To the Members of ACC Limited
Report on the Audit of the Standalone Financial Statements Qualified Opinion
We have audited the accompanying standalone financial statements of ACC Limited ("the Company”), which comprise the Balance sheet as at March 31 2023, 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 fifteen months financial year then ended (Refer Note 56), and notes to the standalone 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, except for the possible effects of the matter described in the 'Basis for Qualified Opinion' section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended ("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, 2023, its profit including other comprehensive income, its cash flows and the changes in equity for the fifteen months financial year ended on that date,
Basis for Qualified Opinion
We refer to Note 58 of the accompanying standalone financial statements, Management has represented to us that the Adani group has performed an internal assessment and obtained opinion from an independent law firm in respect of evaluating relationships with parties having transactions with the Company and referred to in the short seller's report, However, pending the completion of proceedings before the Hon'ble Supreme Court and regulatory investigations, we are unable to comment on the possible consequential effects thereof, if any, on these standalone financial statements,
We conducted our audit of the standalone 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 Financial Statements' section
of our report, We are independent of the Company in accordance with the 'Code of Ethics' issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules 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 qualified audit opinion on the standalone financial statements,
Emphasis of Matter
We draw your attention to Note 40(A)(a) and Note 40(A)(b) of the accompanying standalone financial statements which describes the uncertainty related to the outcome of ongoing litigations with the Competition Commission of India, Our opinion is not modified in respect of these matters,
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the fifteen months financial year ended March 31, 2023, These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters, In addition to the matter described in the 'Basis for Qualified Opinion' section we have determined the matters described below to be the key audit matters to be communicated in our report, For each matter below, our description of how our audit addressed the matter is provided in that context,
We have fulfilled the responsibilities described in the 'Auditor's Responsibilities for the Audit of the Standalone 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 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 financial statements,
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Key audit matters
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How our audit addressed the key audit matter
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Litigation and Claims (as described in Notes 1(K), 1(Y)(I) , 40(A) and 41 of the standalone financial statements)
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The Company has significant ongoing legal proceedings for various complex matters relating to direct tax, indirect tax,
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Our audit procedures included the following:
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government incentive claims and other legal matters under
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• Read the Company's accounting policies with respect
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various laws prevailing in India.
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to contingent liabilities and provisions and assessing its compliance with Ind AS 37 “Provisions, Contingent Liabilities
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Due to the magnitude and complexity involved in these matters, management's judgement regarding recognition
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and Contingent Assets”.
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and measurement of provisions for these legal proceedings
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• Obtained understanding of the Company's process and
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is inherently uncertain and might change over time as the
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controls to identify and monitor all litigations, including
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outcome of the legal cases are determined. Accordingly, it has
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Company's process of assessment of litigations as 'probable',
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been considered as a key audit matter.
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'possible' and 'remote' and reporting to the board of directors / Audit Committee.
• Held discussions with the management including the person responsible for legal and compliance to obtain an understanding of the matters involved and development in these matters compared to previous year. For significant direct and indirect tax matters and government incentive claims, we assessed the management conclusion with the support of specialists.
• For other significant legal matters, assessed management conclusion basis the related documentation / correspondence and opinions from external legal experts (where applicable), as provided by the management.
• Obtained direct legal confirmations for significant matters from external law firms handling such matters to corroborate management conclusions.
• Assessed the objectivity and competence of the external legal experts / law firms as referred above.
• Reviewed the disclosures made by the Company in the standalone financial statements.
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Physical verification of bulk inventories (as described in Notes 1(D), 1(Y)(VII) and 10 of the standalone financial statements)
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Bulk inventory for the Company primarily comprises of coal, petcoke and clinker which are used during the production
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Our audit procedures included the following:
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process at the Company's plants. Company has laid down
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• Obtained an understanding of the Company's process
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a policy for physical verification defining, amongst other
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and controls with respect to physical verification of bulk
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things, the frequency, responsibility and tolerance limits for all
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inventories and evaluated the design effectiveness and
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category of inventories, including bulk inventories. Company
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operating effectiveness of these controls.
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also performs regular calibration checks of measuring
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• On a test basis, reviewed the equipment calibration check
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equipment involved in determining physical quantities of
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reports.
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bulk inventories and also engages independent third party to
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• Obtained reports of physical verification performed for
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perform physical quantity checks.
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bulk inventories by management during the fifteen months
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Determination of physical quantities of bulk inventories is
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financial year and at year end and assessed, on a test basis,
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done based on volumetric measurements and involves special
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that adjustments, if any, have been recorded for differences
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considerations with respect to physical measurement, density
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as compared to the inventory records as per the books.
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calculation, moisture, etc.
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• Assessed the frequency of physical verification performed by
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Considering the inherent risk involved in determining physical
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independent third party in line with the Company's policy and
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quantities of bulk inventories, we have considered this as a key
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on a test basis, reviewed the reports issued.
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audit matter.
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• On a test basis, observed physical verification performed by the management at or near year end.
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Other Information
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 financial statements and our auditor's 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 standalone 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 the Management for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone
financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, 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 Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 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 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 standalone 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 standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our 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 financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the standalone financial statements for the fifteen months financial year ended March 31, 2023 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
The standalone financial statements of the Company for the year ended December 31, 2021, included in these standalone financial statements, have been audited by the predecessor auditor who expressed an unmodified opinion on those statements on February 9, 2022.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in 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 except for the possible effects, if any, of the matter described in the Basis for Qualified Opinion paragraph, 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) Except for the possible effects, if any, of the matter described in the Basis for Qualified Opinion paragraph, 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) Except for the possible effects, if any, of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone 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) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;
(f) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act;
(g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph and paragraph (b) above;
(h) With respect to the adequacy of the internal financial controls with reference to standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2” to this report;
(i) In our opinion, the managerial remuneration for the fifteen months financial year ended March 31, 2023 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.
(j) 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 financial statements - Refer Note 40(A) to the standalone 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. a) The management has represented that, to the
best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Company (‘Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and sub-clause (b) contain any material misstatement,
v. The final dividend paid by the Company during the
fifteen months financial year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend,
As stated in Note 52 to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the fifteen months financial year which is subject to the approval of the members at the ensuing Annual General Meeting, The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend,
vi, As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w,e,f, April 1, 2023, reporting under this clause is not applicable,
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Abhishek Agarwal
Partner
Membership Number: 112773
UDIN: 23112773BGRIEI3943
Place of Signature: Mumbai
Date: April 27, 2023
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