NMDC Ltd Auditors Report.

Independent Auditor

To

The Members

NMDC LIMITED

New Delhi

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of NMDC LIMITED ("the Company"), which comprise the balance sheet as at 31st March 2019, and the statement of Profit and Loss (including Other Comprehensive Income), statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information in which are included the Returns for the year ended on that date audited by the branch auditors of the Companys branches located at Bailadila Iron Ore mines, Bacheli; Bailadila Iron Ore mines, Kirandul; Donimalai project, Donimalia; NMDC Iron and Steel plant, Nagarnar; Diamond Mining unit, Panna; Sponge Iron unit, Paloncha; R&D unit, Hyderabad; Regional Office, Visakhapatnam.

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 (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, 2015, as amended, ("IndAS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2019, and the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs)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 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 there under, 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 we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Emphasis of Matter

We draw your attention without modifying our opinion in respect of:-

1. Note No. 2.12(2) of the financial statements, regarding buy back of 10,20,40,815 numbers equity shares at Rs 98/- per share during the year for an aggregate consideration of Rs 1000 crore.

2. Note No. 2.34.10 of the financial statements, regarding show cause notice having been served on Bailadila project of NMDC by District Collector (South Bastar, Dantewada) pursuant to judgment of Honorable Supreme Court of India with reference to writ petition (Civil No- 114 of 2014, dated 2nd August, 2017).

3. Note No. 2.34.9 of financial statements, regarding suspension of operations at Donimalai Iron Ore Mines owing to imposition of condition by Govt. of Karnataka asking for a premium of 80% on average sales value which is challenged before Honorable High court of Karnataka.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial

statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We along with other branch auditors have determined the matters described below as key audit matters to be communicated in our report.

Sr. No. Branch Key Audit Matter Auditors Response
1. NISP Capital Work- in- Progress:
The Capital Work In Progress (CWIP) for the financial year ended 31.03.2019 in the unit is Rs 13,292.19 crores. Since the amount involved is substantial, and these projects takes significant period of time to get ready for intended use, this is considered to be a key audit matter. We obtained a view of the management and examined the process of capitalization. We have relied on the management expertise regarding commissioning of the plant.
(Refer Note No: 2.2 of financial statements)
2. Donimalai Trade Receivable:
As at 31st March 2019, current asset in respect of trade receivable includes receivables from monitoring committee amounting to Rs 1,934.39 crores which are pending adjudication. Since it is a area of higher assessed risk of material misstatement, this is considered to be a key audit matter. We have involved our internal experts to review the nature of the amounts recoverable, the sustainability and the likelihood of recover ability upon final resolution.
(Refer Note No:2.34.8 of financial statements)
3. HO Mine Closure Obligation (MCO):
The company creates Mine closure obligation liability based on the present cost of closure of mining project of the latest mine. The rate of closure arrived at based on such cost is uniformly applied to other mines for arriving at the total MCO liability. We have involved our internal expertise to review the estimates of the rate of MCO considered by the company and whether any change was required to managements position on these matters.
The matter was considered to be a key audit matter because there is estimate involved as per managements policy.
4. HO Income tax:
The company has uncertain tax position including matters under dispute which involve significant judgment relating to the possible outcome of these disputes in estimation of the provision of income tax. In view of this, the area has been considered as a Key Audit Matter.

(Refer Note No:2.29 of financial statements)

Our audit procedures include obtaining details of completed tax assessments and outstanding demands as at the year ended March 31,2019 from management. We involve our internal experts to discuss with the management regarding estimates used to ascertain the tax provision of disputed cases.
Our internal experts also consider legal precedence and other rulings in evaluating managements position on these disputed cases.
5. HO Investment in Subsidiary, Joint Ventures and Associates :
Investment in Subsidiary, Joint Ventures and Associates are valued at cost and adjusted for impairment losses after carrying out impairment testing. Since judgment of the management is required to determine if there is any indication of possible impairment, we have considered it to be a key audit matter. Our audit procedure comprise of identification and understanding of the reasonableness of the principle assumptions used by the management to judge the need for impairment testing.
(Refer Note No:2.4.1 of 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 Financial Performance Highlights, Directors Report including Annexures to Directors Report, but does not include the standalone financial statements and our auditors report thereon.

The other information as stated above not made available to us as of the date of signing of this report is expected to be made available to us after the date of this statutory 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 when made available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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

Managements Responsibility 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, total comprehensive income, changes in equity and cash flows of the Company with the IndAS and other accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement 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 is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

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

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 Matter

We did not audit the financial statements/ information of Six branches included in the stand alone financial statements of the Company whose financial statements/financial information reflect total assets of 21,098.41 crores as at 31st March 2019 and the total revenue of 12,258.15 crores for the year ended on that date, as considered in the standalone financial statements/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.

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, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, and on the basis of such checks of books and records of the company as we consider appropriate and according to the information and explanations given to us, we give in the "Annexure-1" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. We are enclosing our report in terms of section 143(5) of the Act, on the basis of such checks of books and records of the company as we consider appropriate and according to the information and explanations given to us, in "Annexure-2" on the directions issued by the Comptroller & Auditor General of India.

3. 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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(c) The reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by 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), Statement of changes in equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us.

(e) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014.

(f) The provisions of Section 164(2) of the Act, in respect of disqualification of directors are not applicable to the company, being a Government company in terms of notification no:- G.S.R.463(E) dated 5th June 2015 issued by Ministry of Corporate Affairs, Government of India.

(g) 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 -3".

(h) With respect to the other matters to be included in the auditors report in accordance with the requirements of Section 197(16) of the Act, as amended:

We are informed that the provisions of section 197 read with Schedule V of the Act, relating to managerial remuneration are not applicable to the company, being a Government Company, in terms of Ministry of Corporate Affairs notification no- G.S.R.(E) 5th June 2015.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 2.31 to the financial statements; [or the Company does not have any pending litigations which would impact its financial position 10]

ii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

As per our attached report of even date.
For Tej Raj & Pal, (CA Dinakar Mohanty)
Chartered Accountants, Partner
FRN: 304124E Membership No. 059390
Place: New Delhi
Date: 28-05-2019

"ANNEXURE -1" TO THE INDEPENDENT AUDITORS REPORT

Referred to in paragraph 1 under the heading Report on Other Legal & Regulatory Requirement of our report of even date to the Financial Statements of the Company for the year ended March 31,2019:

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company is in the process of carrying out physical verification of fixed assets, a regular programme of physical verification of its fixed assets by which all the fixed assets are physically verified by the management over a period of three years. In our opinion the periodicity of the physical verification is reasonable having regard to the size of the company and the nature of fixed assets. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies have been noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the company, as to whether the title deeds of immovable properties are held in the name of the company, our observations are listed below:

Sl. no. Description of Assets Area in acres Value (in ) as on 31.03.2019 Issues*(if any)
R & D
01 Stamp duty of Land 2.98 8,42,208 No documents regarding stamp duty were made available for verification therefore, we are unable to comment.
BACHELI
LAND LEASE HOLD (GENERAL)
01 Land Magazine Building and Service Centre.

Location Hilltop

755.27 Nil The unit holds possession Letter Dated 24.01.1977 M.P. Govt. gazette Notification dated 07.06.1977.
02 Land acquisition for screening plant 470 Nil No documents were made available for verification therefore we are unable to comment.
03 Land acquisition for intake arrangement

Location - Bacheli

28.13 Nil Original Sale deed is available for Private land of 14.13 acres (5.718 Hec.). Mutation of Land in favour of NMDC is under process with tahsildar, Bacheli. However, paper for 14acres Govt. land not available.
04 Mining Lease of DEP. - 05 1334.463 53,99,96,215 The unit holds Possession Letter issued by Mining Officer District South Bastar, Dantewada.
05 Mining Lease of DEP. - 10 764.379 29,89,00,815 The unit holds Possession Letter issued by Mining Officer District South Bastar, Dantewada.
06 Mining Lease of DEP. - 10(FO) 352.858 13,91,64,937 The unit holds Possession Letter issued by Mining Officer District South Bastar, Dantewada.
07 Mining Lease of DEP. - 11A 764.379 38,45,514 The unit holds Possession Letter issued by Mining Officer District South Bastar, Dantewada.
08 Land for Sankininalla W/supply scheme for 10 & 11 a proj. 2 Hectares 1,03,528 No documents were made available for verification; therefore we are unable to comment.
09 Land for Sankininalla W/supply scheme for 10 & 11 a proj. 3 Hectares Nil No documents were made available for verification; therefore we are unable to comment.
10 Land acquired for Central workshop

Location : Bacheli

23.39 62,594 The unit holds Possession Letter of lease deed dated 19.07.1991 from Tahsildar bastar M.P.
11 Land Lease hold of Dep No 10 for measuring of iron ore 308.13

(Hecters)

1 No documents were made available for verification, therefore we are unable to comment.
12 Land lease hold of pocket No. 1,2, and 3 near Bhansi 189.956

(Hecters)

1 No documents were made available for verification; therefore we are unable to comment.
13. Lease Hold land of Bacheli Float 99.956

(hecters)

1 No documents were made available for verification; therefore we are unable to comment.
LAND FREEHOLD (GENERAL)
1. Land for Bhansi Camp Location : Bacheli Under

reconciliation

7,840 Khasra documents for holding available
2. Land acquired for Const. of intake water supply to screening plant.

Location : Bacheli

14 18,987 No documents were made available for verification; therefore we are unable to comment.
3. Value of private land from Adivasi for pipeline from Nerli Dam to Screening plant. Location - Bacheli 1.54 7,375 No documents were made available for verification; therefore we are unable to comment.
4. Value of private land for Oxidation pond. Location :Bacheli. 17.77 13,294. Sale deed for the land 17.77 acres(i.e. 7.191 Hect) available; mutation is under process with Tehsildar.
5. 4 acres land for railway siding at Bacheli Location : Bacheli 4 5,502 Original sale deed is available, mutation application for land is under process with tehsildar.
6. Land acquired from adivasi for tailing dam near parapur. 81.35 2,11,395 Attested copy of sale deed obtained from registrar, dantewada is avaialable; mutation application is under process with tehsildar.
7. Acquisition of land for Tailing Dam and diff of amount paid vide JV No/12461/88 Under

Reconciliation

30,635 No documents were made available for verification; therefore we are unable to comment.
8. Forest Land for Uniflowly, dispatch system 4-94 12,40,000 Ministry of environment and forest(MOEF) issued Letter No. 8B/007/2002/FCW/1313 dated 07.06.2002 is available.

 

Sl. no. Description of Assets Area in acres Value (in ) as on 31.03.2019 Issues*(if any)
BUILDINGS (GENERAL) Gross Block - 38,87,34,256 Net Block - 33,61,16,142 No documents were made available for verification; therefore we are unable to comment.
i. Land for Bhansi Base Camp Location : Bacheli 30 Nil The unit holds possession letter dated 03.06.1996 M.P. Govt. Gazette Notification dated 03.06.1996.
2. Land for Bacheli Town - ship (lease paids to DFO and cost of stamp for regn.) 200 Nil The unit holds possession letter dated 20.06.1976 M.P. Govt. Gazette Notification dated 09.02.1976.
3. Land for Bailadila Estate at Jagdalpur

Loaction : Jagdalpur

10 Nil No documents were made available for verification; therefore we are unable to comment.
4. Land for Operation Township at Hill Top Location : Hilltop 307.06 Nil Copy of Gazette Notification issued by M.P. Govt. dated 07.06.1977 denotifying the area is available.
Building (Social Amenities) Gross Block - 93,55,51,377 Net Block - 87,85,60,029 No documents were made available for verification; therefore we are unable to comment.
PANNA Description of Assets Area in acres Value (in ) as on 31.03.2019 Issues*(if any)
FREEHOLD LANDS (GENERAL/ SOCIAL)
1. Land 2,68,392 Measurement details were not made available.
2. Land at Panna Plot No - 1236/3 2.063 5,176 No documents were made available for verification; therefore we are unable to comment.
3. Land at Panna Plot No - 76/2 1.821 3,304 No documents were made available for verification; therefore we are unable to comment.
4. Land at Panna Plot No - 1237/2 2.063 7,370 No documents were made available for verification; therefore we are unable to comment.
5. Land at Panna Plot No - 1236/2 15.873 30,085 No documents were made available for verification; therefore we are unable to comment.
6. Land lease hold Dep No-14 317.19

(Hecter)

Nil The company hold possession letter issued by the Chief Secretary , Mining Resource, Dept., M.P.
KIRANDUL Description of Assets Area in acres Value (in ) as on 31.03.2019 Issues*(if any)
1. Land Leasehold Dep-11C Mines and Fine Ore Dump 122.619

Hectares

21,84,430.00 No documents were made available for our verification there for we are unable to comment.
2. Cap of 11B Expenditure Dep- 11B Mines 1,19,13,706.00 No documents were made available for our verification there for we are unable to comment.
3. Mining Lease of Dep-14 17.81

Hectares

57,31,352.00 No documents were made available for our verification there for we are unable to comment.
Land Leasehold (Social Amenities)
1. Land Leasehold (for Town ship) Type ii Qtr. In Kirandul 20.81

Hectares

0.00 No documents were made available for our verification there for we are unable to comment.
Land Freehold (General)
1. Land-Area in Bacheli Pargana 1.00 Acres 338.00 No documents were made available for our verification there for we are unable to comment.
2. Land-Area in Bacheli Pargana (Kameli Kala) 2.10 Acres 557.00 No documents were made available for our verification there for we are unable to comment.
3. Land-Area in Bacheli Pargana (Poro Kameli) 3.27 Acres 1,341.00 No documents were made available for our verification there for we are unable to comment.
4. Land-Area in Bacheli Pargana 2.58 Acres 958.00 No documents were made available for our verification there for we are unable to comment.
5. Land-Area in Bacheli Pargana 0.09 Acres 31.00 No documents were made available for our verification there for we are unable to comment.
6. Land-Area in Bacheli Pargana 0.08 Acre 212.00 No documents were made available for our verification there for we are unable to comment.
7. Land-Area in Bacheli Pargana 0.22 Acre 58.00 No documents were made available for our verification there for we are unable to comment.
8. Land-Area in Bacheli Pargana 5.44 Acres 2,216.00 No documents were made available for our verification there for we are unable to comment.
9. Land-Area in Kirandul Pargana 0.93 Acre 514.00 No documents were made available for our verification there for we are unable to comment.
10. Land-Area in Kirandul Pargana 11.50 Acres 8,525.00 No documents were made available for our verification there for we are unable to comment.
11. Land-Area in Kirandul Pargana 2.20 Acres 1,866.00 No documents were made available for our verification there for we are unable to comment.
12. Land-Area in Kirandul Pargana 4.59 Acres 3,090.00 No documents were made available for our verification there for we are unable to comment.
13. Land Area in Bada bacheli 1.46 Acres 384.00 No documents were made available for our verification there for we are unable to comment.
14. Land Area in Bada bacheli Pargana 1.35 Acres 355.00 No documents were made available for our verification there for we are unable to comment.
15. Land Area in Bada bacheli Pargana 0.32 Acres 158.00 No documents were made available for our verification there for we are unable to comment.
16. Land Area in Bada bacheli Pargana 0.70 Acres 433.00 No documents were made available for our verification there for we are unable to comment.
17. Land Area in Bada bacheli Pargana 1.40 Acres 663.00 No documents were made available for our verification there for we are unable to comment.
18. Land Area in Bada bacheli Pargana 1.81 Acres 477.00 No documents were made available for our verification there for we are unable to comment.
19. Land Area in Bada bacheli Pargana 1.07 Acres 382.00 No documents were made available for our verification there for we are unable to comment.
20. Land Area in Bada bacheli Pargana 4.27 Acres 1,140.00 No documents were made available for our verification there for we are unable to comment.
21. Land Area in Padapur Pargana 1.00 Acre 263.00 No documents were made available for our verification there for we are unable to comment.
22. Land Area in Padapur Pargana 1.00 Acre 1,580.00 No documents were made available for our verification there for we are unable to comment.
23. Land Area in Padapur Pargana 1.06 Acres 279.00 No documents were made available for our verification there for we are unable to comment.
24. Land Area in Padapur Pargana 1.22 Acres 321.00 No documents were made available for our verification there for we are unable to comment.
25. Land Area in kodenar Pargana 3.48 Acres 916.00 No documents were made available for our verification there for we are unable to comment.
26. Land Area in Jagdalpur 5.823 Hectares 1,05,778.00 No documents were made available for our verification there for we are unable to comment.
27. Land for Accumulation of Slimes 39.58 Acres 7,09,502.00 No documents were made available for our verification there for we are unable to comment.
28. Land at Madadi VIL 15.79 Acres 4,46,722.00 No documents were made available for our verification there for we are unable to comment.
29 Land Freehold in Kirandul pargana 47.18 Acres 22,569.00 No documents were made available for our verification there for we are unable to comment.
30 Land Freehold (Construction of 100 Permanent Type-C Qtrs) 75.90 Acres 46,200.00 No documents were made available for our verification there for we are unable to comment.
31 Land Freehold for Construction of K.V. School Near Praleosh Vidyalaya 21.62 Acres 22,39,610.00 No documents were made available for our verification there for we are unable to comment.
32 BUILDINGS (Social Amenities) Net Block- 69,06,41,990.00 Documents for construction have been verified. However, these buildings have been over the above Land for which no title deeds have been made available for verification.
KIRANDUL
33. Land lease hold Dep-14 Mines 322.368

(Hecters)

41,31,186 The company hold possession letter issued by the joint secretary, Mining Resources Department, Raipur.
34. Land lease Hold Dep-14 non Mining 506.742

(Hecters)

66,49,904 The company hold possession letter issued by the joint secretary, Mining Resources Department, Raipur.
35. Land Lease Hold Dep No. 11 317.79

(hecters)

1 The company hold possession letter issued by the chief secretary, Mining Resources Department, Raipur.
NAGARNAR IRON AND STEEL PLANT
1. Land at villages Nagarnar, Kasturi, Amaguda & Maganpur 288.79

(Hecters)

7,27,58,374 Free hold land for which the company hold possession letter issued by (Kabja Praman Patra) the Tehsildar, Jagdalpur
2. Land at villages Bhamani 1.82

(Hecters)

1,36,380 Free hold land for which the company hold possession letter issued by (Kabja Praman Patra) the Tehsildar, Jagdalpur
3. Land at villages Nagarnar, Bijaput, Upanpal, Kasturi, amaguda, Madpal, Chokawada & Maganpur 318.74

(Hecters)

88,08,16,636 Free hold land for which the company hold possession letter issued by (Kabja Praman Patra) the Tehsildar, Jagdalpur
4. Land at villages Chokawada 7.2

(Hecters)

26,31,600 Free hold land for which the company hold possession letter issued by (Kabja Praman Patra) the Tehsildar, Jagdalpur
5. Land at villages Nagarnar 155.55

(Hecters)

Not finalized Free hold land for which the company hold possession letter issued by (Kabja PramanPatra) the Tehsildar, Jagdalpur
6. Land at villages Dhanpunji 20.28 Acres 3,10,20,964 Free hold land for which the company hold possession letter issued by (Kabja Praman Patra) the Tehsildar, Jagdalpur
INDUSTRIAL LAND AND OTHERS
1. Land at Jhanj Raipur 1.82

(Hecters)

60,82,2220 The company holds possession letter issued by the New Raipur Development Authority
2. Industrial Free Hold Land 11.35 Acres 139.21 crores Having provisional allotment letters of 13.43 acres but measuring 11.35 acres
3. Industrial free hold Land purchased from M/s Allwyn Watches Ltd. 24.23 Acres 5.88 crores Purchased land of 26.39 acres but measuring 24.23 acres
4. Industrial Free Hold land acquired from Chattisgarh Housing board 1.43 Acres 0.83 crores Acquired land of 1.32 acres measuring 1.43 acres
5. Building ( General Leasehold) Net Block 21,28,51,322 Building constructed on mines lease area.

2. (a) The management has conducted the physical verification of inventory at reasonable intervals.

(b) The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.

3. 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 loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly the provisions of clause (3) (iii) (a) to (c) of the order are not applicable to the company and hence not commented upon.

4. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security.

5. The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

6. The Central Government has prescribed the maintenance of cost records under Section 148(1) of the Act. Company is generally maintaining proper cost records as specified by the Central Government under sub-Section (1) of Section 148 of the Companies Act, 2013.

7. According to information and explanations given to us, in respect of statutory dues :

(a) The company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income - Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of including Provident Fund, Employees State Insurance, Income - Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues were in arrears as at March 31,2019 for a period of more than six months from the date on when they become payable.

(c) According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute, except the followings:

UNIT NAME OF STATUE NATURE OF DUES

PERIOD

FORUM WHERE DISPUTE IS PENDING Rs in Crores
KIRANDUL Nagarpalika, Kirandul Export Tax

1995 - 96

Honble High Court of 11.26

1996 - 97

Chhattisgarh

2008 - 09 To 2018 - 19

MP Commercial Tax Commercial Tax

2002-03

Dy. Commissioner of 1.60
Act, 1994

2005-06

Commercial Tax (Appeal)

2008-09

DGGI, Raipur Zonal Unit Service Tax

2017-18

It commission Raipur Commissionerate 0.65
Commissioner of GST and Central Excise (Audit) GST

2017-18

Director(c) GST and Central Excise (Audit) 0.11
DFO, Dantewada and state of Chhattisgarh Forest Permit Fee

14.06.2002 to 31.10.2012

Bilaspur bench of Hoble High Court, Chhattisgarh 63.29
Nagarpalika, Kirandul Conservancy Tax

1997-98 to 2005-06

High Court, Chhattisgarh 0.79

2014-15 to 2017-18

Nagarpalika, Kirandul Property Tax

2013-14 to 2016-17

High Court, Chhattisgarh 74.40
The Appellate Tribunal Service Tax

July 2012- June 2014

Service Tax Appellete Tribunal 16.12
High Court Service Tax on Royalty

2017-18

High Court, Bilaspur 80.23
DONIMALAI Karnataka Sales Tax Act 1957 Tax on ERP Licenses

1990-91, 199192

Dy. Commissioner of Commercial Tax, Bellary 0.51
Karnataka Forest Act 1963 Forest Development Tax

2008-09 to 2010-11

Honble Supreme Court of India 243.69
Central Excise, Customs and Service tax Service Tax on services provided to CISF

2012-13 to 2015-16

Commissioner of Central Excise (Appeals) 0.23
Central Excise, Customs and Service tax Service Tax on LD and penalty recovered from contractors 2013-14 to 2015-16 Commissioner of Central Excise (Appeals) 0.27
Central Excise, Customs and Service tax Objection to Trans - 1 Credit in respect of Service Tax credit taken in July 2017 GST 2017 - 18 Central Tax (CGST) Hosapete 0.49
Central Excise, Customs and Service tax Service Tax on Royalty 01.04.2016 to 30.06.2017 Commissioner of Central Excise (Appeals) Belagavi 97.00
PANNA Service tax on Royalty Service Tax 2016-17, 201718 (Q1) High Court, Jabalpur 0.85
Commercial Tax Sales & Entry Tax 2013-14 DCIT, Sagar 0.23
Commercial Tax Sales & Entry Tax 2016-17 DCIT, Sagar 0.04
BACHELI The Finance Act, 1994 Service Tax July 2012 to June 2014 The Appellate Tribunal 59.38
The Finance Act, 1994 Service Tax April 2016 to March 2019 The Appellate Tribunal 102.38
VIZAG The Finance Act, 1994 Service Tax 2007-08 TO 2011-12 Service Tax - Vizag Sales Tax - Hyderabad 2.74
NISP Central Excise Act. GST Refund F.Y. 2018-19 Commissioner Appeals U/S 35 of the Central Excise Act 3.40
Head Office Income Tax Act, 1961 Income Tax FY 2015-16 CIT(A) 70.54
2010-11, 2005- 06, 1990-00 & 2001-02 2006- 07 to 2009-10, 201112 to 2013-14 High Court 1604.71
2014-15 ITAT, Hyderabad 98.58
The Finance Act, 1994 Service Tax 01.10.2013 to 30.09.2014 &01.10.2007 to 31.10.2012 CESTAT 28.28
01.07.2012 to 31.03.2015 COM.(A), Mysore 0.17
TOTAL 2561.94

8. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans and borrowings to any financial institutions, banks, government or dues to debenture holders.

9. The Company has not raised money by way of initial public offer or further public offer(including debt instrument) or term loans and hence reporting under clause 3 (ix) of the Order is not applicable to the Company.

10. To the best of our knowledge and according to the information and explanations given to us, no fraud by the company or no material fraud on the company by its officers or employees has been noticed or reported during the year.

11. In our opinion and according to the information and explanations given to us, the company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Act.

12. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the order is not applicable to the company.

13. In our opinion and according to the information and explanations given to us, the company is in compliance with section 177 and 188 of the Companies Act,2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

14. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures and hence reporting under clause 3 (xiv) of the order is not applicable to the company.

15. In our opinion and according to the information and explanations given to us, during the year the company has not entered into any non cash transactions with its Directors or persons connected to its Directors and hence provisions of section 192 of the Companies Act,2013 are not applicable to the company.

16. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act,1934.

As per our attached report of even date. For Tej Raj &Pal
Chartered Accountants
(FRN. 304124E)
( CA. Dinakar Mohanty)
New Delhi Partner
28th May, 2019 Membership No-059390

"ANNEXURE-2" TO THE AUDITORS REPORT

Report on the Direction of the Comptroller and Auditor General of India required under sub section 5 of section 143 of the Companies Act, 2013 ("the Act")

Sl. No. Directions Reply
1. Whether the company has system in place to process all the accounting transaction 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 a ERP system (Oracle) to process all the accounting transactions through IT system. However, for preparation of financial statements some manual interventions are carried out.
2. Whether there is any restricting of an existing loans 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, financial impact may be stated. Not Applicable
3. Whether funds received/ receivable for specific schemes from central / state agencies were properly accounted for/ utilised as per its terms and conditions? List the cases of deviations. Not Applicable

 

For Tej Raj &Pal
Chartered Accountants
(FRN. 304124E)
( CA. Dinakar Mohanty)
New Delhi Partner
28th May, 2019 Membership No-059390