rashtriya chemicals & fertilizers ltd share price Auditors report


TO THE MEMBERS OF RASHTRIYA CHEMICALS AND FERTILIZERS LIMITED

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying Standalone Ind AS Financial Statements of RASHTRIYA CHEMICALS AND FERTILIZERS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2023, the Statement of

Profitand Loss (including Other Comprehensive Income),

Statement of Changes in Equity and Statement of Cash Flows for the year ended March 31, 2023 and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Ind AS Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023 and its profit and 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 Ind AS Financial Statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Ind AS Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the Standalone Ind AS Financial Statements under the provisions of the

Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS Financial Statements.

Emphasis of Matter

We draw attention to the following matters: a) Note No. 48 – Property, Plant and Equipment: Title deeds of Immovable properties:

In respect of immovable properties other than land, i.e. building and other structures situated at its Trombay and Thal units, the Company has self-constructed properties on the land owned by the Company as evidenced by property cards/title deeds of land.

The Company has contested that major portion of the immovable assets became vested with the Company as a result of Government of India reorganizing certain fertilizers companies in the past. Based on the legal opinion obtained, the company is of the view that it has clear title to the same and also initiated the process of obtaining evidence of title towards self-constructed properties.

Apart from such properties, immovable properties, including land for which title deeds are not in the name of the Company is mentioned in the standalone Ind AS financial statements. b) Note No. 50 – Gas pooling applicable to Fertilizer (Urea) sector:

During the year 2022-23, the Company has recognized a receivable of 79.84 crores recoverable from

Department of Fertilizers on account of pooled price differential for the Year 2021-22 and for the period

December 2022 to February 2023 raised by GAIL India Limited on account of substitution of EPMC and Spot gas used for Urea operations with cheaper market priced gas. c) Note No. 67 – Exceptional Item:

Pursuant to the Ministry of Petroleum & Natural Gas

(MoPNG) order No. L-13013/3/2012-GP-I, dated: 16th December 2015, GAIL had sought a differential levy on usage of gas for non-fertilizer/non-Urea operations, amounting to 1457.92 crores for the period commencing from 1st July 2006 till 30th June, 2019 by initiating arbitration proceedings before Administrative Mechanism for Resolution of CPSEs Disputes (AMRCD).

The Liability pertaining to period 1st July 2006 till

31st March 2016 was settled and excess provision of

147.00 crores were reported as an exceptional item in Year 2021-22. During the current year 2022-23, the liability from Financial Year 2016-17 onwards is crystalized and 30.15 crores excess provision is not considered necessary has been derecognized and reported as an exceptional item.

Our opinion 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 Ind AS financial statements of the current period.

These matters were addressed in the context of our audit of the Standalone Ind AS Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matters identified in our audit

1. Revenue Recognition and measurement in respect of subsidy income.

2. Estimation of Provision & Contingent Liabilities.

3. Information Technology General Control.

Key Audit matter

Response to Key Audit Matter

1. Revenue recognition and measurement in respect to subsidy income.

Our Procedure included:
Accounting policies and principles:

Recognition of subsidy is generally made on the basis of in principle recognition/approval /settlement of claims from Government of India/Fertilizer Industry

We have reviewed the Companys accounting policies for Subsidy on Urea as mentioned under "Note A. Statement of of the standalone Ind AS financial statements and the same is compared with the applicable Ind AS.

Accounting policies III) D) Revenue Recognition" Significant Co-ordination Committee while finalizing the standalone Ind AS financial statements.

During the year, Subsidy adjusted on account of the escalations/de-escalations basis for the year amounts to 114.53 Crore refundable to FICC/DOF (PY 1588.30 Crore receivable).

Tests of controls:

We have evaluated the design, implementation and operating effectiveness of key controls over recognition of subsidy income.

Such adjustments have been done for escalations/de- escalations in the cost of inputs and other costs, as estimatedbythemanagementbasedontheprescribed norms in line with known policy parameters. MRP of Urea being fixed by Government of India, the Company is entitled for subsidy wherein certain inputs costs are a pass through and compensation for production beyond a level of production known as

Tests of details:
We have verified the supporting documentation for determining that the subsidy was recognized in the correct accounting period and as per notified

In absence of notified rates, we have verified estimated rates based on information available with the Company for such costs which are a pass through.

Reassessed capacity is restricted to lower of Import Parity Price (IPP) of Urea plus other incidental charges which the government incurs on imported of the Urea, or same is based its like IPP of Urea etc. The verification own concession price, as determined under extant policies for Urea. Further subsidy income is net of adjustments of recoveries towards sale/transfer for surplus ammonia or non-conversion of entire ammonia into Urea.

In case estimation of income is based on other parameters on available information in public domain.

Testing reasonability of assumptions based on past trends, consistency in application and changes in the same owing to change in Government policies. Performing substantive analytical procedures: -

Since there is a time lag between actual expenditure incurred and notification of concession rates for the in year, Management exercises significant arriving at the income entitlement on account of same for the year.

Ascertainment and analysis of variations with respect of amounts estimated and actually entitled upon notification with respect to previous years.

We also assessed as to whether the disclosures in respect of revenue were adequate.

Therefore, there is a risk of revenue being misstated on account of errors in estimation of concession/IPP rates yet to be notified, due to absence of notification available and change in methodology/ calculation, if any for arriving at price concession.

 

Key Audit matter

Response to Key Audit Matter

2. Estimation of Provision & Contingent Liabilities

Internal enquiry:

In the recognition and measurement of provisions, there is uncertainty about the timing or amount of the future expenditure required to settle the liability.

We enquired of the senior management and inspected the minutes of the board and various committees of the board where relevant, for claims arising and challenged whether provisions are required.

In respect of contingent liabilities, there are estimates and assumptions made to determine the amount to be disclosed. claims, we checked the amount of In respect of significant

Tests of details: claim, nature of issues involved, management submissions and corroborated the same with external evidence, where available.

As at the year ended 31 March 2023, the amounts involved are significant. There is a high degree of judgement required for the recognition and measurement of provisions and disclosure of contingent liabilities.

Enquiry and confirmation of lawyers:

In respect of matters which are under dispute, we have

assessed opinion of the Companys in-house Legal

Department / external lawyers wherever necessary.

There is a risk of material misstatement that the estimates are incorrect and that the provisions or contingent liabilities are materially misstated.

 

3. Information Technology Controls

We focused our audit on those IT systems and controls process.

to the Companys financial reporting that are significant financial A significant reporting process is heavily reliant on IT systems with automated processes and controls over the capture, storage and extraction of information. A fundamental component of these processes and controls is ensuring appropriate user access and change management protocols exist and being adhered to. These protocols are important because they ensure that access and changes to IT systems and related data are made and authorised in an appropriate manner. As our audit sought to place a high level of reliance on IT systems and application controls related to financial reporting, high proportion of the overall audit effort was in Information Technology (IT) Systems and Controls. We focused our audit on those IT systems Companys and controls that are significant financial reporting process.

We assessed the design and tested the operating effectiveness of the Companys IT controls including those over user access and change management as well as data reliability.

In a limited number of cases, we adjusted our planned audit approach as follows:

- We extended our testing to identify whether there had been unauthorized or inappropriate access or changes made to critical IT systems and related data;

- Where automated procedures were supported by systems with identified deficiencies, we extended our procedures to identify and test alternative controls; and

- Where required, we performed a greater level of testing to validate the integrity and reliability of associated data and reporting.

Further, We have relied on provisional observations of independent consultants past reports and the Companys replies to the observations raised by the consultants.

Other Information

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report but does not include the standalone Ind AS financial statements and our auditors report thereon. The Companys Annual report is expected to be made available to us after the date of this auditors report.

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

In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and in doing so, consider whether the other information is materially inconsistent with the standalone

Ind AS financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated. When we read the Companys annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Management and Board of Directors Responsibilities for the Standalone Ind AS Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act,

2013 ("the Act") with respect to the preparation of these Standalone Ind AS Financial Statements that give a true and fair view of the financial position, the financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Ind AS Financial Statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going doubt on the Companysconcern 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 Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS Financial Statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Ind AS Financial Statements.

We

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

Obtain an understanding of internal 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 with reference to the standalone Ind AS financial statements in place and the operating effectiveness of such controls.

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

Conclude on the appropriateness of managements use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that ability may cast significant to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Ind AS Financial Statements or if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

Materiality is the magnitude of misstatements in the Standalone Ind AS Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone Ind considerAS financial statements may be influenced.

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 Ind AS financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant identify any significant 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 Ind AS Financial

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

Report on Other Legal and Regulatory Requirements

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

2. As required by Section 143 (5) of the Act, we give in

"Annexure B" the directions and sub-directions issued by the Comptroller and Auditors General of India (CAG), the action taken thereon and its impact on the accounts and the standalone Ind ASfinancialstatements of the

Company.

3. Non - Compliance of the SEBI Listing Obligation and Disclosure Requirements (LODR) Regulations, 2015 - as per Regulation 17(1)(b), the Chairman being an Executive Director, at least half of the Board of Directors should be comprised of Independent Directors including one Women Independent Director. Currently, the Company does not have required number of Independent Directors on its board. (Refer Note 44.1.3 to the standalone Ind AS Financial Statements)

4. (A) As required by section 143(3) of the Act, we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. c) The Standalone Balance sheet, the

Standalone Statement of Profit and Loss (including Other Comprehensive Income),

Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flow dealt with by this report are in agreement with the relevant books of account. d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act. e) The Company being a government company, the provision of section 164(2) is not applicable in accordance with the Notification No. GSR 463 (E) dated June 5, 2015 issued by

Ministry of Corporate Affairs. Accordingly, no reporting regarding Clause 3(g) of section 143 is required. f) With respect to the adequacy of the internal controls withfinancial reference to the standalone Ind AS financial statements of the

Company and the operating effectiveness of such controls, refer to our separate report in

"Annexure C".

(B) 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 Ind AS Financial Statements

Refer Note 44 to the Standalone Ind AS financial statements; ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; iii. There is 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 have been advanced or loaned or invested (either from borrowed funds or share premium or any kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the

Intermediary shall:

directly or indirectly lend or invest in other persons or entities identifiedin any manner whatsoever ("Ultimate

Beneficiaries") by or on behalf of the

Company or

provide any guarantee, security or the like to or on behalf of the

Ultimate Beneficiaries. b) The management has represented, that, to the best of its knowledge and belief, no fundshavebeenreceivedbytheCompany from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall: directly or indirectly, lend or invest in other persons or entities identifiedin any manner whatsoever ("Ultimate

Beneficiaries") by or on behalf of the

Funding Party or

provide any guarantee, security or the like from or on behalf of the

Ultimate Beneficiaries; and c) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under clause (iv) (a) and (iv) (b) contain any material misstatement. v. The dividend declared or paid during the year by the Company is in compliance with section 123 of the Act.

(C) With respect to the other matters to be included in the Auditors Report as per section 197 (16) of the

Act:

In accordance with requirements of section 197

(16) of the act as amended: As per notification number G.S.R. 463 (E) dated June 5, 2015 issued by Ministry of Corporate Affairs, Section 197 of the Act as regards the managerial remuneration is not applicable to the Company, since it is a Government Company.

(D) Proviso to Rule 3(1) of the Companies (Accounts)

Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of

Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,

2023.

For M M Nissim & Co LLP

For Gokhale & Sathe
Chartered Accountants Chartered Accountants
Firm Regn. No.107122W/W100672 Firm Regn. No. 103264W

N. Kashinath

Atul Kale
Partner Partner
Membership No. 036490 Membership No. 109947
UDIN: 23036490BGXRYV2718 UDIN: 23109947BGVVQE8885
Place: Mumbai
Dated: May 30, 2023

Annexure "A" to the Independent Auditors Report

(Referred to in Para 1 ‘Report on Other Legal & Regulatory Requirements in our Independent Auditors Report to the members of the Company on the Standalone Ind AS Financial Statements for the year ended March 31, 2023.)

Statement on Matters specified in paragraphs 3 & 4 of the Companies (Auditors Report) Order,

2020:

(i) (a) A. The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment with original cost and depreciation written off in respect of identifiable units of assets and where such information for identifiable units of assets is not available, the records show the cost and depreciation written off in respect thereof as a group or class. The items of assets in respect of which quantitative details are not linked with the cost or book value are of small value acquired prior to April 1978 and are fully depreciated particularly in respect of movable items acquired from Fertilizers

Corporation of India Limited.

B. The Company has maintained proper records showing full particulars of Intangible assets.

(b) The Companyhas verificationof its Property, Plant and Equipment by regularprogramforphysical which its Property,PlantandEquipmentareverifiedin a phased manner by the management and the Companys internal auditors.Inouropinion,thisperiodicityofphysicalverificationis reasonable having regard to the size of the Company and the nature of its Property, Plant and Equipment. No material discrepancies were noticed on such verification.

(c) Based on our examination of the registered sale deed / transfer deed / conveyance deed / property tax paid documents (which evidences title) provided to us and with reference to Note 48 to the standalone Ind

AS Financial Statements, we report that, the title in respect of self – constructed buildings and title deeds of all other immovable properties, (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the standalone Ind

AS financial statements included in property, plant and equipment are held in the name of the Company as at the balance sheet date, except:-

Total No. of Cases

Type of assets Gross Block as at March 31, 2023 ( Crore) Held in Name of Whether promoter, director or their relative or employee Period held

Remarks

1 2

Free Hold Land Thal (1,824,903 Sq. Mtr. of land) 1.60 Government of India (incl. Central Railways) and private land owners NO 44 Years

The Company is in the process of obtaining transfer of the title deeds.

2 1

Free Hold Land -Trombay (375,826 Sq. Mtr. of land) 0.24 The Fertilizer Corporation of India NO 44 Years

The Company is in the process of obtaining transfer of the title deeds.

3 1

Building – Thal Kihim Township 3.09 Not applicable NO 38 Years

The Company is in the process of obtaining evidence of title / permissions / approvals.

(d) The Company has not revalued any of its property, Plant and Equipment (including of right- of-use assets) or intangible assets or both during the year. (e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, no proceedings have been initiated during the year or are pending against the Company as at 31st March 2023 for holding any benami property under the Benami Transaction (Prohibition) Act, 1988, as amended and rules made thereunder.

(ii) (a) The physical verification of inventory (excluding stocks outside the factory premises) has been conducted at reasonable intervals by the Management with the help of independent outside agency (Internal auditors and technical consultants) during the year and, in our opinion, the coverage and procedures of such verification by Management is appropriate.

In respect of inventory lying outside the factory premises are taken as per warehousing certificates for material stored in godowns and third-party confirmations where material is lying with third party (job-worker, agents etc.) respectively. In respect of inventories of stores and spares, the with management conducts physical verification help of an independent outside agency in a phased of all program so as to complete the verification items over a period.

The discrepancies noticed on physical verification of inventory as compared to book records were not 10% or more in aggregate for each class of inventory.

(b) The Company has been sanctioned working capital limits in excess of 5 crores, in aggregate, at any point of time during the year, from banks on the basis of security of current assets. In our opinion and according to the information and explanations given to us, the quarterly returns (FFR -I and

QRR-I) and other stipulated financial information filed by the Company with such banks are in agreement with the unaudited books of account of the Company for the first three quarters and with the audited books of account in respect of fourth quarter ending 31st March 2023 and there are no material discrepancies.

(iii) The Company has investments in companies and

Joint Venture entities. The Company has not provided any guarantee or security, and granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties during the year. However the

Company has given a financial guarantee in prior year.

(a) The Company has not provided any loans or advances in the nature of loans or stood guarantee or provided security to any other entity during the year and hence reporting under clauses (iii)(a), (c), (d), (e) and (f) of the order are not applicable. (b) In our opinion, the investments in companies/joint venture entities, financial guarantee given to FACT-RCF Building Products Limited, and loans given to FACT Limited (a joint venture partner) in prior years are, prima facie, not prejudicial to the Companys interest.

(iv) In our opinion, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it, as applicable.

(v) The Company has not accepted any deposits or amounts which are deemed to be deposits within the meaning of Sections 73 to 76 of the Act and the Rules framed there under to the extent notified.

(vi) We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148 (1) of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(vii) (a) The Company is regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales Tax, Service Tax, Duty of Customs Duty, Duty of

Excise, Value Added Tax, Goods and Service Tax,

Cess and any other material statutory dues with the appropriate authorities. There are no arrears of outstanding statutory dues in respect of above as on the last day of the financial year for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us and the records examined by us, there are no material dues of Income tax, Sales tax, Service tax, Duty of customs, Duty of excise, Value added tax outstanding on account of any dispute, except for the following:

. Name of the Statute

Nature of dues Amount ( in Crore) Period to which the amount relates Forum where dispute is pending

Customs Act, 1962 1

Demand of Differential Customs Duty on import of 80.77 FY 2009-10 Assistant Commissioner of Customs, Dharamtar,
Urea, MOP & DAP (Marketing) Alibaug

 

Name of the Statute

Nature of dues Amount ( in Crore) Period to which the amount relates Forum where dispute is pending

Customs Act, 2 1962

Demand of Differential customs duty on import of Potash (Marketing) 0.16 FY 2012-13 Commissioner of Customs, Mangalore

Income Tax 3 Act, 1961

Disallowance of additional depreciation claimed 0.97 AY 2013-14 Commissioner of Income Tax (Appeals)

Income Tax 4 Act, 1961

Demand of Tax for Short Deduction / non deduction of TDS 1.12 AY 2008-09 to AY 2020-21 Commissioner of Income Tax (Appeals)

Income Tax 5 Act, 1961

Disallowance of additional depreciation claimed 9.04 AY 2017-18 Commissioner of Income Tax (Appeals)

Income Tax 6 Act, 1961

Disallowances of P.F, sale of scrap & other disallowances 0.19 AY 2020-21 Commissioner of Income Tax (Appeals)

Income Tax 7 Act, 1961

Rectification Application towards adjustments made. 8.57 AY 2019-20 Assessing Officer
2.67 FY 1996-2001 Period from March Supreme Court
Demand of Central Excise 3.54 2005 to October 2005 Mumbai High Court
duty, Interest & Penalty in respect of Naphtha procured at concessional rates used Period from November 1996
for products which are not exempted (Thal Unit) 18.61 to February 2005 (Interest) Supreme Court

Central Excise 8 Act, 1944

Period from July Commissioner of
17.89 2007 to August 2009 Central Excise and Service Tax, Mumbai
Demand of excise duty on account of Diversion of Urea for industrial usages (Thal Unit) Availment of Service Tax 8.93 FY 2010-14 Central Excise and Service Tax Appellate Tribunal, Ahmedabad Central Excise and
Cenvat Credit on Common Input Services (Thal Unit) Demand of Central Excise duty 19.32 FY 2011-2017 Service Tax Appellate Tribunal, Mumbai
in respect of Low Sulphur High Stock / Furnace Oil procured 6.97 September 1989 to December 2015

Commissioner of Central Excise

at concessional rates used for other than fertilizer products (Appeals)

Central Excise 9

(Trombay Unit) Central Excise and

Act, 1944

Rapid Wall Plaster cleared with Nil Rate of duty (Trombay Unit) 4.94 July 2010 to March 2016 Service tax Appellate Tribunal Mumbai
Withheld of subsidy on account of Diversion of Urea for industrial usages (Trombay Unit) 1.39 2015-16 Central Excise and Service Tax Appellate Tribunal, Ahmedabad

Central Excise 10 Act, 1944

Demand for wrong availment of cenvat credit MBPT (Trombay Unit) 0.16 2010-2015 Central Excise and Service tax Appellate Tribunal Mumbai Dy Commissioner of

Central Excise 11 Act, 1944

Wrong availment of MODVAT (Trombay Unit) 0.63 May 2000 to Sept 2000 Central Excise and Service Tax

 

Name of the Statute

Nature of dues Amount ( in Crore) Period to which the amount relates Forum where dispute is pending

Central Excise 12 Act, 1944

Demand of Service Tax on wrong availment of CENVAT credit in respect of input services used in the manufacture of exempted goods (Trombay Unit) 2.32 April 2011 to June 2017 Central Excise & Service Tax Appellate Tribunal, Mumbai

13 Service Tax

Demand of Service Tax on supply of Btal wagons (IPD Dept.) 0.27 Period from April 2008 to December 2012 Central Excise & Service Tax Appellate Tribunal, Mumbai Asst. Commissioner

14 Service Tax

Demand of Service Tax on Dispatch Money (Mktg.Dept.) 0.24 FY 2012-2015 of CGST & C.X. Division-1, Mumbai Asst. Commissioner

15 Service Tax

Demand of Service Tax on Dispatch Money (Mktg.Dept.) 0.024 FY 2016-2017 of CGST & C.X. Division-1, Mumbai Central Excise &

16 Service Tax

Demand of Service Tax on LD (Corporate Dept.) 0.78 FY 2012-2015 Service Appellate

17 Service Tax

Demand of Service Tax on wrong availment and distribution of CENVAT (Corporate Dept.) 0.41 Period from April 2014 to March 2016 Tribunal, Mumbai Commissioner Appeals, Mumbai

18 Service Tax

Demand of Service Tax on Handling Charges Demand of Service Tax on 0.01 Period from April 2006 to March 2008 Superintendent Service Tax, Aurangabad Central Excise &

19 Service Tax

supply of wagon to Central Railway (Thal Unit) 3.62 Period from April 2008 to June 2017 Service Appellate Tribunal, Mumbai

20 Service Tax

Non-payment of service Tax on Routine Maintenance Charges of private railway Siding (Thal Unit) 1.93 Period from March 2012 to August 2015 Central Excise & Service Appellate Tribunal, Mumbai

21 Service Tax

Demand of Service Tax on Sponsorship (Marketing Unit) 0.43 Period from September 2012 to March 2015 Period from Asst. Commissioner of Central Excise & Service Tax Asst. Commissioner

22 Service Tax

Demand on Dispatch Money (Corporate Unit) 0.54 September 2012 to March 2015 of Central Excise & Service Tax

23 Service Tax

Demand of Service Tax on Sponsorship (Corporate Unit) 1.07 Period from September 2012 to March 2015 Asst. Commissioner of Central Excise & Service Tax

24 Service Tax

Demand on LD(Trombay Unit) 3.60 Period from September 2012 to March 2015 Customs Excise & Service Tax Appellate Tribunal, Mumbai

25 Service Tax

Demand on Despatch Money (Trombay Unit) 2.92 Period from September 2012 to March 2015 Customs Excise & Service Tax Appellate Tribunal, Mumbai Asst. Commissioner

26 Service Tax

Service Tax on CS Deputation Manpower 0.10 2008-2014 of Central Excise & Service Tax

(viii) There were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax

Act, 1961 (43 of 1961) during the year.

(ix) (a) The Company has not defaulted in repayment of loans or other borrowings or in payment of interest thereon to any lender during the year.

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

(c) To the best of our knowledge and belief, in our opinion, term loans availed by the Company were, applied by the Company during the year for the purposes for which the loans were obtained. (d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the standalone

Ind AS financial statements of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term purposes by the Company.

(e) According to the information and explanations given to us and on an overall examination of the standalone Ind AS financial statements of the

Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its Joint Ventures.

(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 Joint Ventures.

(x) (a) The Company has not raised any moneys by way of Initial public offer or further Public offer (Including debt instruments), during the year and hence reporting under Clause (x) (a) of Para 3 of the order is not applicable to the Company.

(b) The Company has not made any preferential allotment or private placement of share or fully convertible debentures (fully, partially or optionally convertible) during the year and accordingly provisions of clause (x)(b) of Para 3 of the Order are not applicable to the Company.

(xi) (a) On the basis of our examination and according to the information and explanations given to us, no fraud by the Company or any material fraud on the Company has been noticed or reported during the year, nor have we been informed of any such case by the management.

(b) To the best of our knowledge, no report under subsection (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules,

2014 with the Central Government, during the year.

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

(xii) The Company is not a Nidhi Company and accordingly provisions of clause (xii)of Para 3 of the order are not applicable to the Company.

(xiii) The Company has complied with sections 177 and 188 of the Act w.r.t. transactions with related parties, wherever applicable. Details of the transactions with the related parties have been disclosed in the Standalone Ind AS Financial Statements as required by the applicable Indian Accounting Standards.

(xiv) (a) Based on information and explanation provided to us and our audit procedure, in our opinion the Company has an adequate internal audit system commensurate with the size and the nature of its business.

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

(xv) The Company has not entered into any non-cash transactions with the directors or persons connected with him. Hence the provisions of Section 192 of the Act are not applicable.

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

(b) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clause 3(xvi) (b) of the order is not applicable.

(c) The Company is not a Core Investment Company

(CIC) as defined in the Regulations made by the Reserve Bank of India and accordingly the provisions of clause (xvi)(c) of Para 3 of the Order is not applicable to the Company.

(d) According to the information and explanation provided to us during the course of audit, the group does not have any CIC as a part of the group and accordingly reporting under clause (xvi)(d) of Para

3 of the Order is not applicable to the Company.

(xvii) The Company has not incurred cash losses during the Financial Year covered by our audit and in the immediately preceding Financial Year.

(xviii) There has been no resignation of the statutory auditors of the Company during the year. Accordingly, clause 3(viii) 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 realization of financial assets and payment of financial liabilities, other information accompanying the standalone Ind AS financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) The Company has during the year spent the amount of Corporate Social Responsibility as required under subsection (5) of Section 135 of the Act. Accordingly, reporting under clause 3(xx) of the Order is not applicable to the Company.

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

For M M Nissim & Co LLP

For Gokhale & Sathe
Chartered Accountants Chartered Accountants
Firm Regn. No.107122W/W100672 Firm Regn. No. 103264W

N. Kashinath

Atul Kale
Partner Partner
Membership No. 036490 Membership No. 109947
UDIN: 23036490BGXRYV2718 UDIN: 23109947BGVVQE8885
Place: Mumbai
Dated: May 30, 2023

Annexure "B" to the Independent Auditors Report

(Referred to in Paragraph 2 ‘Report on Other Legal & Regulatory Requirements in our Independent Auditors Report to the members of the company on the Standalone Ind AS Financial Statements for the year ended March 31, 2023.)

Report on the Directions and Sub-directions issued by the Comptroller and Auditors General of India, the action taken thereon and its impact on the accounts and the standalone Ind AS financial statement of the Company under Section 143(5) of the Act:

A. DIRECTIONS

1. Whether the company has system in place to process all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated. Reply: Yes.

Most of the important functional areas of the organization like Financial Accounting, Sales Accounting, Human Resources Information, Payroll, Material/Inventory Management etc. have been computerized. The Company has implemented SAP during 2005-06 in order to make information processing fully integrated and centralized. Following modules have been implemented in SAP ERP wherein transactions are processed in an integrated manner.

Finance & Costing (FI-CO)

Asset Management (AM)

Production Planning (PP)

Plant Maintenance (PM)

Materials Management (MM)

Sales & Distribution (SD)

Cost Object & Profitability Analysis (CO-PA)

Business Warehouse (BW)

Environment Health & Safety (EHS)

Township Management

HR & Pay Roll (HCM- Implemented during the year

2006-07)

In 2010, along with an upgrade of the existing SAP business applications, following new solutions were also implemented:

SAP Enterprise Portal (Employee Self Service/

Manager Self Service)

Governance, Risk and Compliance

In 2020-21, Company has upgraded to SAP HANA system.

Attendance recording system is another subsidiary system specifically developed to meet the requirements of the Company for recording attendance of unionized category employees of the Company. The attendance data from this system is directly uploaded in SAP for payroll processing.

The IT system has been also configured to meet the compliance and business requirements as mandated by applicability of Ind AS and Goods and Services Act. Thus, the IT system enables integrated processing of most of the accounting transactions. However certain accounting transactions relating to subsidy income, recording of transactions relating to borrowings, payment of interest etc., corporate taxes, valuation of finished goods inventory as per principles of Ind

AS and certain year end provisions are processed directly in the Finance module of the SAP IT system as these transactions are standalone to finance. Such transactions and balances are adequately supported by relevant documents maintained / calculations maintained in Excel workbooks. A maker-checker protocol is also followed to check the calculations and the effect of the entries are posted in SAP system. Further based on the information processed in SAP system, such data is extracted for preparation and presentation of the standalone Ind AS financial statements as per Schedule III of Companies Act. Proper checks and controls are exercised so that the information presented is in consonance with the base data extracted from the SAP system.

2. Whether there is any restructuring of an existing loan or cases of waiver/write off of debts /loans/ interest etc. made by a lender to the company due to the companys inability to repay the loan? If yes, the financial impact may be stated. Whether such cases are properly accounted for? (In case, lender is a government company, then this direction is also applicable for the statutory auditor of lender company) Reply: No.

Based on audit procedure performed by us and as per the information and explanation given to us, there has been no instance of 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.

Further loan given by the Company is not restructured during the year. The Company is in receipt of principal and interest regularly.

3. Whether funds (grants/subsidy etc.) received/ receivable for specific schemes from Central/State

Government or its agencies were properly accounted for/ utilized as per its term and conditions? List the cases of deviation.

Reply: N.A.

As per information and explanations given to us,

Company has not received any funds for specific schemes from Central/State agencies during the year.

B. SUB-DIRECTIONS

i. State the impact of revision of subsidies for fertilizers products in valuation of fertilizers product closing stock.

Reply: Yes

As per explanation and information given to us, the summary of impact is stated as follows: As per the Companys accounting policy, finished goods inventories are valued at lower of Cost and Net

Realizable Value (NRV). In respect of Urea and other fertilizers which are subsidized/are sold at prices lower than cost, subsidy being a component of revenue is included while arriving at the net realizable value. While arriving at the net realizable for valuation of stock, the lowest selling prices and the applicable subsidy realizable on such stocks is considered. Accordingly, such revisions are factored while arriving at the Net realization of fertilizer stocks.

In case of Urea, the realizations of Urea are different as per extant policies for production upto reassessed capacity (RAC) and beyond reassessed capacity (BRAC). While the realization from the market is constant, the applicable rate of subsidy differs for stock quantities which are from production upto RAC and for production beyond RAC. Further, such realizations are adjusted for escalations/de-escalations in cost of inputs on estimated basis in accordance with known policy parameters.

In respect of P&K fertilizers, Government of India periodically notifies subsidy rates under Nutrient Based

Subsidy scheme from time to time to ensure that such fertilizers are made available to farmers at affordable prices.

As on 31st March 2023, closing stock of fertilizers are valued as under:-

Product

Quantity (in MT) (A) Cost Per MT (B) NRV Per MT (C) Rate of subsidy per MT considered in NRV (D) Stock valuation Rate (B) or (C) whichever is lower (E) Total Closing Stock Valuation (A) * (E) Crore (F)
Trom Urea- RAC- SILO 462.750 54,656.70 52,110.39 47,184.36 52,110.39 2.41

Trom Urea- RAC- Bagged in factory

56.87 55,392.15 52,938.14 48,012.11 52,938.14 0.30

Trom Urea- RAC- Marketing godowns

44.19 56,838.83 54,671.59 49,378.93 54,671.59 0.24
Thal Urea- BRAC- SILO 3,474.785 44,986.63 46,444.54 42,091.92 44,986.63 15.63

Thal Urea- BRAC- Bagged in factory

0.00 45,987.20 48,260.43 42,439.24 45,987.20 0.00

Thal Urea- RAC- Marketing godowns

18,381.95 47,798.43 50,167.69 44,875.03 47,798.43 87.86

Thal Urea –up to BRAC Marketing godowns

1,826.79 47,798.43 49,319.50 44,027.50 47,798.43 8.73
Suphala SILO 3,210.01 45,520.20 46,027.47 19,131.13 45,520.20 14.61
Suphala – Bagged 1,162.31 46,368.49 46,911.34 20,015.00 46,368.49 5.39
Suphala - Marketing godowns 40,637.55 47,939.13 48,771.49 21,321.49 47,939.13 194.81
DAP – Bulk 34,904.65 70,356.01 57,280.86 32,133.65 57,280.86 199.94
DAP – Marketing godowns 2044.50 72,208.00 59,133.27 34,090.48 59,133.27 12.09

20-20-0-13 – Marketing godowns

1167.65 57,961.71 51,564.28 25,228.22 51,564.28 6.02
10-26-26 – Bulk 37,182.85 51,367.42 49,128.39 21,968.55 49,128.39 182.67
10-26-26 – Marketing godowns 29.15 54,308.58 52,069.56 24,909.71 52,069.56 0.15

As finished goods are valued at

Net realizable value, revision in subsidies impact the financial statements only for such stocks which are valued at Net realizable value. Considering the steep decrease in prices of NPK nutrients, Government of India, accordingly, notified revised rates of subsidy as applicable from 1st April 2023, under Nutrient Based Subsidy scheme for P&K fertilizers on 18th May 2023, and the same has been considered for arriving at Net realizable value for Inventory valuation.

Theofimpactcost and of the difference between the rates for subsidy in respect of closing stocks of DAP, 20-20-0-13 and 10-26-26 which has been valued at NRV, at rates prevalent as on 31-3-2023 and revised rates effective from 1st April 2023, works out to 57.61 crore. However, only for the purpose of response to this additional sub direction; a separate computation for determining the notional impact of revision of subsidies for fertilizers products in valuation of such closing stock as at March 2023 has been done. The said impact has accordingly been quantified at 110.50 Crores using the subsidy value as at March 2022 as the base.

The Compliance/Action taken by management on last years management letter is as follows:

Para

Compliance/ Action Taken

1 Revenue from operation included an additional incentive of 50 per MT for acknowledging receipt and reporting the stock in MFMS which was not being passed on to the retailer by RCF citing OM no 14011/44/2017 DBT dated 18.05.2018. Clarification regarding non-payment of incentive of 50 per month to the retailers perpetually on account of adjustment of expenditure on PoS machine as per OM dated 18.05.18 needs to be obtained from the ministry to ensure correct booking of revenue from operation.

The Company has replied that accounting is in Order. However, this being an interpretation issue, the Company had given an assurance to audit that that they shall seek clarification in this regard. Accordingly, the Company has approached the Department of Fertilizer ("the DOF") for seeking a clarification on the said matter.

However, clarification is still awaited from the DOF.

2 O.M No 10212/20/2007-FPP dated 04.09.2017 stipulated charging of 5% on MRP by the Urea manufacturers for Neem coating on every 45 kg bag with no change in existing MRP of Urea i.e 5360per MT. RCFs contention that MRP for urea was subsequently fixed at 242 per 45 kg bag needs to be clarified by the Ministry to clear the ambiguity in interpretation of O M dated 04.09.2017and ensuring the correct booking of Revenue from operation.

The Company had given an assurance that they shall also seek clarification from DOF for said matter. Accordingly, the matter has been taken up with the DOF for seeking a clarification in this regard. However, clarification is still awaited from the DOF.

3 Subsidy income should have been calculated based on annual average water charges for the year claimed in the Annual Escalation Claim submitted to FICC for the financial year instead of calculating on the basis of water charges allowed in the retention price notified.

The Company has complied with the audit observations.

4 Rent received from investment property should have been shown as cash flow from investing activities instead of cash flow from operating activities.

The Company has complied with the audit observation.

5 Company needs to adopt a unified estimated useful life policy for same type of asset class.

The Company has complied with the audit observation.

6 Along with value and quantity of Carbon Emission Certificates (CER) and Renewable Energy Certificates(REC) disclosed, for better understanding RCF should also disclose movement of REC credits in future.

The Company has complied with the audit observation.

 

For M M Nissim & Co LLP

For Gokhale & Sathe
Chartered Accountants Chartered Accountants
Firm Regn. No.107122W/W100672 Firm Regn. No. 103264W

N. Kashinath

Atul Kale
Partner Partner
Membership No. 036490 Membership No. 109947
UDIN: 23036490BGXRYV2718 UDIN: 23109947BGVVQE8885
Place: Mumbai
Dated: May 30, 2023

Annexure "C" to the Independent Auditors Report

(Referred to in Paragraph 4(f) of the section ‘Report on Other Legal & Regulatory Requirements in our Independent Auditors Report to the members of the company on the Standalone Ind AS Financial Statements for the year ended March 31, 2023.)

Report On The Internal Financial Controls Under Clause (I) Of Sub-Section 3 Of Section 143 Of The Companies Act, 2013 ("The Act")

We have audited the internal financial controls with reference to the Standalone Ind AS Financial Statements of

RASHTRIYA CHEMICALS AND FERTILIZERS LIMITED ("the

Company") as of March 31, 2023 in conjunction with our audit of the Standalone Ind AS Financial Statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on internal financial controls with reference to the Standalone

Ind AS Financial Statements criteria established by the Company considering the essential components of internal control stated in the ‘Guidance Note 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 with reference to the Standalone

Ind AS Financial Statement based on our audit. We conducted our audit in accordance with the ‘Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to the Standalone Ind AS financial statement 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 with reference to the Standalone Ind AS Financial Statement and their operating effectiveness.

Our audit of internal financial

Standalone Ind AS Financial Statement included obtaining an understanding of internal financial controls with reference to the Standalone Ind AS Financial Statement, 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 judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS 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 with reference to the Standalone Ind AS Financial Statement.

Meaning of Internal Financial Controls with reference to Financial Statements

A Companys internal financial controls with reference to the

Standalone Ind AS Financial Statement is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial controls with reference to the Standalone

Ind AS Financial Statement include 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 Ind AS 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 Standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls With reference to the Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls with reference to the Standalone Ind AS Financial Statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to the Standalone Ind AS Financial Statements to future periods are subject to the risk that the internal financial controls with reference to the Standalone Ind AS

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls with reference to the standalone Ind AS financial statements and such internal financial controls were operating effectively as at March 31,

2023, based on the internal control with reference to the standalone Ind AS financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting

(the "Guidance Note") issued by the Institute of Chartered Accountants of India.

For M M Nissim & Co LLP

For Gokhale & Sathe
Chartered Accountants Chartered Accountants
Firm Regn. No.107122W/W100672 Firm Regn. No. 103264W

N. Kashinath

Atul Kale
Partner Partner
Membership No. 036490 Membership No. 109947
UDIN: 23036490BGXRYV2718 UDIN: 23109947BGVVQE8885
Place: Mumbai
Dated: May 30, 2023