We have audited the accompanying Standalone Financial Statements of NLC INDIA LIMITED ("the Company") ("NLCIL"), which comprise the Standalone Balance Sheet as at 31st March, 2024, the Standalone Statement of Profit and Loss (including other Comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year ended including a summary of the material accounting policies and other explanatory information which are included in the Returns for the year ended on that date audited by the branch auditors of the Company's branches located at Talabira and Barsingsar (hereinafter referred to as "Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2024, its profit (including other comprehensive income), the changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the "Auditors' Responsibilities for the Audit of the Standalone Financial Statements" section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained by us and the audit evidence obtained by the branch auditors in terms of their reports referred to in "Other Matters" section below, is sufficient and appropriate to provide a basis for our opinion on the Standalone Financial Statements.
Material Uncertainty Related to Going Concern
We draw attention to Note 60 (c) of the Standalone Financial Statements, wherein the non-availability of adequate quantum of land for lignite mining operations at Neyveli mines and power generation have been elaborated upon. Such non-availability situation may cast significant uncertainties relating to the operations of the Company and eventually the Company's ability to continue as a going concern in future.
Our Opinion is not modified in respect of this matter.
Emphasis of Matter
We draw attention to the following matters in the Notes to the Standalone Financial Statements:
1. Note 10(a)(e), with regard to amount billed on VSVS to DISCOMs and pending adjudication, the Company considers the entire outstanding amount of ^ 318.12 Crore as recoverable.
2. Note 54, with regard to the determination of the transactions with MSME vendors and balances thereof, have been done based on the certificates received from the respective parties as made available in the GEM Portal system. The disclosures in respect of MSME vendors, interest liability thereon as per MSME Act, Income tax computations as such need to be ascertained from MSME Vendors are computed manually and accounted accordingly.
3. Note 17(a)(k), where the Company has to raise 25% of incremental borrowings by way of issuance of debt securities, the Company after considering its liquidity position and the size of the Bond requirement, the Company did not raise funds by way of issuing any debt securities during FY 2023-24.
Our Opinion on the Standalone Financial Statements is not modified in respect of the above matters.
As reported by the auditor of the Talabira Branch in their Independent Auditor's Report dated 14th May, 2024 is below:
We draw attention to Note 23(c) in the Notes to the Standalone Financial Statements regarding provision made during the year, towards
differential mining charges and HPC wages amounting to ^ 162.30 Crore which are under dispute.
Opinion of the auditor of the branch with respect to branch's financial statements is not modified in respect of the above matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.
The following have been considered as Key Audit Matters:
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Sl.
No.
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Key Audit Matter
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Auditors' Response
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1.
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Contingent Liabilities and Commitments
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Assessment of provisions and contingent liabilities in respect of certain
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In
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view of the significance of the matter, we performed the
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litigations including direct and indirect taxes, various claims filed by other
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following key audit procedures:
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parties not acknowledged as debt.
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•
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Testing the design and operating effectiveness of controls
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A high level of judgement is required in estimating the amount of provisioning.
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relating to taxation and contingencies;
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The Company's assessment is supported by the facts of matter, their own judgement, experience and independent legal advice wherever considered necessary. Accordingly, unexpected adverse outcomes which may significantly
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We evaluated management's judgements in respect of estimates of provisions, exposures and contingencies;
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impact the reported profit and net assets are disclosed.
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In understanding and evaluating management's judgements,
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A sum of ^ 34,370.17 Crore have been considered by the Company towards
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we have utilized our internal tax experts;
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contingent liability and commitments representing claims of third parties.
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We have also examined the status of recent and current tax
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Refer Note 52 of the Standalone Financial Statements.
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assessments and enquiries, the outcome of previous claims,
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Included in the above, is a sum of ^ 7,329.38 Crore that has been considered by the Company towards contingent liability which includes claims of third party's
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judgemental positions taken in tax returns and developments in the tax environment; and
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compensation for land acquisition (disclosed as “From Others"). The Company
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Additionally, we also evaluated the adequacy of disclosures
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has not accepted the said claims which are contested in legal proceedings and
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on provisions and contingencies made in the Standalone
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are pending for disposal by the appellate authorities.
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Financial Statements in accordance with Ind AS 37 -
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Further, there are several items of disputes pending in various appellate forums in respect of determination and quantification of liability towards direct and indirect taxes by the departments. Liabilities in respect of disputed demands are considered only as contingent liabilities pending the outcome of the decision of the appellate authorities. The total unpaid amount of disputed liabilities on account of Direct and Indirect taxes (including land tax) is ^ 1,420.27 Crore.
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Provisions, Contingent Liabilities and Contingent Assets.
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2
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Capital Work in Progress - Projects on hold
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Accuracy of impairment provisions in respect of exploration and evaluation
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Our audit procedures performed included the following:
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assets and projects under “Capital work in progress" which involves critical judgement of the management in respect of feasibility of ongoing projects.
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We obtained the details of project expenses of Bithnok and BTPSE project from the management;
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The Standalone Financial Statements include relevant disclosures that identify and explain the amounts arising from such feasibility study. Refer Note 5 to the Standalone Financial Statements.
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•
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Noted that the total project cost comprises of land amounting to ^ 194.75 Crore, capital advances of ^ 129.25 Crore and CWIP of ^ 50.66 Crore; and
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Further, an aggregate amount of ^ 374.66 Crore towards land, capital advance and CWIP relate to Bithnok and BTPSE which are currently on hold, on account of cancellation of contract by the end customer.
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Reviewed the basis of provision of ^ 70.62 Crore made as at 31st March, 2024.
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3
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Expected Credit Loss on Trade Receivables
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Ind AS 109 - Financial instruments (Ind AS 109) requires the Company to provide
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Our audit procedures performed included the following:
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for impairment of its financial instruments (designated as amortized cost or
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We understood the process of ECL estimation and tested the
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fair value through other comprehensive income) using the expected credit loss
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design and operating effectiveness of key controls around
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(ECL) approach. Such ECL allowance is required to be measured considering the
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data extraction and validation;
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guiding principles mentioned in the Standard.
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We, having regard to profile and the background of the
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In the process of applying such principles and other requirements of the Standard,
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customers, collection of dues and the measures of the
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a significant degree of judgement has been applied by the management. The ECL
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Govt(s) in regard to settlement of dues by such customers,
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in respect of trade receivables represents management's best estimate of the
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understood the methodology used by the management to
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loss allowance. The ECL allowance is computed based on a simplified model
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arrive at ECL provision and examined certain assumptions
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considering ageing of trade receivables and also trend of collection of dues.
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used by the Company;
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The calculation of ECL allowance is a complex area considering the profile
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We also tested the arithmetical accuracy and assessed
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and background of customers and requires management to make significant
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the judgements used in the management's model used to
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assumptions on customer payment behaviour and other relevant risk characteristics when assessing the historical information and estimating the level and timing of expected future cash flows.
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calculate provision for credit losses;
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Sl.
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Key Audit Matter
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Auditors' Response
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The provision for ECL on trade receivables amounts to ^ 383.91 Crore as
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We have initiated confirmation of balances and the
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at 31st March, 2024. Refer Note 10(a)(c) to the Standalone Financial Statements.
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differences, if any, were reconciled by the Management in respect of confirmations received. We have reviewed the same and noted on the explanations provided by the management in arriving at the loss allowance for the year ended 31st March, 2024; and
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We assessed the disclosures included in the Ind AS Financial Statements with respect to such allowance/ estimate are in accordance with the requirements of Ind AS 109 and Ind AS 107 - Financial Instruments: Disclosures.
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4
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Property, Plant & Equipment and Intangible Assets
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Property, Plant and Equipment and Intangible Assets amounting to
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Our audit procedures performed included the following:
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^ 18,056.80 Crore represents significant balances recorded in the Balance Sheet in the Standalone Financial Statements.
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We evaluated the assumptions made by management in the determination of carrying values and useful lives to ensure
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There are areas where management judgement impacts the carrying amount
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that these are consistent with the principles of Ind AS 16 -
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of property, plant and equipment, intangible assets and their respective
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Property, Plant and Equipment and Ind AS 38 - Intangible
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depreciation / amortization rates.
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Assets
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These include the decision to capitalise or expense costs; the timeliness
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We assessed whether the carrying values and the useful
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of the capitalization of the assets; useful life of the assets and the use of
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lives were reasonable by challenging management's
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the management assumptions and estimates for the determination or the
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judgements through comparing the useful lives prescribed
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measurement and recognition criteria for assets retired from active use.
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in Schedule II to the Companies Act, 2013, rates/ guidelines
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Due to the materiality in the context of Balance Sheet of the Company and the level of judgement and estimates required, we consider this to be as area of significance and considered to be a key audit matter. Refer Note 2 and 4 to the Standalone Financial Statements.
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prescribed by Central Electricity Regulatory Commission (CERC), guidelines issued by Ministry of New and Renewable Energy (MNRE) and the useful lives of certain assets as per the technical estimate of the management;
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We compared the useful lives of each class of asset in the current year to the previous year to determine whether there were any significant changes in the useful lives of assets;
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We tested the controls in place over the property, plant and equipment and intangible assets, evaluated the appropriateness of capitalisation policies, performed tests of details on costs capitalised and assessed the timeliness of capitalisation including decapitalisation of assets retired from active use and the application of the asset life;
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In performing these substantive procedures, we assessed the judgements made by management including the nature of underlying costs capitalised; the appropriateness of asset lives applied in the calculation of depreciation and amortization; and
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We have observed that the management has regularly reviewed the aforesaid judgements and there are no material changes.
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5
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Financial Liabilities - Borrowings
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The Balance Sheet as at 31st March, 2024, reflects financial liabilities-Borrowings
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Our
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key audit procedures included the following:
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totaling ^ 7,968.77 Crore. These liabilities encompass various forms of borrowings, comprising bonds issued, bank borrowings, and foreign currency borrowings. Refer Note 17(a) and 21(a) of the Standalone Financial Statements.
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We have evaluated the appropriateness of the accounting policies and disclosures related to financial liabilities.
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The above includes an amount of ^ 913.49 Crore classified as current liabilities.
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Tested the accuracy and completeness of financial liability balances by examining supporting documentation like
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There may be complex accounting requirements around the subsequent
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debt agreements and analysed debt covenant calculations
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measurement and presentation of financial liabilities.
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prepared by management and considered the existence of
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Evaluating the suitability of debt covenants and assessing the potential risk of
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any potential breaches.
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covenant violations necessitates substantial auditor judgement.
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Assessed the adequacy of disclosures in the financial statements related to financial liabilities.
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Information other than the Standalone Financial Statements and Auditors' Report thereon
The Company's Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Directors' Report including Annexures to Directors' Report and Business Responsibility & Sustainability Report, but does not include the Standalone Financial Statements, Consolidated Financial Statements and our Auditors' report thereon. The other information is expected to be made available to us after the date of this Auditors' report.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
On receipt of other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and we shall:
(a) If the material misstatement is corrected, perform necessary procedure to ensure the correction; or
(b) If the material misstatement is not corrected after communicating the matter to those charged with governance, take appropriate action considering our legal rights and obligations, to seek to have the uncorrected material misstatement appropriately brought to the attention of users for whom this Auditors' report is prepared.
Responsibilities of Management and those charged with Governance for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance (including Other Comprehensive Income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, the Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
These Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditors' Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's 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 Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the Company and its branches to express an opinion on the Standalone Financial Statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of the Company, for which we are the independent auditors. In respect of the branches included in the Standalone Financial Statements, which have been audited by the respective branch auditors who remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. Our responsibilities in this regard are further described in the section titled 'Other Matters' in this audit report.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matters
a. We did not audit the financial statements of two (2) Branches located at Talabira and Barsingsar, included in the Standalone Financial Statements of the Company whose financial statements reflect total assets of ^ 4,052.73 Crore as at 31st March, 2024 and total income of ^ 2,732.37 Crore for the year ended 31st March, 2024, total net profit before tax of ^ 873.42 Crore for the year ended 31st March, 2024 and total comprehensive income of ^ 873.42 Crore for the year ended 31st March, 2024, and net cash inflows of ^ 0.71 Crore for the year ended 31st March, 2024. The financial statements of these Branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these Branches, is based solely on the reports of such branch auditors and the procedures performed by us as stated under Auditors' Responsibilities for the Audit of the Standalone Financial Statements section above.
b. Certain Debit/Credit balances pertaining to vendors are pending independent confirmation and consequential reconciliation thereof.
c. Regulation 17(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandates that at least half of the directors on the board should be independent directors. The Company has yet to fulfil this requirement, leading to penalties imposed by the Stock Exchanges.
d. During the year, the Company has not complied with the requirements relating to the appointment of at least 1 independent nominee director on the Board of NLC Tamil Nadu Power Limited, which is an unlisted material subsidiary, as required under Regulation 24(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
e. Regulation 19A(1) of the Securities Contract (Regulation) Rules, 1957, stipulating a minimum public shareholding of 25%, remained unmet until 11th March, 2024. Following this period of non-compliance, the Government of India has disinvested and reducing its stake by 7% through Offer For Sale (OFS).
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in "Annexure-I" a statement on the matters specified in paragraphs 3 and 4 of the said Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books except for the matters stated in the paragraph 2(k)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended;
c. The reports on the accounts of the Branch Offices of the Company audited under Section 143(8) of the Act by the Branch Auditors have been sent to us and have been properly dealt with by us in preparing this report;
d. The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;
e. In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act;
f. The matter described in the "Material Uncertainty Related to Going Concern" paragraph above, in our opinion, may not have an adverse effect on the functioning of the Company;
g. The Company being a Government Company, the provisions of Section 164(2) of the Act relating to disqualification of directors is not applicable in view of the Notification No: G.S.R, 463(E) dated 5th June, 2015, issued by the Ministry of Corporate Affairs;
h. The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2(b) above on reporting under Section 143(3) of the Act and paragraph 2(k)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended;
i. With respect to adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we give our report in "Annexure-II". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting with reference to Standalone Financial Statements;
j. The Company being a Government Company, the provisions of Section 197 of the Act relating to managerial remuneration is not applicable in view of the Notification No: G.S.R, 463(E) dated 5th June, 2015, issued by the Ministry of Corporate Affairs. Accordingly, reporting in accordance with requirement of provisions of Section 197(16) of the Act is not applicable to the Company; and
k. With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements - Refer to Note 52 to Standalone Financial Statements;
ii. The Company has long term contracts for coal mining, power sale, lignite / coal sale, O&M / AMC Contracts, project execution etc. The Company has assessed all these contracts as at 31st March, 2024, and concluded that there were no material foreseeable losses that needs to be considered on account of these contracts. The Company did not have any derivative contracts as at 31st March, 2024;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. (a) The final dividend paid by the Company during the year, which pertains to previous year 2022-23 is in accordance with Section 123 of the Act, to the extent it applies to payment of dividend;
(b) The interim dividend declared and paid by the Company during the year is in accordance with Section 123 of the Act; and
(c) The Board of Directors of the Company have proposed final dividend for the year 2023-24 which is subject to the approval of the Members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with Section 123 of the Act, as applicable.
However, the aggregate of interim dividend paid by the Company during the FY 2023-24 and proposed dividend for the FY 2023-24 is less than the minimum dividend criteria prescribed under the guidelines issued by Department of Investment & Public Asset Management (DIPAM). The Company vide its letter dated 23rd February, 2024 had applied for exemption from payment of minimum dividend for the FY 2023-24 as prescribed under DIPAM guidelines and the same is pending for approval.
vi. Based on our examination, which included test checks, the Company has used SAP for maintaining its books of account, which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year. During the course of our audit, we did not come across any instances of the audit trail feature being tampered with.
Further, in relation to the 7 external applications that were integrated with SAP software, in connection with Auction & tender system, Integrated Weighment Tracking System, employees advance and reimbursement claims, GST Central Invoicing System & House Allotment, Rent Accounting & other Township related Management System, based on the audit procedures, we confirm that there is no audit trail (edit log) facility that was enabled (Refer Note No. 60(d) to the Standalone Financial Statements).
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 01, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.
3. As required by Section 143(5) of the Act, our comments in regard to the directions and sub-directions issued by the Comptroller and Auditor General of India is given in "Annexure - III".
For Manohar Chowdhry & Associates, For Sundaram & Srinivasan,
Chartered Accountants, Chartered Accountants,
Firm Regn. No. 001997S Firm Regn. No. 004207S
M S N M Santosh P Menakshi Sundaram
Partner Partner
M No. 221916 M No. 217914
UDIN: 24221916BKFZOU6999 UDIN: 24217914BKBOTW1605
Place: Chennai Date: 15th May, 2024
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