurred after the Commercial Operation Date (CoD) of the respective mines, as specified in the approved mining plan, are classified as "Ongoing Development Cost" and capitalized until the mine achieves Peak Rated Capacity (PRC). These capitalized costs are amortized over a period of 20 years from the date of capitalization or the life of the mine, whichever is earlier. In this regard the company has accounted an amount of H 64.7 Crore in CWIP.

5. Note 7(a)(b) which states that the during the Financial

Year the Company has exercised its rights issue option and made additional investment of 33,17,49,798 equity shares in its subsidiary, M/s Neyveli Uttar Pradesh Power Limited (NUPPL), at H 10 per share, aggregating to H 331.75 Crore. As a result, the total investment in the subsidiary as on 31stMarch 2025 stood at H 2,969. 13 Crore.

6. Note 7(a)(c) which states that the during the Financial Year the Company has subscribed to additional equity shares of 11,96,50,000 equity shares in its subsidiary, M/s NLC India Renewable Limited (NIRL), at H 10 per share, aggregating to H 119.65 Crore. As a result, the total investment in the subsidiary as on 31st March 2025 stood at H 119.75 Crore.

Our Opinion on the Standalone Financial Statements is not modified in respect of the above matters.

As reported by the auditor of the Talabira Branch in their Independent Auditors Report dated 13th May, 2025 is below:

Note no. 23 (b) of notes to Financial Statements- regarding provision made during the year, against disputed mining charges and HPC wages amounting to H 160.10 Crore.

Opinion of the auditors of the branches with respect to branches financial statements is not modified in respect of the above matters.

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. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.

The following have been considered as Key Audit Matters:

SI. No. Key Audit Matter	Auditors Response
1 Expected Credit Loss on Trade Receivables
Ind AS 109 - Financial instruments (Ind AS 109) requires the Company to provide for impairment of its financial instruments (designated as amortized cost or fair value through other comprehensive income) using the expected credit loss (ECL) approach. Such ECL allowance is required to be measured considering the guiding principles mentioned in the Standard.	Our audit procedures performed included the following:
In the process of applying such principles and other requirements of the Standard, a significant degree of judgment has been applied by the management. The ECL in respect of trade receivables represents managements best estimate of the loss allowance. The ECL allowance is computed based on a simplified model considering ageing of trade receivables and also trend of collection of dues.	• We understood the process of ECL estimation and tested the design and operating effectiveness of key controls around data extraction and validation;
The calculation of ECL allowance is a complex area considering file profile and background of customers and requires management to make significant assumptions on customer payment behaviour and other relevant risk characteristics when assessing the historical information and estimating the level and timing of expected future cash flows.	• We, having regard to profile and the background of the customers, collection of dues and the measures of the Govt(s) in regard to settlement of dues by such customers, understood file methodology used by the management to arrive at their ECL provision and examined certain assumptions used by file Company;
The provision for ECL on trade receivables amounts to Rs.267.95 Crore as at 31st March, 2025. Refer Note 10(a)(b) to file Standalone Financial Statements.	• We also tested the arithmetical accuracy and assessed the judgments used in the managements model used to calculate provision for credit losses;
	• We have initiated confirmation of balances and the differences, if any, were reconciled by the Management in respect of confirmations received. We have reviewed file same and noted on the explanations provided by the management in arriving at the loss allowance for the year ended 31st March, 2025; and
	• We assessed the disclosures included in the Ind AS Financial Statements with respect to such allowance/ estimate are in accordance with the requirements of Ind AS 109 and Ind AS 107 - Financial Instruments: Disclosures.
2 Property, Plant & Equipment and Intangible Assets
Property, Plant and Equipment and Intangible Assets amounting to Rs. 17587.96 Crore represents significant balances recorded in the Balance Sheet in the Standalone Financial Statements.	Our audit procedures performed included the following:
There are areas where management judgement impacts the carrying amount of property, plant and equipment, intangible assets and their respective depreciation / amortization rates.	• We evaluated the assumptions made by management in the determination of carrying values and useful lives to ensure that these are consistent with the principles of Ind AS 16 - Property, Plant and Equipment and Ind AS 38 - Intangible Assets;
These includes the decision to capitalise or expense costs; the timeliness of the capitalization of the assets; useful life of file assets and the use of the management assumptions and estimates for the determination or the measurement and recognition criteria for assets retired from active use.	• We assessed whether the carrying values and the useful lives were reasonable by challenging managements judgements through comparing the useful lives prescribed in Schedule II to file Companies Act, 2013, rates/ guidelines prescribed by Central Electricity Regulatory Commission (CERC), guidelines issued by Ministry of New and Renewable Energy (MNRE) and the useful lives of certain assets as per the technical estimate of the management;
Due to file materiality in the context of Balance Sheet of the Company and the level of judgement and estimates required, we consider this to be as area of significance and considered to be a key audit matter. Refer Note 2 and 4 to the Standalone Financial Statements.	• We compared the useful lives of each class of asset in the current year to the previous year to determine whether there were any significant changes in the useful lives of assets;
	• We tested the controls in place over the property, plant and equipment and intangible assets, evaluated the appropriateness of capitalisation policies, performed tests of details on costs capitalised and assessed the timeliness of capitalisation including decapitalisation of assets retired from active use and the application of the asset life;
	• In performing these substantive procedures, we assessed the judgements made by management including the nature of underlying costs capitalised; the appropriateness of asset lives applied in the calculation of depreciation and amortization; and
	• We have observed that the management has regularly reviewed the aforesaid judgments and there are no material changes.
3 Revenue from Operation - Sale of Power
The company records revenue from sale of power as per the principles enunciated under Ind AS 115, based on tariff approved by the Central Electricity Regulatory Commission (CERC) as modified by the orders of Appellate Authorities.	We have obtained an understanding of the CERC Tariff Regulations, orders, circulars, guidelines and the Companys internal circulars and procedures in respect of recognition and measurement of revenue from sale of power comprising of capacity and energy charges and adopted the following audit procedures:
This is considered as key audit matter due to the nature and extent of estimates made as per the CERC Tariff Regulations, which leads to recognition and measurement of revenue from sale of power being complex and judgemental.	• Evaluated and tested the effectiveness of the Companys design of internal controls relating to recognition and measurement of revenue from sale of power.
The Sale of Power amounts to Rs. 7323.59 Crore for the year ended 31st March, 2025. Refer Note 25 to the Standalone Financial Statements.	• Examined the Companys material accounting policies with respect to assessing compliance with Ind AS 115 "Revenue from Contract with Customers".
	• Verified the accounting of revenue from sale of energy based on provisional tariff computed as per the principles of CERC Tariff Regulations 2024.
	• Assessed the disclosures in accordance with the requirements of Ind AS 115 "Revenue from Contract with Customers".
4 Financial Liabilities - Borrowings
The standalone balance sheet as of 31st March, 2025, reflects financial liabilities-Borrowings totalling Rs. 7524.97 Crore. These liabilities encompass various forms of borrowing, comprising bonds issued, bank borrowings, and foreign currency borrowings. Refer Note 17(a) and 21(a) of the Standalone Financial Statements.	Our key audit procedures included the following:
The above includes an amount of Rs. 2518.23 Crore classified as current liabilities.	• We have evaluated the appropriateness of the accounting policies and disclosures related to financial liabilities.
There may be complex accounting requirements around tlie subsequent measurement, and presentation of financial liabilities.	• Tested the accuracy and completeness of financial liability balances by examining supporting documentation like debt agreements and analysed debt covenant calculations prepared by management and considered the existence of any potential breaches.
Evaluating the suitability of debt covenants and assessing the potential risk of covenant violations necessitates substantial auditor judgement.	• Assessed the adequacy of disclosures in the financial statements related to financial liabilities.
5 Inventory - Lignite and Stores & Spares;	Our audit procedures performed included the following:
As at 31st March 2025, the Company held a significant quantity of lignite inventory at various stock points, along with a substantial balance of stores and spares used in operations and maintenance.	• Conducted walkthroughs and detailed review of inventory movement and control processes across all lignite stock points from excavation to consumption.
Determination of lignite quantities and valuation involves complexities due to the nature of the material, volume of movement, and reliance on stock point level controls. Additionally, judgment is involved in estimating losses, applying appropriate valuation methods, and ensuring classification between capital and revenue for stores and spares. Given the materiality of inventories and the significant audit effort involved, this was considered a key audit matter.	• Performed physical verification of lignite at all stock points, and for stores & spares at selected locations as at year-end.
	• Reviewed excavation records, transfer records, consumption logs, and reconciliations maintained at each stock point.
	• Held discussions with officials at various stock points to understand operational processes and documentation flow.
	• Evaluated managements inventory valuation methodology for compliance with applicable accounting standards.
	• Verified cost records, tested valuation rates, and reviewed aging and obsolescence of stores & spares.
	Assessed the adequacy of related disclosures in the financial statements.

Information other than the Standalone Financial Statements and Auditors Report thereon

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Directors Report including Annexures to Directors Report and Business Responsibility & Sustainability Report, but does not include the Standalone Financial Statements, Consolidated Financial

Statements and our Auditors report thereon. The other information is expected to be made available to us after the date of this Auditors report.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone 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 Standalone Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

On receipt of other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and we shall:

(a) If the material misstatement is corrected, perform necessary procedure to ensure the correction; or

(b) If the material misstatement is not corrected after communicating the matter to those charged with governance, take appropriate action considering our legal rights and obligations, to seek to have the uncorrected material misstatement appropriately brought to the attention of users for whom this Auditors report is prepared.

Responsibilities 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 Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance (including Other Comprehensive Income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone 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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

These Board of Directors are also responsible for overseeing the

Companys financial reporting process.

Auditors Responsibility 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 Standalone 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 Standalone 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 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 Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the Company and its branches to express an opinion on the Standalone Financial Statements.

We are responsible for the direction, supervision and performance of the audit of the financial statements of the Company, for which we are the independent auditors. In respect of the branches included in the Standalone Financial Statements, which have been audited by the respective branch auditors who remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

Our responsibilities in this regard are further described in the section titled ‘Other Matters in this audit report.

Materiality is the magnitude of misstatements in the Standalone 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 Standalone 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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters.

We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters a. We did not audit the financial statements of two (2)

Branches located at Talabira and Barsingsar included in the

Statement, whose financial statements reflect total assets of H 5745.93 Crore as at 31st March, 2025 and total income of H 2624.06 Crore for the year ended 31st March, 2025, total net profit before tax of H 909.21 Crore for the year ended 31st March, 2025 and total comprehensive income of H 909.21 Crore for the year ended 31st March 2025, and net cash outflow of H 5.69 Crore for the year ended 31st March, 2025 as considered in the Statement. The financial statements 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 reports of such branch auditors and the procedures performed by us as stated under Auditors

Responsibilities section above. b. The standalone financial statement for the year ended

March 31, 2024, have been audited by the predecessor joint statutory auditors M/s. Manohar Chowdhry & Associates and M/s. Sundaram & Srinivasan, who have expressed an unmodified opinion on such standalone financial statements of the Company based on their audit. c. Certain Debit/Credit balances pertaining to Debtors/

Creditors are pending independent confirmation and consequential reconciliation thereof. d. Regulation 17(1) of the SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015, mandates that at least half of the directors on the board should be independent directors. The Company has yet to fulfil this requirement, leading to penalties imposed by the

Stock Exchanges. e. During the year, the Company has not complied with the requirements relating to the appointment of at least 1 independent nominee director on the Board of NLC Tamil Nadu Power Limited (NTPL) and Neyveli Uttar Pradesh Power Ltd (NUPPL), which are unlisted material subsidiaries, as required under Regulation 24(1) of SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015. In case of NUPPL it was complied up to 31.10.2024.

f. Regulations 17(2A), 18(2), and 19(2A) of the SEBI (Listing

Obligations and Disclosure Requirements) Regulations, 2015, mandate the presence of a minimum number of independent directors in meetings of the Board, Audit Committee and the Nomination and Remuneration

Committee (NRC). The Company complied with these requirements during the FY except for the meeting held during the period 01.11.2024 to 28.03.2025 due to the expiry of the tenure of three Independent Directors on 31.10.2024, and the subsequent appointment for the position were made on 29.03.2025 therefore provisions of the said regulations have been complied with as on

31.03.2025. g. Due to the non-availability or non-functional condition of the boiler bunker metering systems at the thermal power stations, the same was not considered during the process of year end physical inventory verification. h. PPE includes mining land comprising certain blocks of lands that are currently under excavation or already excavated. The formal transfer of title in the revenue records in the name of the Company for those blocks of lands is yet to be completed. The Company is in possession of the land based on an Award issued by the Government of Tamil Nadu, and excavation activities are being carried out accordingly. The process of submitting the necessary documents to the relevant authorities for updating the Companys name in the revenue records is stated to be in progress.

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 Act, we give in "Annexure-I" a statement on the matters specified in paragraphs 3 and 4 of the said Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that: a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books including for the matters stated in the paragraph 2(k)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended;

c. The reports on the accounts of the Branch Offices of the Company audited under Section 143(8) of the Act by the Branch 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 (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;

e. In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under

Section 133 of the Act;

f. The matter described in the "Material Uncertainty

Related to Going Concern" paragraph above, in our opinion, may not have an adverse effect on the functioning of the Company;

g. The Company being a Government Company, the provisions of Section 164(2) of the Act relating to disqualification of directors is not applicable in view of the Notification No: G.S.R, 463(E) dated 5th June, 2015, issued by the Ministry of Corporate Affairs; h. The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2(b) above on reporting under Section 143(3) of the Act and paragraph 2(k)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended;

i. With respect to adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we give our report in "Annexure-II". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting with reference to

Standalone Financial Statements;

j. The Company being a Government Company, the provisions of Section 197 of the Act relating to managerial remuneration is not applicable in view of the Notification No: G.S.R, 463(E) dated

5th June, 2015, issued by the Ministry of Corporate

Affairs. Accordingly, reporting in accordance with requirement of provisions of Section 197(16) of the Act is not applicable to the Company; and

k. 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. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements – Refer to Note 52 to Standalone Financial Statements;

ii. The Company has long term contracts for coal mining, power sale, lignite / coal sale, O&M / AMC Contracts, project execution etc. The Company has assessed all these contracts as at 31st March, 2025, and concluded that there were no material foreseeable losses that needs to be considered on account of these contracts. The Company did not have any derivative contracts as at 31st March, 2025;

iii. There has been no delay in transferring amounts, 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 (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;

(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; and

(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. (a) The final dividend paid by the Company during the year, which pertains to previous year 2023-24 is in accordance with Section 123 of the Act, to the extent it applies to payment of dividend;

(b) The interim dividend declared and paid by theCompanyduringtheyearisinaccordancewithSection123 of the Act; and

(c) The Board of Directors of the Company have proposed final dividend for the year

2024-25 which is subject to the approval of the Members at the ensuing Annual

General Meeting. The amount of dividend proposed is in accordance with section 123 of the act, until the date of this report.

However, the aggregate of interim dividend paid by the Company during the FY 2024-25 and proposed dividend for the FY 2024-25 is less than the minimum dividend criteria prescribed under the guidelines issued by Department of Investment & Public Asset

Management (DIPAM). The Company vide its letter dated 14th March, 2025 had applied for exemption from payment of minimum dividend for the FY 2024-25 as prescribed under DIPAM guidelines and the same is pending for approval.

vi. Based on our examination, which included test 3. checks, the Company has used SAP accounting software for maintaining its books of account, which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year. During the course of our audit, we did not come across any instances of the audit trail feature being tampered with and the audit trail has been preserved by the Company as per the statutory requirements for record retention.

Further, in relation to the 7 external applications that were integrated with SAP accounting software, in connection with Auction & Tender System, Integrated Weighment Tracking System, Employees Advance and Reimbursement Claims, GST Central Invoicing System & House Allotment, Rent Accounting & other Township related Management System, based on the audit procedures, information and explanation given to us, we confirm that the audit trail (edit log) facility has been enabled from August 6, 2024 and the audit trail has been preserved by the Company as per the statutory requirements for record retention. 3. As required by Section 143(5) of the Act, our comments in regard to the directions and sub-directions issued by the Comptroller and Auditor General of India is given in "Annexure – III".

Annexure-I to the Independent Auditors Report on the Standalone Financial Statements

With reference to Annexure-I referred to in paragraph 1 in ‘Report on Other Legal and Regulatory Requirements of the Independent Auditors Report to the members of the Company on the standalone financial statements for the year ended 31stMarch, 2025, we report that:

(i)

(a)

(A) The Company is maintaining proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment (PPE).

(B) The Company is maintaining proper records showing full particulars of intangible assets.

(b) The Company has carried out a physical verification of

Property, Plant and Equipment (PPE), excluding assets held for sale, as the dismantling process for these assets had already commenced during the year. This verification aligns with the Companys planned programme of conducting such verification once every two years, which is considered reasonable given the size of the Company and the nature of its assets.

(c) As informed by the management, the Company is in possession of Title deeds/Assignment deeds/GOs in respect of immovable properties. However, in view of substantial volume of land documents held by the Company and reconciliation of the same with the PPE register which is in progress, verification of the title deeds was rendered difficult. It was also observed on test check of available documents that there were instances of title deeds still lying in the name of previous owner. We have been informed that the management is in process of making submissions to the concerned authorities for updating its name in the revenue records for the properties where the title deeds are still in the name of the previous owners. In view of this, the title deeds of the lands cannot be directly linked with the PPE register maintained by the Company.

As per expert legal opinion furnished to us, the ownership of the land acquired between the incorporation of the Company until the year 1977 and between the years 1997 to 2001 is subject to conditions attached by Government of Tamil Nadu in the respective assignment deeds.

Immovable properties of land, whose title deeds have been deposited with banks as security for term loans have been verified by us based on the documents provided to us by the Company relating to registration of charges with Ministry of Corporate Affairs.

(d) According to the information and explanations provided to us, the Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets during the year ended March 31, 2025. Accordingly, reporting on clause 3(i)(d) of the Order is not applicable to the Company.

(e) According to the information and explanations provided to us, there are no proceedings initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions

Act, 1988 and rules made thereunder. Accordingly, reporting on clause 3(i)(e) of the Order is not applicable to the Company.

(ii)

(a) According to the information and explanation provided to us, the physical verification of inventory have been conducted at reasonable intervals by the Stock verification team under Perpetual Inventory System on continuous basis. In our opinion, the coverage and the procedure of such verification by the management is appropriate. Discrepancies of 10% or more in aggregate for each class of inventory were not noticed on such physical verification.

(b) The Company has been sanctioned working capital limits in excess of five crore rupees in aggregate from bank during the year on the basis of security of current assets of the Company. There are few instances noticed wherein the quarterly returns/statements filed with the bank are not in agreement with the books of account of the Company.

However, considering the drawing power and the limits utilised by the Company during the year, the differences are not significant warranting detailed comments.

(iii) According to the information and explanations given to . us and on the basis of our examination of the records of the Company, the Company has made investments in and granted unsecured loans during the year to a subsidiary company and employees.

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, during the year, the Company has provided loans to a subsidiary company and employees as follows:

Particulars	Loans
Aggregate amount granted/ provided during the year
Subsidiary	1064.05
Others – Employees	20.16
Balance outstanding as at balance sheet date in respect of above cases
Subsidiary	695.49
Others – Employees	26.95

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the investments made and the terms of the loans provided during the year are not prejudicial to the interest of the Company.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in the case of loan to subsidiary, the schedule of repayment of principal and payment of interest have been stipulated and the repayments have been regular.

In the case of loans to employees, the terms of the loans are governed by the Companys policies. The principal and interest have generally been regularly recovered at periodical intervals as laid down in such policies.

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no material overdue amounts as at the

Balance Sheet date. Accordingly, reporting under clause 3(iii)(d) of the Order is not applicable.

(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there were no cases where the loans have been renewed or extended or fresh loans granted to settle the overdue of existing loans given to the same parties in respect of loans which had fallen due during the year.

(f) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not granted any loan which is repayable on demand or without specifying any terms or period of repayment. Accordingly, reporting under the other requirements of clause 3(iii)(f) is not applicable.

(iv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the loans given, investments made and guarantee provided by the Company are in compliance with the provisions of Section 185 and 186 of the Act read with Ministry of Corporate Affairs notification number G.S.R. 463(E) dated 5thJune, 2015.

(v) The Company has not accepted any deposits or amounts which are deemed to be deposits from the public within the meaning of sections 73 to 76 or any other relevant provisions of the Act. In respect of overdue earnest money deposits and security deposits, Management is of the view that overdue earnest money deposits and security deposits of suppliers/contractors appearing in the books are in the nature of retention money for performance of contracts for supply of goods and services and accordingly, not to be treated as deemed deposits by virtue of amendment in rule 2, sub rule (1), clause (c) of the Companies (Acceptance of Deposits) Amendment Rules 2016.

. (vi) We have broadly reviewed the books of account 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 in respect of the Companys products to which the said rules are made applicable and are of the opinion that prima facie, the prescribed records have been maintained. We have however not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

(vii)

(a) Based on the information and explanations given to us and on the basis of our examination of the records of the Company, undisputed statutory dues including Provident Fund, Income-tax, Goods and Services Tax, Customs Duty, Royalty, Cess and other material statutory dues applicable to it, have generally been regularly deposited by the Company with the appropriate authorities.

According to the information and explanations given to us and on the basis of our examination of the records of the Company, no undisputed amounts payable in respect of Provident Fund, Income-tax, Goods and Services Tax, Customs Duty, Royalty, Cess and other material statutory dues were in arrears as at 31st March 2025, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Provident Fund, Income-tax, Goods and Services Tax, Customs Duty, Royalty, Sales Tax, Service tax, Duty of Customs, Value Added Tax, Cess and other Statutory dues which have not been deposited as on 31st March, 2025 on account of any dispute except as reported below:

Statement of Disputed Dues

Name of the statute	Nature of the dues	Demand Amount	Amt Deposited under protest	Period to which the amount relates	Forum where dispute is Pending
		(Rs. in Crore)	(Rs. in Crore)
Income Tax Act	Income Tax	67.45	-	FY 2006-07	Assessing Officer
		0.26	-	FY 2006-07	ITAT
		0.32	-	FY 2009-10	ITAT
		0.40	-	FY 2011-12	ITAT
		1.46	-	FY 2012-13	Assessing Officer
		171.04	-	FY 2012-13	High Court
		1.53	-	FY 2013-14	Assessing Officer
		120.76	-	FY 2013-14	High Court
		23.82	-	FY 2014-15	High Court
		13.48	-	FY 2017-18	Assessing Officer
		0.17	-	FY 2018-19	Assessing Officer
Finance Act, 1994	Service Tax	0.51	0.07	Jul 2012 to Mar 2014	CESTAT
		0.26	0.03	Apr 2014 to Mar 2015	CESTAT
		1.06	-	Jun 2008 to Mar 2012	CESTAT
		0.73	0.07	Apr 2015 to Jun 2017	CESTAT
		0.08	0.01	Apr 2015 to Jun 2017	CESTAT
		38.55	-	Oct 2014 to Jun-2017	Madras High Court
		4.49	-	FY 2015-16	Madras High Court
CGST & SGST Act, 2017	GST	24.01	-	Aug 2018 to March 2019	Additional/ Joint Commissioner of Central Tax and Central Excise, Rourkela
CGST & SGST Act, 2017	GST	0.13	-	Oct-2017	Superintendent of GST and Central Excise, Chennai
CGST & SGST Act, 2017	GST	26.72	-	Apr 2018 to Mar 2021	Additional Commissioner of GST and Central Excise, Chennai
Central Excise Act 1944	Clean Environment Cess and Excise Duty	179	-	As on 30-06-2017	Madras High Court
Tamilnadu VAT Act, 2006	Sales tax	454.85	112.43	FY 2011-12 to FY 2015-16	Madras High Court
Customs Act,1969	Custom Duty	14.82	9.83	FY 2006-07	Supreme Court
Mines and Mineral (Development and Regulation) Act, 1957	Royalty	429.92	-	March 2021-June 2022	District Collector, Cuddalore
Mines and Mineral (Development and Regulation) Act, 1957	Surface Right Compensation	6.98	-	2023-24	District Collector, Cuddalore

(viii) According to the information and explanations provided to us, the Company has not surrendered or disclosed any transaction, previously unrecorded in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year.

Accordingly, the requirement to report on clause

3(viii) of the Order is not applicable to the Company.

(ix)

(a) In our opinion and on the basis of information and explanations given to us by the management, we are of the opinion that the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been declared a willful defaulter by any bank or financial institution or other lender.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, term loans were applied for the purpose for which the loans were obtained.

(d) According to the information and explanations given to us and on the basis of our examination of the records 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) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries or joint venture. Accordingly, clause 3(ix) (e) of the Order is not applicable.

(f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries or joint venture. Accordingly, clause 3(ix) (f) of the Order is not applicable. (x)

(a) In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, clause 3(x) (a) of the Order is not applicable.

(b) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly or optionally convertible debentures during the year.

Accordingly, clause 3 (x)(b) of the Order is not applicable to the Company.

(xi)

(a) According to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

(b) No report under section 143(12) of the Act has been filed by the auditors in Form ADT 4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government during the year.

(c) As represented to us by the management and according to the information given to us, there are no whistle-blower complaints received by the Company during the year.

(xii) The Company is not a Nidhi Company. Hence, reporting under clause 3(xii) (a), (b), and (c) of the order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with section 177 and 188 of the Act, wherever applicable. The Company, being a government company, transactions with other government companies are exempt from compliance of first and second proviso to sub-section (1) of Section 188 of the Act, in terms of Notification No: G.S.R. 463(E). dated 5th June 2015, issued by Ministry of Corporate Affairs, Government of India. Details of such transactions have been disclosed in the Standalone

Financial Statements as required by the applicable Ind AS.

(xiv)

(a) According to the information and explanations provided to us and based on our examination of the records of the Company, in our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(b) The internal audit reports of the Company issued for the year under audit have been considered by us.

(xv) According to the information and explanations given to us and as represented to us by the management and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or directors of its subsidiary or associate company or persons connected with him. Accordingly, clauses 3(xv) of the Order is not applicable.

(xvi)

(a) According to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the RBI Act, 1934 (2 of 1934).

Accordingly, provisions of clause 3 (xvi) (a) of the order are not applicable.

(b) According to the information and explanations given to us, the Company has not conducted any Non-

Banking Financial or Housing Finance activities.

Accordingly, provisions of clause 3(xvi)(b) of the

Order are not applicable.

(c) According to the information and explanations given to us, the Company is not a Core Investment Company

("CIC") as defined in the regulations made by the Reserve Bank of India. Accordingly, provisions of clause 3(xvi)(c) of the Order are not applicable.

(d) According to the information and explanations given to us, the Group has no CIC. Accordingly, provisions of clause 3(xvi)(d) of the Order are not applicable.

(xvii) The company has not incurred cash losses in the current and in the immediately preceding financial year.

Accordingly, provisions of clause 3(xvii) of the Order is not applicable.

(xviii) There has been no resignation of the statutory auditors during the year. Accordingly, 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 financial assets and payment of financial liabilities, our knowledge of the Board of

Directors and management plans, though a material uncertainty related to Going Concern of the Company exists as at the Balance Sheet date, as far as it relates to availability of lands for mining, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that the 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. We also draw reference to the section "Material Uncertainty Related to

Going Concern" in our main Audit Report.

(xx) In our opinion and according to the information and explanations given to us, there is no unspent amount under sub-section (5) of Section 135 of the Act pursuant to any project. Accordingly, clauses 3(xx)(a) and 3(xx)(b) of the Order are not applicable.

(xxi) Reporting under clause (xxi) of the Order is not applicable as the same is required to be reported only in case of consolidated financial statements.

Annexure-II to Independent Auditors Report on the Standalone Financial Statements

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 over financial reporting of NLC INDIA LIMITED ("the Company") as of 31st March, 2025 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 based on the internal control over financial reporting criteria established by the Company, considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting, issued by the Institute of Chartered Accountants of India (ICAI).

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We have 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, to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting 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 over financial reporting included obtaining an understanding of internal financial st 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:

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

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

(3) 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 aspects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2025, 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 ICAI Except the areas listed below:

During the course of Audit, we have observed that Internal control system has to be strengthened commensurate with the size of the company and the nature of business in the following:

Reconciliation of the below-mentioned records at following locations:

• In Mine, Lignite bench - Energy meter reading and Survey report

• Stock Issue from Mines to TPS - Reclaimer record and Control room record

• Stock consumption in boiler - mill run time report and Mines computation

• Closing stock of lignite in TPS - Mines report and TPS report

Other Matters

We did not audit the Internal Financial Control over Financial Reporting of two (2) branches located at Talabira and Barsingsar included in the Standalone Financial Statements of the Company. The adequacy of internal financial controls system over financial reporting and the operating effectiveness of such internal financial controls over financial reporting in so far as it relates to the above two branches is solely based on the corresponding auditors reports of the respective branch auditors.

Annexure-III to Independent Auditors Report on the Standalone Financial Statements

Comments in regard to the directions and sub-directions issued by the Comptroller and Auditor General of India

Directions u/s 143(5) of the Companies Act, 2013	Impact on Auditors reply on action taken on the directions financial statement
1. Whether the company has system in place to process all the accounting transactions through	As per the information and explanation given to us the Company has a system in place to process NA all the accounting transactions through IT system. SAP ERP has been implemented for the processes like Financial Accounting (FI), Controlling (CO), Material Management (MM), Sales and Distribution (SD), Production Planning (PP), Project systems (PS), Plant maintenance (PM),
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.	Fund Management (FM) and Human Capital Management (HCM). "The Company is also using other support softwares which are integrated to SAP ERP and those transactions are also through IT systems, like NLCIL eAuctioning & Tendering System (NeAT); Contract Labour Management System (CLMS); Integrated Weighment Tracking System (IWTS); Integrated Hospital Management System (IHMS); myLaptop Portal; Furniture Portal; Retirees Portal; Bill Tracking System; GST Central Invoicing System; eRecruitment System; House Allotment, Rent Accounting & other Township related Management System;
	There was a malware attack on 2nd July, 2024 on servers. Dell (OEM) team engaged for recovery. Incident was reported after 4 days i.e., on 6th July, 2024 to SEBI. Inspection report with respect to proper recovery cum authenticity of data, preservation hasnt been furnished to us.
	As per the information and explanation given to us by the management, the company has not carried out any system audit covering implications of processing of such accounting transactions, any consequential effect on the integrity of accounts, along with related financial implications, etc.,
	Based on our examination of records on sample basis and other audit procedures carried out and as per the information and explanation given to us, no accounting transactions have been processed/carried outside the IT system Accordingly, there are no implications on the integrity of the accounts except as stated above.
	As reported by the auditor of the Barsingsar branch of NLCIL in their audit report dated 13th May, 2025 is reproduced below:
	As per the information and explanations given to us, the branch has a system in place to process all the accounting transaction through IT system. SAP ERP has been implemented for the processes like Financial Accounting (FI), Controlling (CO), Material Management (MM), Sales and
	Distribution (SD), Production Planning (PP), Project system (PS), Plant maintenance (PM), Fund
	Management (FM) and Human Capital Management (HCM).
	Our examination of records on sample basis did not reveal any transaction not coming within the purview of various IT system as stated above.
	As reported by the auditor of the Talabira branch of NLCIL in their audit report dated 17thMay, 2025 is reproduced below:
	As per the information and explanation given to us the Branch has a system in place to process all the accounting transactions through IT system. SAP ERP has been implemented for the processes like Financial Accounting (FI), Controlling (CO), Material Management (MM), Sales and Distribution (SD), Production Planning (PP), Project systems (PS), Plant maintenance (PM),
	Fund Management (FM) and Human Capital Management (HCM). "The Branch is also using other support softwares which are integrated to SAP ERP and those transactions are also through IT systems, like NLCIL eAuctioning & Tendering System (NeAT);
	Contract Labour Management System (CLMS); myLaptop Portal; Furniture Portal; Bill Tracking System; GST Central Invoicing System, e-office for file management.
	Based on our examination of records on sample basis and other audit procedures carried out and as per the information and explanation given to us, no accounting transactions have been processed/carried outside the IT system. Accordingly, there are no implications on the integrity of the accounts.
Directions u/s 143(5) of the Companies Act, 2013	Impact on Auditors reply on action taken on the directions financial statement
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.	During the year under Audit, we have not noticed any cases of waiver/write off/restructuring of any debt/loan/interest etc. by a lender to the Company. NA
	As reported by the auditor of the Barsingsar branch of NLCIL in their audit report dated 13th May, 2025 is reproduced below:
	During the year under audit, we have not noticed any cases of waiver/write off/restructuring of any debt/loan/interest etc. by a lender to the Branch.
	As reported by the auditor of the Talabira branch of NLCIL in their audit report dated 17th May, 2025 is reproduced below:
	According to the information and explanation provided to us and so far, as it appears from our examination of the records of the Branch, there are no loans (except employees loans and advances) in the books of Branch and no such cases of waiver write-off of debts/ loans/ interest etc.
3. Whether funds (grants/subsidy etc.) received / receivable for specific schemes	During the year, the Company has received H 92.93 Crore (which includes H 46.11 received by NA Barsingsar branch detailed below) for specific schemes from Central Government or its agencies and the receipt has been properly accounted for.
from Central / State Government or its agencies were properly accounted for / utilized as per its term and conditions? List the cases of deviation.	During the year, we have noticed that the Company has received a sum of H 1.02 crore and H receivable of 10.64 crore toward reimbursement of teachers salary from Government of Tamil Nadu. The schools are run by the Company. As per the practice in various States, salaries of the school teachers are being paid by the Govt. of Tamil Nadu through its education department. Apart from Salary, all retirement benefits of these school teachers as per applicable guidelines issued by Government of Tamil Nadu are paid by Government of Tamil Nadu. The salary of the teachers is paid by Govt. of Tamilnadu through NLCIL bank account as there are no separate bank accounts operated by the schools. These regular salary payment of school teachers, in our opinion, is not considered as a grant.
	As reported by the auditor of the Barsingsar branch of NLCIL in their audit report dated 13th May, 2025 is reproduced below:
	As per the information and explanations given to us, grant/subsidy is dealt at Head Office Level.
	However, as per books of accounts of the branch, the Company has received Viability Gap Funding (VGF) of H 46.11 Crore from Ministry of New & Renewable Energy (MNRE), Govt of India for 300MW Solar Project at Barsingsar which has been properly accounted for.
	As reported by the auditor of the Talabira branch of NLCIL in their audit report dated 17th May, 2025 is reproduced below:
	According to the information and explanation provided to us and so far, as it appears from our examination of the records of the Branch, no funds are received / receivable for any specific scheme from Central /State agencies by the Branch.

For Sundaram & Srinivasan	For Chaturvedi & Co LLP
Chartered Accountants	Chartered Accountants
Firm Regn. No. 004207S	Firm Regn. No. 302137E/E300286
P Menakshi Sundaram	Amit Kumar
Partner	Partner
M No. 217914	M No. 318210
UDIN: 25217914BMKYLH6945	UDIN: 25318210BMRKGB9568
Place: Chennai
Date: 19th May, 2025