Mar 31, 2021
REPORT ON THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTSOPINION
We have audited the accompanying standalone Ind AS financial statements of Vedanta Limited ("the Companyâ), which comprise the Balance sheet as at March 31, 2021, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information
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, as amended ("the Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act.
Our responsibilities under those Standards are further described in the ''Auditorâs Responsibilities for the Audit of the Standalone Ind AS Financial Statementsâ section of our report. We are independent of the Company in accordance with the ''Code of Ethicsâ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the 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 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.
We draw attention to note 3(c)(A)(viii) of the accompanying standalone financial results which describes the uncertainty arising out of the demands that have been raised on the Company, with respect to governmentâs share of profit oil by the Director General of Hydrocarbons and one of the pre-conditions for the extension of the Production Sharing Contract (PSC) for the Rajasthan oil block is the settlement of these demands. While the Government has granted permission to the Company to continue operations in the block till July 31, 2021 or signing of the PSC addendum, whichever is earlier, the Company, based on external legal advice, believes it is in compliance with the necessary conditions to secure an extension of this PSC and that the demands are untenable and hence no provision is required in respect of these demands. Our opinion is not modified in respect of this matter.
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 for the financial year ended March 31, 2021. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditorâs responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Recoverability of carrying value of property plant and equipment at Tuticorin (as described in note 3(c)(A)(vii) of the standalone Ind AS financial statements) |
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As at March 31, 2021, the Company had significant |
Our audit procedures included the following:- |
amounts of property, plant and equipment, capital |
⢠Assessed through an analysis of internal and external factors |
work in progress, exploration intangible assets under |
impacting the Company, whether there were any indicators of |
development and investments being carried at cost. We focused our efforts on the Cash Generating Unit |
impairment in line with Ind AS 36. |
("CGUâ) at Tuticorin within the copper segment; as it |
⢠Specifically, in relation to the CGU where impairment indicators |
had impairment indicators and had a total carrying value |
were identified, obtained and evaluated the valuation models |
of ''2,144 crore. Recoverability of property plant and equipment has |
used to determine the recoverable amount by assessing the key assumptions used by the management including: |
been identified as a key audit matter due to: ⢠The significance of the carrying value of assets |
- Assessed the basis for estimating the forecasted volumes and the expected start date of the plant. |
being assessed. ⢠The withdrawal of the Companyâs licenses to |
- Tested the weighted average cost of capital used for discounting |
the cash flows to their present value. |
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operate the copper plant. |
- Tested the valuation models for arithmetical accuracy. |
⢠The fact that the assessment of the recoverable |
- Engaged valuation experts to assist in performance of the above |
amount of the Companyâs CGUs and investments |
procedures. |
involves significant judgements about the future |
- Assessed the implications of withdrawal of Companyâs license |
cash flow forecasts, start date of the plant and the |
to operate the copper plant including sensitivities of key |
discount rate that is applied. |
assumptions. Also, read the court judgments in respect of the |
The key judgements and estimates centered on the |
case and external legal opinions in respect of the merits of |
likely outcome of the litigations, cash flow forecasts and |
the appeal filed by the Company and assessed managementâs |
discount rate assumptions |
position through discussions with the legal counsel to determine the basis of their conclusion. ⢠Assessed the competence and objectivity of the experts engaged by us. ⢠Assessed the disclosures made by the Company in this regard. |
Evaluation of Going Concern assumption of accounting financial statements) |
) (as described in note 3(c)(A)(xi) and 3(c)(A)(viii) of the standalone Ind AS |
The standalone financial statements of the Company |
Our procedures in relation to evaluation of going concern included the |
are prepared on the going concern basis of accounting. |
following: |
The evaluation of the appropriateness of adoption of |
⢠Obtained an understanding of the process followed by the |
going concern assumption for preparation of these |
management and tested the internal controls over the liquidity |
standalone financial statements has been performed |
assessment, compliance with the debt covenants and preparation |
by the management of the Company because of |
of the cash flow forecast, and validation of the assumptions and |
uncertainties in the market conditions including future |
inputs used in the model to estimate the future cash flows. |
economic outlook on account of the prevailing global pandemic COVID-19 and the uncertainty around the |
⢠Tested the inputs and assumptions used by the management in |
extension of the Production Sharing Contract (PSC) of |
the cash flow forecast against historical performance, budgets, |
the Rajasthan oil and gas block. |
economic and industry indicators, publicly available information, the |
The Company has prepared a cash flow forecast for |
Companyâs strategic plans and benchmarking of key market related conditions. |
next eighteen months from year end which involves judgement and estimation of key variables. |
⢠Assessed key assumptions including those pertaining to revenue |
The above has been considered as a key audit matter as |
and the timing of significant payments in the cash flow forecast for the following eighteen months. |
auditing the Companyâs going concern assessment as described above is complex and involves a high degree |
⢠Tested managementâs sensitivity analysis on key assumptions like |
ofjudgment to assess the reasonableness of the cash |
input prices, discount rate and selling prices to determine their |
flow forecasts, planned refinancing actions and other |
impact on the projections of future cash flows also on any possible |
assumptions used in the Companyâs going concern |
cash outgo for securing the extension of the Rajasthan oil and gas block. |
analysis. |
⢠Compared the details of the Companyâs long-term credit facilities to the supporting documentation. ⢠Assessed the relationship between the parent company and the Company, including inspection of various financings agreements to examine whether the same were impacted by the affairs of the parent company. Additionally, we assessed whether there are any pre-existing arrangements between the parent and the Company to alleviate the financial difficulties of the parent. ⢠Assessed the disclosures made by the Company in this regard. |
Key audit matters How our audit addressed the key audit matter |
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Recoverability of disputed trade receivables in power segment (as described in note 3(c)(B)(ii) and note 7 of the standalone Ind |
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AS financial statements) |
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As of March 31, 2021 the value of disputed receivables in Our audit procedures included the following:- |
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the power segment aggregated to ''1,323 crore. ⢠|
Examined the underlying power purchase agreements. |
Due to disagreements over the quantification or ⢠|
Examined the relevant state regulatory commission, appellate |
timing of the receivable, the recovery of receivables from GRIDCO, a customer in the power segment, are |
tribunal and court rulings. |
subject to increased risk. Some of these balances are |
Examined external legal opinions in respect of the merits of the case |
also subject to litigation. These receivables include long |
and assessed managementâs position through discussions with the |
outstanding balances as well and are also subject to counter party credit risk and hence considered as a key |
managementâs in-house legal team to determine the basis of their conclusion. |
audit matter. ⢠|
Examined managementâs assessment of recoverability of receivables. |
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Sought independent external lawyer confirmation from Legal Counsel representing the Company in these cases. |
⢠|
Assessed the competence and objectivity of the Company''s experts. |
⢠|
Assessed the disclosures made by the Company in this regard. |
Accounting and disclosure of transactions with the parent company and its affiliates (as described in note 37 of the standalone |
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Ind AS financial statements) |
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The Company has undertaken transactions with Our procedures included the following: |
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Vedanta Resources Limited (âVRLâ), its parent company ⢠|
Obtained and read the Companyâs policies, processes and |
and its affiliates pertaining to payment of brand and |
procedures in respect of identification of such related parties, |
management fee; and obtaining guarantees and |
obtaining approval, recording and disclosure of related party |
payment of commission in consideration thereof. |
transactions. |
Accounting and disclosure of such related party ⢠|
Tested such related party transactions and balances with the |
transactions has been identified as a key audit matter |
underlying contracts, confirmation letters and other supporting |
due to: |
documents. |
⢠Significance of such related party transactions; ⢠|
Held discussions and obtained representations from the |
⢠Risk of such transactions being executed without |
management in relation to such transactions. |
proper authorizations; ⢠|
Examined the approvals of the board and/or audit committee for |
⢠Risk of material information relating to such |
entering into these transactions. |
transactions not getting disclosed in the financial ⢠|
Read the disclosures made in this regard in the financial statements |
statements. |
to assess whether the relevant and material information have been disclosed. |
Claims and exposures relating to taxation and litigation (as described in note 3(c)(A)(viii), 3(c)(B)(i), 36(D), 42 of the standalone |
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Ind AS financial statements) |
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The Company is subject to a large number of tax and Our audit procedures included the following: - |
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legal disputes, including objections raised by auditors ⢠|
Obtained an understanding of the process of identification of |
appointed by the Director General Hydrocarbons in |
claims, litigations and contingent liabilities and identified key |
the oil and gas segment, which have been disclosed / |
controls in the process. For selected controls we have performed |
provided for in the financial statements based on the facts and circumstances of each case. |
tests of controls. |
Taxation and litigation exposures have been identified |
Obtained the summary of Companyâs legal and tax cases and |
as a key audit matter due to the complexities involved |
assessed managementâs position through discussions with the |
in these matters, timescales involved for resolution |
Legal Counsel, Head of Tax and operational management, on both |
and the potential financial impact of these on the |
the probability of success in significant cases, and the magnitude of |
financial statements. Further, significant management |
any potential loss. |
judgement is involved in assessing the exposure of each ⢠|
Examined external legal opinions (where considered necessary) and |
case and thus a higher risk involved on adequacy of |
other evidence to corroborate managementâs assessment of the |
provision or disclosure of such cases. |
legal claims. |
⢠|
Assessed the competence and objectivity of the Company''s experts. |
⢠|
Engaged tax specialists to technically appraise the tax positions taken by management with respect to local tax issues. |
Assessed whether management assessment of similar cases is consistent across the divisions and obtained managementâs explanations for differences, if any. |
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Assessed the relevant disclosures made within the financial statements to address whether they reflect the facts and circumstances of the respective tax and legal exposures and the requirements of relevant accounting standards. |
Key audit matters |
How our audit addressed the key audit matter |
Recoverability of unutilized Minimum Alternate Tax (MAT) credits included under deferred tax assets (as described in note 3(c) |
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(A)(vi) and note 33 of the standalone Ind AS financial statements) |
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Deferred tax assets as at March 31, 2021 includes MAT |
Our audit procedures included the following:- |
credits of ''3,701 crore relating to the Company which |
⢠Obtained an understanding of the managementâs process for |
is available for utilization against future tax liabilities. |
estimating the recoverability of deferred tax assets and identified |
Out of the same, ''340 crore is expected to be utilized in |
key controls in the process. For selected controls we have |
the fourteenth year, fifteen years being the maximum permissible time period to utilize the same. |
performed tests of controls. ⢠Obtained and analysed the future projections of taxable profits |
The analysis of the recoverability of deferred tax assets |
estimated by management, assessed key assumptions used, |
has been identified as a key audit matter because the |
including the analysis of the consistency of the actual results |
assessment process involves judgement regarding the |
obtained by the various segments with those projected in the |
future profitability and the likelihood of the realization of |
previous year. We further obtained evidence of the approval of the |
these assets, in particular whether there will be taxable |
budgeted results included in the current year''s projections and the |
profits in future periods that support the recognition of these assets. This requires assumptions regarding |
future cash flow projections. |
future profitability, which is inherently uncertain. |
⢠Tested the computation of MAT credits recognized as deferred tax assets. |
We have determined that there are no other key audit matters to communicate in our report.
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR''S REPORT THEREON
The Companyâs 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 financial statements and our auditorâs report thereon.
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 and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE IND AS FINANCIAL STATEMENTS
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of 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 equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance
of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are also responsible for overseeing the Companyâs financial reporting process.
AUDITOR''S 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 auditorâs 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.
(e) On the basis of the written representations received from the directors as on March 31, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) The matter described in Qualified opinion paragraph in "Annexure 2â to this report, in our opinion, may have an adverse effect on the functioning of the Company;
(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company
with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2â to this report;
(h) In our opinion, the managerial remuneration for the year ended March 31, 2021 has been paid/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(i) 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, as amended
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 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 with reference to 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 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 auditor''s report to the related disclosures in the 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 auditor''s 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.
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 Ind AS financial statements for the financial year ended March 31, 2021 and are therefore the key audit matters. We describe these matters in our auditor''s 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.
We did not audit the financial statements and other financial information, in respect of an unincorporated joint venture not operated by the Company, whose Ind AS financial statements include total assets of ''115 crore as at March 31, 2021. The Ind AS financial statements and other financial information of the said unincorporated joint venture not operated by the Company have not been audited and such unaudited financial statements and other unaudited financial information have been furnished to us by the management and our report on the Ind AS financial statements of the Company, in so far as it relates to the amounts and disclosures included in respect of the said unincorporated joint venture, is based solely on such unaudited information furnished to us by the management. In our opinion and according to the information and explanations given to us by the Management, these financial statements and other financial information ofjoint venture, is not material to the Company. Our opinion is not modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Orderâ), issued by the Central Government
of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1â a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 accounts as required by law have been kept by the Company so far as it appears from our examination of those books
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement
of Changes in Equity dealt with by this Report are in agreement with the books of account
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, 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 3(c)(A)(viii), 36(D), 42 to the standalone Ind AS financial statements;
ii. The Company did not have any material foreseeable losses in long-term contracts including derivative contracts during the year ended March 31, 2021;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
Partner
Place: Mumbai Membership Number: 41870
Date: 13 May 2021 UDIN: 21041870AAAAAP3965
Mar 31, 2019
REPORT ON THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS
OPINION
We have audited the accompanying standalone Ind AS financial statements of Vedanta Limited ("the Companyâ), which comprise the Balance sheet as at March 31, 2019, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
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 Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, its profit including other comprehensive income, its cash flows and the changes in equity 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 (SAs), as specified under section 143(10) of the Act.
Our responsibilities under those Standards are further described in the Auditor''s 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 together with the ethical requirements that are relevant to our audit of the 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 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.
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 for the financial year ended March 31, 2019. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Recoverability of carrying value of property plant and equipment, capital work in progress, exploration intangible assets under |
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development and investments being carried at cost (as described in note 3c(A)(ii), 3c(A)(iii), 3c(A)(x), 5, 6A and 31 of the standalone |
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Ind AS financial statements) |
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As at March 31, 2019, the carrying value of property, plant and |
Our audit procedures included the following:- |
equipment, capital work in progress, exploration intangible assets under development and investment being carried at cost was Rs. 120,941 Crore. We focused our efforts on the Cash Generating Units ("CGUsâ) of (a) Tuticorin within the copper segment; and (b) |
- Critically assessed through an analysis of internal and external factors impacting the Company, whether there were any indicators of impairment (or reversal of impairment) in line with Ind AS 36. |
Krishna Godavri basin within the oil and gas segment; as they had |
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impairment and/or impairment reversal indicators. |
- Specifically in relation to the CGUs where impairment and |
Recoverability of property plant and equipment, capital work in |
impairment reversal indicators were identified, obtained |
progress, exploration intangible assets and investment being carried |
and evaluated the valuation models used to determine the |
at cost has been identified as a key audit matter due to : |
recoverable amount by challenging the key assumptions used by |
- The significance of the carrying value of assets being assessed. |
the management including: |
- The size of impairment charges and reversals in earlier years. |
- Considering forecasted volumes in relation to asset development plans. |
- The fact that the assessment of the recoverable amount of |
- Critically assessing management''s forecasting accuracy by |
the Company''s CGUs and investments involves significant |
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judgements about the future cash flow forecasts and the discount |
comparing prior year forecasts to actual results and assessing |
rate that is applied. |
the potential impact of any variances. |
- The withdrawal of the Company''s licenses to operate in current |
- Corroborating the price assumptions used in the models |
year in one of the jurisdictions'' and consequential litigation. |
against analyst consensus. - Testing the appropriateness of the weighted average cost of capital used to discount the impairment models through engaging our internal valuations experts. - Testing the integrity of the models together with their clerical accuracy. |
Key audit matters |
How our audit addressed the key audit matter |
The key judgements and estimates centered on the likely outcome of the litigations, cash flow forecasts, prices and discount rate assumptions. An impairment reversal of Rs. 313 Crore was recorded in the oil and gas segment during the year (refer note 31). |
Additionally, wherever impairment trigger arose due to withdrawal of Company''s license to operate, we inspected the external legal opinions in respect of the merits of the case and critically assessed management''s position through discussions with the legal counsel to determine the basis of their conclusion. - Assessed the competence and objectivity of the Company''s external experts, to satisfy ourselves that these parties are appropriate in their roles within the estimation process. - Assessed the adequacy of the disclosures made by the Company in this regard. |
Revenue recognition (as described in note 3a(A), 3c(A)(xi), 3c(B)(ii) and 26 of the standalone Ind AS financial statements) |
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For the year ended March 31, 2019 the Company has recognized revenue from operations of Rs. 38,098 Crore. Revenue recognition has been recognized as a key audit matter due to diverse and complex revenue streams across the Company. We have identified following key areas for consideration: - Complexity associated with the calculation of profit petroleum within the Oil & Gas segment. - Complex calculation of power tariff agreements with Grid Corporation of Odisha Limited (GRIDCO). - Cut-off: The variety of terms in the copper, iron ore and aluminum segments that define when control is transferred to the customer, as well as the high value of the transactions, give rise to the risk that revenue is not recognized in the correct period. |
Our audit procedures included the following:- - Our audit procedures included considering the appropriateness of the Company''s revenue recognition accounting policies and assessing compliance with the policies in terms of Ind AS 115. - Performed walkthroughs and test of controls, assisted by IT specialists, of the revenue recognition processes and assessed the design and operating effectiveness of key controls. - Inspected the terms of production sharing contracts in the Oil & Gas segment and tested the underlying cost recovery and profit petroleum calculations used by the management. Also, inspected external legal opinions (where considered necessary) to evaluate the merits of the claims made by the Company in computing government''s share of revenue. We also assessed the adequacy of disclosures made by the Company relating to calculation of profit petroleum within the Oil & Gas segment. - Inspected the terms of the power purchase agreement to assess the reasonability of the inputs used in the calculation of the power tariff in respect of the revenue recognized for GRIDCO. Other procedures relating to the revenue of the Power division are mentioned in the recoverability of disputed receivables section. - Selected a sample of sales, in the copper, iron ore and aluminum segments, made pre and post year end, agreeing the date of revenue recognition to third party support, such as bills of lading, to confirm sales are recognized according to contract conditions. - Examined invoice samples with various shipping terms to ensure that revenue has been recognized appropriately. |
Recoverability of disputed receivables (as described in note 3c(B)(i) and note 7 of the standalone Ind AS financial statements) |
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- As of March 31, 2019 the value of disputed receivables in the power segment aggregated to Rs. 1,248 Crore. - Due to disagreements over the quantification or timing of the receivable, the recovery of said receivables are subject to increased risk. Some of these balances are also subject to litigation. The risk is specifically related to receivables from GRIDCO. These receivables include long outstanding balances as well and are also subject to counter party credit risk. |
Our audit procedures included the following:- - Examined the underlying power purchase agreements. - Inspected the relevant state regulatory commission, appellate tribunal and court rulings. - Inspected external legal opinions in respect of the merits of the case and critically assessed management''s position through discussions with the management''s in-house legal team to determine the basis of their conclusion. |
- Accordingly, the same has been considered as a key audit matter. |
- Examined management''s assessment of recoverability of receivables. - Assessed the adequacy of the disclosures made by the Company in this regard. |
Key audit matters |
How our audit addressed the key audit matter |
Claims and exposures relating to taxation and litigation (as described in note 3c(B)(ii) and 35 of the standalone Ind AS financial statements) |
|
- The Company is subject to a large number of legal and tax related claims which have been disclosed / provided for in the financial statements based on the facts and circumstances of each case. - Taxation and litigation exposures have been identified as a key audit matter due to the complexities involved in these matters, timescales involved for resolution and the potential financial impact of these on the financial statements. Further, significant management judgement is involved in assessing the exposure of each case and thus a risk that such cases may not be adequately provided for or disclosed. |
Our audit procedures included the following:- - Gained an understanding of the process of identification of claims, litigations and contingent liabilities and identified key controls in the process. For selected controls we have performed tests of controls. - Obtained the summary of Company''s legal and tax cases and critically assessed management''s position through discussions with the Legal Counsel, Head of Tax and operational management, on both the probability of success in significant cases, and the magnitude of any potential loss. - Inspected external legal opinions (where considered necessary) and other evidence to corroborate management''s assessment of the risk profile in respect of legal claims. - Engaged tax specialists to technically appraise the tax positions taken by management with respect to local tax issues. - Assessed whether management assessment of similar cases is consistent across the divisions or that differences in positions are adequately justified. - Assessed the relevant disclosures made within the financial statements to address whether they appropriately reflect the facts and circumstances of the respective tax and legal exposures and the requirements of relevant accounting standards. |
Recoverability of unutilized Minimum Alternate Tax (MAT) credits included under deferred tax assets (as described in note 3c(A)(ix) and 32 of the standalone Ind AS financial statements) |
|
- As of March 31, 2019, the Company has recognized MAT credits of Rs. 3,971 Crore, included under deferred tax assets that can be utilized against future tax liabilities. - The analysis of the recoverability of such deferred tax assets has been identified as a key audit matter because the assessment process involves judgement regarding the future profitability and the likelihood of the realization of these assets, in particular whether there will be taxable profits in future periods that support the recognition of these assets. This requires assumptions regarding future profitability, which is inherently uncertain. Accordingly, the same is considered as a key audit matter. |
Our audit procedures included the following:- - Obtained and analysed the future projections estimated by management, assessing the key assumptions used, including the analysis of the consistency of the actual results obtained by the various segments with those projected in the previous year. We further obtained evidence of the approval of the budgeted results included in the current year''s projections, and the reasonableness of the future cash flow projections and the consistency of those projections with those used in other areas of estimation such as those used for assessing the recoverability of assets. |
- Of the above MAT credits, we focused our effort on MAT assets of Rs. 1,161 Crore which are expected to be utilized during the last two years of the stipulated fifteen year carry forward period from the year in which, the same arose. |
- Tested the completeness and accuracy of the MAT credits recognized as deferred tax assets. |
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR''S REPORT THEREON
The Company''s 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 auditor''s report thereon.
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 financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE IND AS 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 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 equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are also responsible for overseeing the Company''s financial reporting process.
AUDITOR''S 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 auditor''s 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.
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 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 auditor''s report to the related disclosures in the 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 auditor''s 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.
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 Ind AS financial statements for the financial year ended March 31, 2019 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
OTHER MATTER
We did not audit the financial statements and other financial information, in respect of 1 unincorporated joint venture not operated by the Company, whose Ind AS financial statements include total assets of Rs. 109 Crore as at March 31, 2019. The unauadited financial information of the said unincorporated joint venture not operated by the Company has been furnished to us by the management of the Company. Our opinion on the standalone Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of this unincorporated joint venture, is based solely on such unaudited information furnished to us by the management. Our opinion is not modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1â a statement on the matters specified in paragraphs 3 and 4 of the Order.
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;
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(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, 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 35 to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure 1 referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date
Re: Vedanta Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in fixed assets are held in the name of the Company except for the title deeds of immovable properties in oil and gas blocks, jointly owned with other joint venture partners, which are held in the name of the licensee of the block.
The written down value of such immovable properties in the accompanying financial statement aggregates to Rs. 63.80 Crore.
(ii) The management has conducted physical verification of inventories at reasonable intervals during the year except for inventories aggregating of Rs. 586 Crore lying at Tuticorin plant which is under suspension (refer note 3c(A)(x)). No material discrepancies were noticed on physical verification of inventories, wherever such verifications were carried out. Inventories lying with third parties have been confirmed by them as at March 31, 2019 and no material discrepancies were noticed in respect of such confirmations.
(iii) (a) The Company has granted loans to 6 companies covered in the register maintained under section 189 of the Act. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the Company''s interest.
(b) The Company has granted loans that are either re-payable on demand or have a schedule for repayment of interest and principal, to companies covered in the register maintained under section 189 of the Act. We are informed that (a) repayment of loan was received as and when the demands were raised, during the year; and (b) loans which had a schedule for repayment were not due during the current year; and thus, there has been no default on the part of the parties to whom the monies have been lent. The payment of interest has been regular in all cases.
(c) There is no amounts of loans granted to companies listed in the register maintained under section 189 of the Act which are overdue for more than ninety days.
(iv) In our opinion and according to the information and explanations given to us, provisions of sections 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and guarantees given have been complied with by the Company. The Company has not granted any security in terms of sections 185 and 186 of the Act.
(v) In our opinion and according to information and explanations given to us, the Company has not accepted any deposit from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended).
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act, related to the manufacture of goods and generation of electricity, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of custom, value added tax, goods and service tax, cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, service tax, sales-tax, duty of custom, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, customs duty, excise duty and value added tax on account of any dispute, are as follows:
Amount |
Period to which |
Forum where the dispute |
||
Name of the statute |
Nature of the dues |
(Rs. In Crore) |
the amount relates |
is pending |
Central Excise Act, 1944 |
Excise Duty |
0.40 |
November 07 to July 08 |
Additional Commissioner |
Central Excise Act, 1944 |
Excise Duty |
0.42 |
2011-12 to 2015-16 |
Assistant Commissioner |
Central Excise Act, 1944 |
Oil Cess and NCCD demand |
53.49 |
2003-04 and December 2013 to February 2015 |
CESTAT/ Supreme Court |
Central Excise Act, 1944 |
Excise Duty |
179.02 |
1997-98 to 2015-16 |
CESTAT |
Central Excise Act, 1944 |
Excise Duty |
16.70 |
1997-2010 |
Commissioner |
Central Excise Act, 1944 |
Excise Duty |
0.72 |
2015-17 |
Commissioner Appeals |
Central Excise Act, 1944 |
Excise Duty |
98.29 |
2000-2006 and 2017-18 |
High Court |
Central Sales Tax 1956 |
Sales Tax |
11.09 |
2004-05 to 2014-15 |
Additional Commissioner |
Central Sales Tax 1956 |
Sales Tax |
19.25 |
1998-99 to 2016-17 |
High Court |
Name of the statute |
Nature of the dues |
Amount (Rs. In Crore) |
Period to which the amount relates |
Forum where the dispute is pending |
Customs Act,1962 |
Custom Duty |
47.95 |
2011-14 to 2013-14 |
CESTAT |
Customs Act,1962 |
Custom Duty |
31.16 |
2004-05 to 2009-10 and 2012-13 to 2016-17 |
Commissioner |
Customs Act,1962 |
Custom Duty |
8.27 |
2007-14 and 2012-13 |
Commissioner, Appeals |
Customs Act,1962 |
Customs Duty |
7.99 |
2012-13 |
Deputy Commissioner |
Customs Act,1962 |
Custom Duty |
12.26 |
2005-06 to 2006-07 |
High Court |
Customs Act,1962 |
Custom Duty |
0.18 |
1996-97, 2005-10 |
Supreme Court |
Finance Act,1994 |
Service Tax |
0.01 |
2011-12 to 2015-16 |
Assistant Commissioner |
Finance Act,1994 |
Service Tax |
213.49 |
2002-03 to 2014-15 |
CESTAT |
Finance Act,1994 |
Service Tax |
0.13 |
2007-13 |
Commissioner |
Finance Act,1994 |
Service Tax |
3.35 |
2009-10 to 2017-18 |
Commissioner Appeals |
Finance Act,1994 |
Service Tax |
24.32 |
2006-07, 2007-08, 2016-17 & 2017-18 |
High Court |
Sales Tax |
Sales Tax |
11.49 |
2014-15 and 2018-19 |
Additional Commissioner |
Sales Tax |
Sales Tax |
47.40 |
2007-08 |
Commissioner |
Sales Tax |
Sales Tax |
0.08 |
2012 to 2015 |
Deputy Commissioner/ Tribunal |
Sales Tax |
Sales Tax |
322.00 |
2008-09 to 2010-11, 2012-13 , 2013-14, 2014-15, 2015-16 and 2016-17 |
High Court |
Sales Tax |
Sales Tax |
0.12 |
2014-15 and 2015-16 |
Joint Commissioner |
Sales Tax |
Sales Tax |
1.40 |
2008-12 |
Tribunal |
Income Tax Act,1961 |
Income tax |
554.30 |
2005-06, 2008-09 to 2013-14 |
Commissioner of Income Tax (Appeals) |
Income Tax Act,1961 |
Income tax |
1,575.62 |
2007-08 to 2013-14 |
High Court |
Income Tax Act,1961 |
Income tax |
875.14 |
2002-03, 2004-05, 2005-06, 2006-07, 2007-08, 2008-09, 2011-12 |
Income Tax Appellate Tribunal |
Income Tax Act,1961 |
Income tax |
30.35 |
1999-00, 2008-09, 2009-10 |
Not applicable as application filed for rectification |
Income Tax Act,1961 |
Witholding Tax demand |
18,774.81 |
2006-07 |
Income Tax Appellate Tribunal |
* Net of amounts paid under protest/ adjusted against refunds.
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to bank or government or dues to debenture holders. The Company did not have any outstanding dues to financial institutions.
(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of debt instruments in the nature of debentures and term loans for the purposes for which they were raised. According to the information and explanations given to us, the Company has not raised monies by way of initial public offer or further public offer.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) of the Order are not applicable to the Company and hence not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with them as referred to in section 192 of the Act.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure 2 referred to in para 2(f) under the heading "Report on Other Legal and Regulatory Requirements" to the independent Auditor''s Report of even date on the Standalone Ind AS Financial Statements of Vedanta Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Vedanta Limited ("the Companyâ) as of March 31, 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
MANAGEMENT''S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated under the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) ("COSO 2013â),. 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 the Company''s 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 Companies Act, 2013.
AUDITOR''S RESPONSIBILITY
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these standalone financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these standalone financial statements and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, 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 auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these standalone financial statements.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING WITH REFERENCE TO THESE FINANCIAL STATEMENTS
A company''s internal financial control over financial reporting with reference to these standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting with reference to these standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING WITH REFERENCE TO THESE STANDALONE FINANCIAL STATEMENTS
Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone 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 over financial reporting with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone 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, adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in COSO 2013.
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Raj Agrawal
Place: Mumbai Partner
Date: May 07, 2019 Membership Number: 82028
Mar 31, 2018
Independent Auditorâs Report
To the Members of Vedanta Limited Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Vedanta Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act., read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement(s), whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these 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 of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditorâs 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 Companyâs 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 accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 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, of the state of affairs of the Company as at March 31, 2018, its profits including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 purpose 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 Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164 (2) of the Act;
(f) 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 âAnnexure 2â to this report;
(g) With respect to the other matters to be included in the Auditorâs 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 - Refer Note 49 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in fixed assets are held in the name of the Company except for the title deeds of immovable properties in oil and gas blocks, jointly owned with other joint venture partners, which are held in the name of the licensee of the block. The written down value of such immovable properties in the accompanying financial statement aggregates to 96.47 Crore.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted loans to companies covered in the
register maintained under section 189 of the Act. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the Companyâs interest.
(b) The Company has granted loans that are either re-payable on demand or have a schedule for repayment of interest and principal, to companies covered in the register maintained under section 189 of the Act. We are informed that (a) repayment of loan was received as and when the demands were raised, during the year; and (b) loans which had a schedule for repayment were not due during the current year; and thus, there has been no default on the part of the parties to whom the monies have been lent. The payment of interest has been regular in all cases.
(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, customs duty, excise duty and value added tax on account of any dispute, are as follows:
Amount |
Forum where the dispute is |
||
Name of the Statute |
Nature of the dues |
(in Crore) * Period to which amount relates |
pending |
Income tax Act, 1961 |
Income tax |
637.5 AY 2006-07 and AY 2008-09 to AY 2013-14 1,126.55 A.Y. 2007-08 to 2011-12 833.73 AY2002-03, 2004-10, and 2012-13 |
Commissioner of Income Tax (Appeals) High Court Income Tax Appellate Tribunal |
Withholding Tax demand |
19,385.73 AY 2006-07 |
Income Tax Appellate Tribunal |
|
Income Tax |
30.35 AY 1999-00, 2008-09 and 2009-10 |
Not applicable as application filed for rectification |
|
Finance Act, 1994 |
Service tax demand |
24.31 2006-07, 2007-08, 2016-17 and 2017-18 2.69 2009-17 200.28 2002-16 0.51 2007-16 |
High Court Commissioner (Appeals) Custom, Excise and Service tax appellate tribunal Commissioner of Excise |
(c) There is no amounts of loans granted to companies listed in the register maintained under section 189 of the Act which are overdue for more than ninety days.
(iv) In our opinion and according to the information and explanations given to us, provisions of sections 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and guarantees given have been complied with by the Company. The Company has not granted any security in terms of sections 185 and 186 of the Act.
(v) According to information and explanations given to us, the Company has not accepted any deposit from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of sections 73 to 76 of the Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act, related to the manufacture of goods and generation of electricity, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to bank or government or dues to debenture holders. The Company did not have any outstanding dues to financial institutions.
Amount |
Forum where the dispute is |
|||
Name of the Statute |
Nature of the dues |
(in Crore) * |
Period to which amount relates |
pending |
Central Excise Act, 1944 |
Excise duty |
300.63 |
1997-13 and 2014-15 |
Custom, Excise and Service tax appellate tribunal |
8.15 |
1997-2016 |
Commissioner of central excise |
||
4.53 |
2000-06 |
High Court |
||
0.43 |
2009-15 |
Commissioner Appeals |
||
Oil Cess and NCCD |
0.21 |
2002-03 and 2007-08 |
Custom, Excise and Service |
|
Demand |
tax appellate tribunal |
|||
Education cess and |
53.45 |
2013-2015 |
Custom, Excise and Service |
|
secondary higher education |
tax appellate tribunal |
|||
cess on oil cess demand |
||||
Custom Act, 1962 |
Custom duty |
63.38 |
2004-05 to 2013-14 |
Custom, Excise and Service tax appellate tribunal |
6.97 |
2007-14 |
Commissioner appeals |
||
0.18 |
1996-97 and 2005-10 |
Supreme Court |
||
26.49 |
2005-06 to 2006-07 |
High Court |
||
19.72 |
2004-05 to 2019-10 and 2012-13 to 2016-17 |
Commissioner |
||
Central Sales Tax, 1956 |
Sales tax |
21.26 |
1998-99 to 2014-15 and 2016-17 |
High Court |
11.08 |
2004-06 |
Additional Commissioner Sales Tax |
||
1.40 |
2008-12 |
Value Added Tax Tribunal |
||
Odisha Value Added Tax |
Value added tax |
5.64 |
2014-15 |
Additional commissioner of |
2004 |
commercial taxes |
|||
Andhra Pradesh VAT Act, |
Value added tax |
0.08 |
2012-15 |
Deputy Commissioner |
2005 |
Appeals |
|||
Tamil Nadu VAT Act, 2006 |
Value added tax |
10.98 |
2008-09 to 2010-11 |
High Court |
47.40 |
2007-08 |
Commissioner |
* Net of amounts paid under protest/ adjusted against refunds.
(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of debt instruments in the nature of debentures and term loans for the purposes for which they were raised. The Company has not raised moneys by way of initial public offer or further public offer.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) of the Order are not applicable to the Company and hence not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with them as referred to in section 192 of the Act.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
We have audited the internal financial controls over financial reporting of Vedanta Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established under the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (âCOSO 2013 criteriaâ), which considers the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. 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 the Companyâs 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting in COSO 2013 criteria, considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For S.R. Batliboi & Co. LLP
Chartered Accountants ICAI
Firm Registration Number: 301003E/ E300005
per Raj Agrawal
Place: Gurugram Partner
Date: May 03, 2018 Membership Number: 82028
Mar 31, 2017
We have audited the accompanying standalone Ind AS financial statements of Vedanta Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profits (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. While conducting 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 of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs 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 Companyâs 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 accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 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, of the state of affairs of the Company as at March 31, 2017, its profits including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 purpose 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 Balance Sheet, Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of section 164 (2) of the Act;
(f) 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 âAnnexure 2â to this report;
(g) With respect to the other matters to be included in the Auditorâs 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 - Refer Note 51 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in Note 43 to these standalone Ind AS financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management.
Other Matter
The comparative financial information of the Company as at and for the year ended March 31, 2016 and the transition date opening balance sheet as at April 1, 2015 prepared in accordance with Ind AS, included in these standalone Ind AS financial statements, prior to giving effect to the adjustments described in Notes 4 and 55 to these standalone Ind AS financial statements relating to the retroactive accounting for the merger of the Companyâs subsidiary, Cairn India Limited, into the Company, has been audited by the predecessor auditor whose report dated May 15, 2017 expressed an unmodified opinion.
We have audited the adjustments to reflect the effects of the merger described in Notes 4 and 55 to restate the financial information as at April 1, 2015 and as at and for the year ended March 31, 2016. In our opinion, such adjustments are appropriate and have been properly applied. We further state that we were not engaged to audit, review or apply any procedures to the standalone financial information of the Company either as at April 1, 2015 or as at and for the year ended March 31, 2016 other than with respect to the aforesaid adjustments and, accordingly, we do not express an opinion or review conclusion or any other form of assurance on the financial information as at April 1, 2015, as at March 31, 2016 and for the year ended March 31, 2016 as a whole.
ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING âREPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSâ OF OUR REPORT OF EVEN DATE
Re: Vedanta Limited (âthe Companyâ)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in fixed assets are held in the name of the Company except for the title deeds of immovable properties in oil and gas blocks, jointly owned with other joint venture partners, which are held in the name of the licensee of the block. The written down value of such immovable properties in the accompanying financial statement aggregates to Rs.126.53 Crore
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted loans to companies covered in the register maintained under section 189 of the Act. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the Companyâs interest.
(b) The Company has granted loans that are either re-payable on demand or have a schedule for repayment of interest and principal, to companies covered in the register maintained under section 189 of the Act. We are informed that (a) repayment of loan was received as and when the demands were raised, during the year; and (b) loans which had a schedule for repayment were not due during the current year; and thus, there has been no default on the part of the parties to whom the monies have been lent. The payment of interest has been regular in all cases.
(c) There is no amounts of loans granted to companies listed in the register maintained under section 189 of the Act which are overdue for more than ninety days.
(iv) I n our opinion and according to the information and explanations given to us, provisions of sections 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and guarantees given have been complied with by the Company. The Company has not granted any security in terms of sections 185 and 186 of the Act.
(v) According to information and explanations given to us, the Company has not accepted any deposit from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of sections 73 to 76 of the Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act, related to the manufacture of goods and generation of electricity, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company has been generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, customs duty, excise duty, value added tax, cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, customs duty, excise duty and value added tax on account of any dispute, are as follows:
Name of the Statute |
Nature of the dues |
Amount (in Rs. Crore) * |
Period to which amount relates |
Forum where the dispute is pending |
|
Income tax Act, 1961 |
Income tax |
1,024.61 |
A.Y. 2007-08 to 2011-12 |
High Court |
|
928.05 |
Ay. 2002-03 and 2004-12 |
Income Tax Appellate Tribunal |
|
||
587.02 |
AY 1999-00, 2006-07 and 200809 to 2013-14 |
Commissioner of Income tax (Appeals) |
|
||
Withholding tax demand |
20,494.73 |
AY 2006-07 |
Commissioner of Income Tax (Appeals) |
|
|
Finance Act, 1994 |
Service Tax demand |
124.26 |
2002-15 |
Central Excise Service Tax Appellate Tribunal |
|
2.36 22.04 0.06 17.77 4.53 135.18 0.86 19.38 |
2008-09 and 2010-11 2007-14 2010-11 2006-08and 2016-17 2000-06 1997-2012 and 2013-14 2002-03 and 2006-07 1997-2012 and 2013-14 |
Commissioner (Appeals) Commissioner of Central Excise Joint Commissioner High Court High Court Commissioner of Central Excise Commissioner (Appeals) Commissioner of Central Excise |
|||
Central Excise Act, 1944 |
Excise duty |
|
|||
Oil Cess and NCCD Demand |
0.21 |
2002-03 and 2006-07 |
Custom Excise Service Tax Appellate Tribunal |
|
|
Education cess and secondary higher education cess on Oil cess demand |
53.45 |
December 2013 to February 2015 |
Central Excise and Service Tax Appellate Tribunal |
|
|
Custom Act, 1962 |
Custom Duty |
31.97 |
2004-14 |
Commissioner (Appeals) |
|
26.49 |
2005-07 |
High Court |
|
||
0.18 |
1996-97 and 2005-10 |
Supreme Court |
|
||
73.94 |
2004-14 |
Custom Excise Service Tax Appellate Tribunal |
|
||
Central Sales Tax, 1956 |
Sales Tax |
3.73 |
2004-06, 2009-10 and 2012-14 |
Additional commissioner of sales tax |
|
15.94 |
1998-2015 |
High Court |
|
||
14.50 |
2010-11 |
Joint Commissioner |
|
||
1.40 |
2008-12 |
Value Added Tax Tribunal |
|
||
Odisha Value Added Tax 2004 |
Value added tax |
264.16 |
2012-16 |
High Court |
|
Andhra Pradesh VAT Act, 2005 |
Value added tax |
0.08 |
2012-15 |
Deputy Commissioner |
|
Gujarat VAT Act, 2003 |
Value added tax |
4.53 |
2015-16 |
Joint Commissioner (Appeals) |
|
Karnataka VAT Act 2003 |
Value added tax |
61.71 |
2010-12 |
High Court |
|
Tamil Nadu VAT Act, 2006 |
Value added tax |
119.31 |
2007-11 |
High Court |
|
* Net of amounts paid under protest/ adjusted against refunds.
(viii) I n our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to bank or government or dues to debenture holders. The Company did not have any outstanding dues to financial institutions.
(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of debt instruments in the nature of debentures and term loans for the purposes for which they were raised. The Company has not raised monies by way of initial public offer or further public offer.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with them as referred to in section 192 of the Act.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Raj Agrawal
Place: Mumbai Partner
Date: May 15, 2017 Membership Number: 82028
Mar 31, 2015
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of
VEDANTA LIMITED (Formerly known as Sesa Sterlite Limited / Sesa Goa
Limited) ("the Company"), which comprise the Balance Sheet as at March
31,2015, the Statement of Profit and Loss, the Cash Flow Statement For
the year then ended, and a summary of the significant accounting
policies and other explanatory information.
Management''s Responsibility For the Standalone Financial Statements
The Company''s 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 financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone
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
thereunder.
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 financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the 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 financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. 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 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
financial statements.
Opinion
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 Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31,2015, and its profit and its cash flows for the year ended
on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2015 ("the
Order") 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
statement on the matters specified in paragraphs 3 and 4 of the 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.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on March 31,2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31,2015
from being appointed as a director in terms of Section 164(2) of the
Act.
(f) 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 financial statements - Refer Notes 47A(a),
(c), (d); 47C; 47D and 47E to the financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. There has been no delay in transferring amounts required to be
transferred to the Investor Education and Protection Fund by the
Company, other than Rs. 0.38 Crore which is held in abeyance due to
pending legal case.
Annexure to the Independent Auditors'' Report
(Referred to in paragraph 1 under ''Report on Other Legal and
Regulatory Requirements'' section of our report of even date)
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) The Company has a programme of physical verification of all its
fixed assets in a phased manner over a period of three years which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. In accordance with such a programme, certain
fixed assets were physically verified by the management during the
year. According to the information and explanation given to us,
no material discrepancies were noticed on such verification.
(ii) In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the Register maintained
under Section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory and fixed assets and the sale of goods and services.
During the course of our audit, we have not observed any major weakness
in such internal control system.
(v) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
In respect of unclaimed deposits, the Company has complied with the
provisions of Sections 73 to 76 or any other relevant provisions of the
Companies Act, 2013 and the rules framed there under.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended, prescribed by the Central Government under sub-section (1)
of Section 148 of the Companies Act, 2013, and are of the opinion that,
prima facie, the prescribed cost records have been made and maintained.
We have, however, not made a detailed examination of the cost records
with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including provident fund, employees'' state insurance,
income-tax, sales tax, wealth tax, service tax, customs duty, excise
duty, value added tax, cess and any other statutory dues with the
appropriate authorities.
(b) There were no undisputed amounts payable in respect of provident
fund, employees'' state insurance, income-tax, sales tax, wealth tax,
service tax, customs duty, excise duty, value added tax, cess and other
material statutory dues in arrears as at March 31,2015 for a period of
more than six months from the date they became payable.
(c) Details of dues of income-tax, sales tax, wealth tax, service tax,
customs duty, excise duty, value added tax and cess which have not been
deposited as on March 31,2015 on account of disputes are given below:
(Rs. in Crore)
Forum where Period to which
Name or the Nature of dispute amount relates Amount
Statute the dues is pending involved
Income Tax Act, Income tax High Court Assessment year 178.13
1961 2009-10
Income Tax Assessment years 458.74
Appellate 2002-03 to
Tribunal 2005-06 and
2010-11
Commissioner Assessment years 713.92
of Income 1990-91 to
Tax 2009-10 and 2005-
(Appeals) 06 to 2011-12
Deputy Assessment Year 2.67
Commissioner 2010-11
Assessing Assessment year 10.27
Officer 2008-09
Finance Act, Service tax Customs 2004-05 to
1994 Excise & 2012-13 91.89
Service
tax Appellate
Tribunal
Commissioner 2008-09 to 2010-11 2.35
of Central
Excise
(Appeals)
Commissioner 2007-08 to 2011-12 25.94
of Central
Excise
High Court 2006-07 to 2008-09 2.66
Central Excise Excise duty High Court 2000-01 10.78
Act, 1944
Customs
Excise &
Service 1997-98 to 2011 77.9
Tax -12
Appellate
Tribunal
Commissioner 1996-97 to 2008 26.6
of Central -09 and 2012-13
Excise
Customs Act, Customs duty Supreme 1996-97 0.1
1962 Court
High Court 2005-06 to 2006 12.3
-07
Customs
Excise &
Service 2004-05 to 2013 42.24
Tax -14
Appellate
Tribunal
Commissioner
of Central 2004-05 to 2013 3.9
-14
Excise
(Appeals)
Central Sales
Tax Act , 1956 Sales tax High Court 1998-99 to 2000 2.09
-01
Additional
Commissioner 2003-04 to 2005 1.93
of Sales Tax -06
Tamil Nadu
Value Added Value added
Tax Act, 2006 tax High Court 2006-07 to 2008 7.00
-09
Tamil Nadu Generation
Tax and tax High Court 2003-04 to 2008 10.22
Consumption -09
or sale tax
Electricity
Act,2003
The Orissa
Value Added Value added
Tax Act, tax High Court 2012-13 to 2014 128.2
2004 -15
Building and Building Supreme
Other cess Court 2008-09 to 2010 10.2
Construction -11
Workers'' (RECS)
Act, 1996 and
Building and Other
Construction
Workers'' Welfare
Cess Act, 1996
There are no dues of wealth tax which have not been deposited as on
March 31,2015 on account of disputes.
(d) The amounts required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made thereunder has been
transferred to such fund within time, other than Rs. 0.38 Crore which
is held in abeyance due to pending legal case.
(viii) The Company does not have accumulated losses at the end of the
financial year and the Company has not incurred cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
financial institutions, banks and debenture holders.
(x) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by others from banks and financial institutions
are not, prima facie, prejudicial to the interests of the Company.
(xi) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained, other than
temporary deployment pending application.
(xii) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm Registration No. 117366W / W-100018)
Jitendra Agarwal
Place : Mumbai Partner
Date : April 29, 2015 Membership No. 87104
Mar 31, 2013
We have audited the accompanying financial statements of SESA GOA
LIMITED (the ''Company''), which comprise the Balance Sheet as at
March 31, 2013, the Statement of Profit and Loss, and the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in Section 211(3C)
of the Companies Act, 1956 (''the Act'') and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
AUDITORS'' RESPONSIBILITY
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with the
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUiREMENTS
1. As required by the Companies (Auditor''s Report) Order, 2003 (''the
Order'') issued by the Central Government in terms of Section 227(4A)
of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have 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 Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
referred to in Section 211(3C) of the Act.
(e) On the basis of the written representations received from the
directors as on March 31, 2013 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2013
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
Annexure to the Independent Auditors'' Report
(Referred to in paragraph 1 under ''Report on Other Legal and
Regulatory Requirements'' section of our report of even date)
(i) In respect of the Company''s fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) In respect of the Company''s inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory and fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
(v) According to the information and explanations given to us, the
Company has not entered into any contract or arrangement with other
parties, which needed to be entered in the Register maintained under
section 301 of the Companies Act, 1956.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year.
In respect of unclaimed deposits, the Company has complied with the
provisions of Sections 58A and 58AA or any other relevant provisions of
the Companies Act, 1956 and the Companies (Acceptance of Deposits)
Rules, 1975. According to the information and explanations given to us,
no order has been passed by the Company Law Board or the National
Company Law Tribunal or the Reserve Bank of India or any Court or any
other Tribunal.
(vii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the management
have been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules,
2011, prescribed by the Central Government under Section 209(1)(d) of
the Companies Act, 1956 and are of the opinion that prima facie, the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(ix) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and other material statutory dues in arrears as at
March 31, 2013 for a period of more than six months from the date they
became payable.
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty and Cess which have not been deposited as on
March 31, 2013 on account of disputes are given below:
Statute Nature of Amount Period to which the
dues (Rs. in
crore) amount relates
Income-tax Act, Income Tax 1,123.36 Assessment Years 2004-05,
1961 2006-07, 2007-08 to 2011-12
Income-tax Act, Income Tax 109.33 Assessment Years 2005-06,
1961 2006-07 and 2009-10
The Central
Excise Excise Duty 7.82 2011-12 to 2012-13
Act, 1944
The Finance Act, Service Tax 2.40 2009-10 to 2011-12
1994
Customs Act, Custom Duty 1.40 Assessment Year 2006-07
1962
Sales Tax Act Sales Tax 0.63 1997- 98 to 2000-01
Customs Act, Custom Duty 0.29 2010-11
1962
Statute Forum where the dispute is pending
Income-Tax Act, 1961 Commissioner of Income Tax (Appeals), Panaji, Goa
Income-Tax Act, 1961 Income Tax Appellate Tribunal, Panaji, Goa
The Central Excise
Act, 1944 Commissioner - Customs, Central Excise and
Service Tax, Panaji, Goa.
The Finance Act, 1994 Superintendent - Central Excise and Service Tax,
Panaji, Goa
Customs Act, 1962 Custom Excise and Service Tax Appellate Tribunal,
Mumbai
Sales Tax Act Additional Commissioner of Sales Tax
Customs Act, 1962 Commissioner of Customs (Appeals),Panaji, Goa
(x) The Company does not have any accumulated losses. The Company has
not incurred cash losses during the current financial year and in the
immediately preceding financial year.
(xi) According to the information and explanations given to us, the
Company has not taken any loan from a bank or financial institution or
borrowed any sum against issue of debentures.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund, nidhi, or a mutual benefit
society.
(xiv) According to the information and explanations given to us, the
Company is not a dealer or trader in shares, securities or debentures
and other investments.
(xv) According to the information and explanations given to us, the
terms and conditions under which the Company has given guarantee for
loans taken by its wholly owned subsidiary from banks are not prima
facie prejudicial to the interests of the Company. The Company has not
given guarantees to any financial institutions.
(xvi) According to the information and explanations given to us, the
Company has not availed any term loans during the year.
(xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet of the
Company, as at March 31, 2013, we report that funds raised on short
term basis amounting to Rs. 2,721.16 crore have, prima facie, been used
during the year for non-current assets.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company has not issued any debentures.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants
(Firm Registration No. 117366W)
Rajesh K Hiranandani
Partner
(Membership No. 36920)
Place: Panaji - Goa
Date: April 27, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of SESA GOA LIMITED
("the Company") as at March 31, 2012, the Statement of Profit and
Loss and the Cash Flow Statement of the Company for year ended on that
date, both annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, issued
by the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, we enclose in the Annexure, a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) we have 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 Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement of the cash flows for the
year ended on that date.
5. On the basis of written representations received from the directors
as on March 31, 2012, and taken on record by the Board of Directors, we
report that none of the Directors is disqualified as on March 31, 2012
from being appointed as a director in terms of section 274(1)(g) of the
Companies Act, 1956.
Annexure to the Auditors' Report
(Referred to in paragraph 3 of our report of even date)
(i) In respect of the Company's fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) In respect of the Company's inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and the discrepancies noticed on physical verification,
having regard to the size of the Company and the nature of its
business, were not material.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to / from companies, firms or other parties listed in the
Register maintained under Section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory and fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
(v) According to the information and explanations given to us, the
Company has not entered into any contract or arrangement with other
parties, which needs to be entered in the Register maintained under
section 301 of the Companies Act, 1956.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year.
In respect of unclaimed deposits, the Company has complied with the
provisions of Sections 58A and 58AA or any other relevant provisions of
the Companies Act, 1956. According to the information and explanations
given to us, no order has been passed by the Company Law Board or the
National Company Law Tribunal or the Reserve Bank of India or any Court
or any other Tribunal.
(vii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the management
have been commensurate with the size of the Company and the nature of
its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1) (d) of the Companies
Act, 1956 in respect of all its products namely, iron ore,
metallurgical coke and pig iron, and are of the opinion that prima
facie the prescribed accounts and records have been made and
maintained. We have, however, not made a detailed examination of the
records with a view to determining whether they are accurate or
complete.
(ix) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Income-tax,
Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and
other material statutory dues in arrears as at March 31, 2012 for a
period of more than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty and Cess which have not been deposited as on
March 31, 2012 on account of disputes are given below:
Statute Nature of
dues Amount Period to
which the Forum where the
(Rs in
crore) amount relates dispute is pending
Income
Tax Act, Income Tax 160.37 Assessment
Years 2004-05, Commissioner of
Income Tax
1961 2007-08,
2008-09 and
2009-10 (Appeals), Panaji
Income
Tax Act, Income Tax 0.29 Assessment
Years 2006-07 Income Tax Appellate
1961 Tribunal, Panaji
Sales Tax
Act Sales Tax 0.63 1997- 98 to
2000-01 Additional
Commissioner of
Sales Tax
Customs
Act, Custom Duty 1.40 Assessment
Year 2006-07 Custom Excise and
Service
1962 Appellate Tribunal,
Mumbai
(x) The Company does not have any accumulated losses. The Company has
not incurred cash losses during the current financial year and in the
immediately preceding financial year.
(xi) According to the information and explanations given to us, the
Company has not taken any term loan from a bank or financial
institution or borrowed any sum against issue of debentures.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund, nidhi, or a mutual benefit
society.
(xiv) According to the information and explanations given to us, the
Company is not a dealer or trader in shares, securities or debentures
and other investments.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xvi) According to the information and explanations given to us, the
Company has not availed any term loans during the year.
(xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet of the
Company as at March 31, 2012, we report that funds raised on short term
basis amounting to Rs 1,925.17 crores have, prima facie, been used
during the year for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company has not issued any debentures.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants
(Registration No. 117366W)
Rajesh K Hiranandani
Place: Panaji - Goa Partner
Date: April 24, 2012 (Membership No. 36920)
Mar 31, 2010
1. We have audited the attached Balance Sheet of SESA GOA LIMITED
(Ãthe CompanyÃ) as at 31st March, 2010, the Profit and Loss Account and
the Cash Flow Statement of the Company for year ended on that date,
both annexed thereto. These financial statements are the responsibility
of the CompanyÃs management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003,
(ÃCAROÃ) issued by the Central Government of India in terms of Section
227 (4A) of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of CARO.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) we have 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 Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said financial statements give the
information required by the Companies Act, 1956 in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
(ii) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on 31st March, 2010; and
(iii) in the case of the Cash Flow Statement of the cash flows for the
year ended on 31st March, 2010.
5. On the basis of written representations received from the directors
as on 31st March, 2010, and taken on record by the Board of Directors,
none of the Directors is disqualified as on 31st March, 2010 from being
appointed as a director in terms of section 274(1)(g) of the Companies
Act, 1956.
Annexure to the Auditorsà Report (Referred to in paragraph 3 of our
report of even date)
(i) Having regard to the nature of the CompanyÃs
business/activities/result, the provisions of clause (xiii) of
paragraph 4 of CARO are not applicable.
(ii) In respect of the CompanyÃs fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) In respect of the CompanyÃs inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iv) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties listed in the
Register maintained under Section 301 of the Companies Act, 1956.
(v) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory and fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
(vi) According to the information and explanations given to us, the
Company has not entered into any contract or arrangement with other
parties, which needs to be entered in the Register maintained under
section 301 of the Companies Act, 1956.
(vii) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
In respect of unclaimed deposits, the Company has complied with the
provisions of Sections 58A & 58AA or any other relevant provisions of
the Companies Act, 1956. According to the information and explanations
given to us, no order has been passed in this respect, in the case of
the Company by the Company Law Board or the National Company Law
Tribunal or the Reserve Bank of India or any Court or any other
Tribunal.
(viii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the management
have been commensurate with the size of the Company and the nature of
its business.
(ix) In our opinion and according to the information and explanations
given to us, the Central Government has not prescribed maintenance of
cost records under Section 209(1)(d) of the Companies Act, 1956 in
respect of the CompanyÃs products.
(x) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Investor Education and Protection Fund,
Employeesà State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Income-tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
dues in arrears as at 31st March, 2010 for a period of more than six
months from the date they became payable
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty and Cess which have not been deposited as on
31st March, 2010 on account of disputes are given below:
Amount
Statute Nature of dues
(Rs. in crore) Period to which
the amount
relates
Income Tax
Act, 1961 Income Tax 5.81 Assessment Year 2006-07
Sales Tax Act Sales Tax 0.63 1997 Ã 98 to 2000-01
Statue Forum where the dispute is pending
Income Tax Act,1961 Commissioner of Income Tax (Appeals), Panaji
Sales Tax Act Additional Commissioner of Sales Tax
(xi) The Company does not have any accumulated losses. The Company has
not incurred cash losses during the current financial year and in the
immediately preceding financial year.
(xii) In our opinion and according to the information and explanations
given to us, the Company has not taken any term loan from a bank or
financial institution or borrowed any sum against issue of debentures.
Therefore, the provisions of paragraph 4(xi) of the Order are not
applicable to the Company.
(xiii) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities. Therefore, the provisions of paragraph 4(xii) of the Order
are not applicable to the Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not a dealer or trader in shares,
securities or debentures and other investments. Therefore, the
provisions of paragraph 4(xiv) of the Order are not applicable to the
Company.
(xv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions.
(xvi) In our opinion and according to the information and explanations
given to us, the Company has not availed any term loans during the
year.
(xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(xviii) In our opinion and according to the information and
explanations given to us, the Company has not made any preferential
allotment of shares to parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) In our opinion and according to the information and explanations
given to us and records examined by us, the Company has not issued any
debentures that were outstanding at any time during the year.
(xx) The Management has disclosed the end use of money raised by public
issues and we have verified the same.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No. 117366W)
Sanjiv V. Pilgaonkar
Partner
(Membership No.39826)
MUMBAI
19th April 2010