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You can view full text of the latest Auditor's Report for the company.

BSE: 526371ISIN: INE584A01023INDUSTRY: Mining/Minerals

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114.25
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162.55
Year End :2017-03 

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS Financial Statements of NMDC Limited (“the Company”), which comprises the Balance Sheet as at 31st March 2017, the Statement of Profit and Loss (Including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information (herein after referred to as “Standalone Ind AS Financial Statements”) which supersedes our earlier Independent Auditor’s report dated 25th May 2017 in the light of the observations of the Comptroller and Auditors General of India u/s 143 (6) (b) of the Companies Act, 2013 read with subsection 5 of Section 143.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors are 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, financial performance including other comprehensive income, cash flows and changes in the equity 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, read with relevant rules issued there under.

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.

Auditor’s Responsibility

Our responsibility is to express an opinion on those standalone Ind AS Financial Statements based on our audit.

We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS Financial Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS Financial Statements.

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.

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at March 31, 2017, and its financial performance including other comprehensive income, its Cash Flow and Changes in Equity for the year ended on that date.

Other Matter

1. The comparative financial information of the Company on the transition date opening Balance Sheet as at 1st April 2015 included in these Standalone Ind AS Financial Statements are based on the previously issued statutory Financial Statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report dated 23.05.2015 for the year ended 31st March 2015, expressed an unmodified opinion on the said standalone Financial Statements, as adjusted for the differences in the accounting principles adopted by the Company on the transition to the Ind AS which have been audited by us.

2. We did not audit the Financial Statements/ information of 6 branches included in the standalone Financial Statements of the Company whose Financial Statements / financial information reflect total assets of Rs.18,031.42 Crore as at 31st March, 2017 and total revenues of Rs.8,887.37 Crore for the year ended on that date, as considered in the standalone Financial Statements. The Financial Statements/information of these branches has been audited by the branch auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) as amended issued by the Central Government of India in terms of sub-Section (11) of Section 143 of the Act, we give in the “ANNEXURE A” a statement on the matters specified in the paragraphs 3 and 4 of the Order.

2. As required by Section 143 (5) of the act, we give in “ANNEXURE - B”, a statement on the matters specified by the Comptroller and Auditor General of India for the Company.

3. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and reports of other auditors.

c) The reports on the accounts of the branch offices of the Company audited under Section 143 (8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

d) The Balance Sheet, the Statement of Profit and Loss and the statement of Cash Flow and statement of the Changes in Equity dealt with by this report are in agreement with the books of account;

e) In our opinion, the aforesaid standalone Ind AS Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued there under;

f) As per notification No. GSR 463(E) dated 5th June 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 164(2) of the Companies Act, 2013 is not applicable to the Company;

g) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in “ANNEXURE - C”.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS Financial Statements;

ii. The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts;

iii. There are no amounts required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in its standalone Ind AS Financial Statements as to holdings as well as dealings in specified bank notes during the period from 8th Nov 2016 to 30th Dec 2016 and these are in accordance with the books of accounts maintained by the Company.

“Annexure A” to the Independent Auditor’s Report

Referred to in paragraph 1 under the heading ‘Report on Other Legal & Regulatory Requirement’ of our report of even date to the Financial Statements of the Company for the year ended March 31, 2017:

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

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

(c) As the physical verification is in process, the shortage/excess arising out of the same will be dealt with in the books on completion of verification. According to the information and explanations given to us and on the basis of our examination of the records of the Company, as to whether the title deeds of immovable properties are held in the name of the Company, our observations are listed below:

Sl. No.

Description of Assets

Type of Asset

Area

Amount (in Rs. Crores)

Remarks

01

General / Social Amenities for which no comments passed

Leasehold Lands (in Acres)

2337.91

1.87

Building (Net Block)

80.27

Gross Block 100.16 Crores

02

General Amenities for which Company holds possession letter issued by Joint Secretary

Leasehold Lands (in Acres)

6826.25

17.66

03

General Amenities for which Company holds possession letter issued by Mining Officer

Mining Lease (in Acres)

3216.07

120.72

04

General Amenities for which Company holds possession letter issued by Chief Secretary,

Mining Resources

Leasehold Lands (in Acres)

784.94

0.0018

05

General / Social Amenities for which no comments passed

Free Hold Land (in Acres)

400.06

129.36

Building (Net Block)

75.73

Gross Block-101.60 Crores

06

Industrial land having Provisional allotment letters of 13.43 Acres.

Freehold Land (in Acres)

11.35

139.21

07

Industrial Land of 26.39 Acres Purchased from M/s Allyn Watches Ltd.

Freehold Land (in Acres)

24.23

5.88

08

Industrial land of 1.32 Acres acquired from Chhattisgarh Housing Board

Freehold Land (in Acres)

1.43

0.83

Total

13602.24

571.53

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

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

(3) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly the provisions of clause (3) (iii) (a) to (c) of the order are not applicable to the Company and hence not commented upon.

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

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

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

(7) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income - Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2017 for a period of more than six months from the date on when they become payable.

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

Unit

Name of Statue

Nature of Dues

Period

Forum where Dispute is Pending

Amount (In Rs. Crores)

Kirandul

The Finance Act, 1994

Service Tax

July 2012 -June 2014

The Appellate Tribunal

10.40

The Finance Act, 1994

Service Tax on Royalty

2016-17

Jabalpur High Court & Karnataka High court

46.89

MP Commercial Tax Act

Commercial Act

2002-03, 2005-06, 2008-09

Dy. Commissioner of Commercial Tax (Appeal)

1.60

Donimalai

Karnataka Sales Tax Act 1957

Tax on ERP Licenses

1991-92, 1992-93

Dy. Commissioner of Commercial Tax, Bellary

0.51

Donimalai

Karnataka Forest Act 1963

Forest Development Tax

2008-09 to 2010-11

Hon’ble Supreme Court of India

243.69

Central Excise, Customs and Service tax

Service Tax

2012-13 to till date

Commissioner of Central Excise (Appeals)

0.20

Panna

Royalty

Service Charges

2004-05

Diamond Officer

0.89

Commercial Tax

Sales & Entry Tax

2012-13 & 2013-14

DCIT, Sagar

0.42

Commercial Tax

Sales Tax

2014-15

DCIT, Sagar

0.04

Income Tax

TDS

2007-08 to 2016-17

DCIT(TDS), Jabalpur

0.68

Bacheli

The Finance Act, 1994

Service Tax

July 2012-June 2014 & 01.04.201631.03.201 7

The Appellate Tribunal & Jabalpur High-Court

108.03

Head

Office

Income Tax Act, 1961

Income Tax

201 3-14, 2012-1 3, 201 1-12, 2010-1 1 & 2009-10

CIT(A)

368.45

2010-1 1, 2005-06, 1990-00 & 2001-02 2006-07 to 2009-10

High Court

1263.28

2011-12

ITAT, Hyderabad

30.80

The Finance Act, 1994

Service Tax

01.10.2013 to 30.09.2014 & 01.10.2007 to 31.10.2012

CESTAT

28.28

01.07.2012 to 31.03.201 5

COM.(A), Mysore

0.17

Total

2104.65

(8) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not taken any loan either from financial institutions or from the government and has not issued any debentures.

(9) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not raised monies by way of initial public offer or further public offer including debt instruments and term loans. Accordingly, the provisions of Clause 3 (ix) of the Order are not applicable to the Company and hence not commented upon.

(10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(11) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act.

(12) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of Clause 4 (xii) of the Order are not applicable to the Company.

(13) In our opinion, all transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable Accounting Standards.

(14) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3 (xiv) of the Order are not applicable to the Company and hence not commented upon.

(15) Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of Clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.

(16) In our opinion, the Company is not required to be registered under Section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of Clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.

For Tej Raj & Pal

Chartered accountants

ICAI Reg No: 304124E

CA Dinakar Mohanty

Partner

Membership No. 059390

Place : Bhubaneswar

Date : 1 1.07.2017