Ia Q2 2019-20

Arunachala Logistics Private Limited
Internal Audit Report

For the Period July 2019 to September 2019
CA Ajay.C.Mehta
Chartered Accountant
Internal Audit Report for the Quarter July 2019 to September 2019
Table of Contents
1. Follow-up Report for Q1 of FY 2019-2020
2. Operations
3. Procurement (including Tyres)
4. Driver Performance Incentives
5. Maintenance
6. C & F Operations
7. Pending Insurance Claims & Accidents
8. Statutory Compliances
9. Finance and Accounts
10. Other Areas covered
2
Summary of area wise observation rating:
Number of Number of issues having Observation rating

S.No Area
issues High Medium Low
1 Operations 34 2 32 -
2 Procurement 6 2 4 -
Driver Performance
3 18 2 15 1
Incentives
4 Maintenance 3 - - 3
5 C & F Operations 3 - 3 -
Pending Insurance
6 2 - 2 -
claims
7 Statutory compliances 23 2 19 2
8 Finance and accounts 1 - - 1
9 Other areas 4 - 4 -
3
1. Follow-up Report for Q1 of FY 2019-2020
4
Follow-up Report for Q1 of FY 2019-2020
Amount/Issue Amount/Issue Amount/Issue Not
Area Issue Raised Remarks/ Annexure
Reported Rectified Rectified
Short Recovery (42,510) (11,521) (30,989) Details are given in Succeeding Slide
Operations - Diesel Recovery
Excess Recovery 10,729 - 10,729 Details are given in Succeeding Slide
Short Payment (6,126) (6,126) - Details are given in Succeeding Slide

Operations - Diesel Incentive
Excess Payment 26,867 - 26,867 Details are given in Succeeding Slide
Short Payment (9,254) (3,767) (5,487) Details are given in Succeeding Slide
Driver Performance
Excess Payment (3,767) 5,379 (9,146) Details are given in Succeeding Slide
Mismatch in Cost on Invoice

Purchases 739 739
V/s Cost as per GRN -
Short Billed To RCL 1,234 - 1,234

C&F
Excess Billed To RCL 7,152 - 7,152
5
Short Remittance (3,792) -

(3,792)
Employees State Insurance
Excess Remittance 4,884 - 4,884
Short Remittance (438)

(438) -
Provident Fund
Excess Remittance 38 - 38
Short Remittance (1,000) - (1,000)

Professional Tax - Other
states
Excess Remittance 2,700 2,700
-
Finance & Accounts Late delivery charges 3,48,000 - 3,48,000 Details are not provided
6
GST Short Paid on Other Income (6,145) - (6,145)
GST Excess Paid on Other
48,092 32,797 15,295
Income
Ineligible Input 5,400 - 5,400
Input Not Claimed 5,590 - 5,590

Goods and Service Tax
Short Input Claimed 7,927 - 7,927

Excess Input Claimed 8,896 - 8,896
Input accounted under wrong
55,221 - 55,221
head
Excess Input Claimed on Freight 198 - 198
Punctual Incentives - Short Paid 28,250 - 28,250

Other Areas
Punctual Incentives - Excess Paid 7,750 - 7,750
7
Operations
Amount in `
Consolidated Excess/Short Diesel Recovery & Incentive
Diesel Recovery Diesel Incentive

Particulars Particulars
Short Recovery Excess Recovery Excess Incentive Short Incentive
Recovery Reported (42,510) 10,729 Incentive Reported (6,126) 26,867
Recovered/ Paid (11,521) - Recovered/ Paid (6,126) -
Not Recovered/ Not Recovered/

(30,989) 10,729 - 26,867
Not Paid Not Paid
8
Operations
Amount in `
Kodad -Excess/Short Diesel Recovery & Incentive

Particulars Short Excess Particulars Excess Short
Annexure Annexure
Recovery Recovery Incentive Incentive
Recovery Reported (502) - Incentive Reported (941) -
Recovered/ Paid (502) - Recovered/ Paid (941) -

Rectified Rectified

- - - -
Not Paid Not Paid
9
Operations
Amount in `
Peapully Excess/Short Diesel Recovery & Incentive

Annexure Annexure
Recovery Reported (23,037) 3,150 Incentive Reported (765) 6,165
Recovered/ Paid - - Recovered/ Paid (765) -

Rectified

(23,037) 3,150 - 6,165
Not Paid Not rectified
Not Paid
Not rectified
10
Operations
Amount in `
Puttur- Excess/Short Diesel Recovery & Incentive

Particulars Excess Particulars Excess Short
Short Recovery Annexure Annexure
Recovery Incentive Incentive
Recovery Reported (710) 1,273 Recovery Reported - 7
Recovered/ Paid (710) - Recovered/ Paid - -

Rectified

- 1,273 - 7
11
Operations
Amount in `
Hosur Excess/Short Diesel Recovery & Incentive

Annexure Annexure
Recovery Reported (15,879) 5,422 Incentive Reported (4,420) 18,512
Recovered/ Paid (10,309) - Recovered/ Paid - -

Rectified

(5,570) 5,422 (4,420) 18,512 Not rectified
Not Paid Not Rectified
Not Paid -
12
Operations
Amount in `
Coimbatore Excess/Short Diesel Recovery & Incentive

Annexure Annexure
Recovery Reported (2,382) 754 Incentive Reported - 2,183
Recovered/ Paid - - Recovered/ Paid - -

(2,382) 754 - 2,183
13
Operations
Amount in `
Basavakalyan Excess/Short Diesel Recovery & Incentive

Annexure Annexure
Recovery Reported - 130 Incentive Reported - -
Recovered/ Paid - - Recovered/ Paid - -

- 130 - -
Not Paid Not Paid
Not rectified
14
Driver Performance Incentives
Amount in `
Consolidated – Driver Performance Incentives
Particulars Excess Payment to Driver Short Payment to Driver
Short / Excess payment Reported (9,254) 89,606
Short / Excess Incentive

(3,767)
Rectified
Short / Excess incentive not rectified (5,487) 89,606
15
Amount in `
Kodad Peapully
Driver Performance Incentive Driver Performance Incentive

Particulars Excess Short Particulars Excess Short
Annexure Annexure
Payment Payment Payment Payment
Short / Excess Short / Excess

(283) 12,149 (8,738) 10,985
payment Reported payment Reported

Incentive (283) - Incentive (3,251) -
Rectified Rectified Rectified Rectified

incentive not - 12,149 incentive not (5,487) 10,985
rectified Not rectified rectified Not rectified
16
Amount in `
Puttur Hosur

Annexure Annexure

- 5,379 - 5,125

Incentive - - Incentive - -
Rectified Rectified
incentive not - 5,379 incentive not - 5,125
Not rectified Not rectified
rectified rectified
17
Amount in `
Coimbatore Basavakalyan

Annexure Annexure

- 6,581 (233) 8,481

Incentive - - Incentive (233) -
Rectified Rectified Rectified

incentive not - 6,581 incentive not - 8,481
rectified Not rectified rectified Not rectified
18
Amount in `
Hassan– Driver Performance Incentives
Particulars Excess Payment Short Payment Annexure
Short / Excess payment

- 40,906
Reported
Short / Excess Incentive

- -
Rectified
Short / Excess incentive not

- 40,906
rectified Not rectified
19
2.Operations
20
Policy Procedural Regulatory System Deficiency
Operations-Statistical Analysis Observation rating

HIGH MED LOW
Comparatives
No of Trips KMS Travelled
15 200
Thousands
Lakhs
150
10 100
Q1 2019-20 Q2 2019-20 Q2 2018-19 Q1 2019-20 Q2 2019-20 Q2 2018-19
Q1 2019-20 Q2 2019-20 Q2 2018-19 Q1 2019-20 Q2 2019-20 Q2 2018-19

No of Trips 13,139 12,125 14,097 KMS Travelled 16,975,356 15,178,585 17,887,808
Transport revenue Diesel Consumption

100 1
Crores
Crores
80 1
60 0
Q1 2019-20 Q2 2019-20 Q2 2018-19 Q1 2019-20 Q2 2019-20 Q2 2018-19
Q1 2019-20 Q2 2019-20 Q2 2018-19 Q1 2019-20 Q2 2019-20 Q2 2018-19

Transport revenue 853,143,115 774,769,473 755,057,609 Diesel Consumption 6,742,950 6,002,066 6,363,285
Operations-Statistical Analysis Observation rating

HIGH MED LOW
Comparatives
Diesel Expenses Driver Payments
40 11
Crores
Crores
10
30 9
Q1 2019-20 Q2 2019-20 Q2 2018-19 Q1 2019-20 Q2 2019-20 Q2 2018-19
Q1 2019-20 Q2 2019-20 Q2 2018-19 Q1 2019-20 Q2 2019-20 Q2 2018-19

Diesel Expenses 364,282,205 330,734,007 362,532,737 Driver Payments 99,359,010 96,328,650 100,821,428
Trip Expenses Maintenance Expenses

8 8
Crores
Crores
7
6 6
Q1 2019-20 Q2 2019-20 Q2 2018-19 Q1 2019-20 Q2 2019-20 Q2 2018-19
Q1 2019-20 Q2 2019-20 Q2 2018-19 Q1 2019-20 Q2 2019-20 Q2 2018-19

Trip Expenses 72,996,317 64,613,620 64,638,596 Maintenance Expenses 70,101,148 71,592,821 73,910,507
Operations – Diesel Recovery
Snapshot of the Trip sheets closed during the Quarter July 2019 to September 2019
Unit No of Trips Closed No of Trips Verified Percentage of Verification
Kodad 2359 2359 100.00%
Peapully 2530 2530 100.00%
Puttur 2558 2558 100.00%
Hosur 2692 2692 100.00%
Srikakulam 235 235 100.00%
Coimbatore 569 569 100.00%
Basavakalyan 545 545 100.00%
Hassan 637 637 100.00%
Total 12,125 12,125 100.00%
No of Trips Verified
5%
5% 5% Kodad
2% Peapully
19% Puttur
Hosur
22% 21% Srikakulam
Coimbatore
21% Basavakalyan
Hassan 23
Policy Procedural a Regulatory System Deficiency
Observation rating
2.1 Excess/short diesel recoveries & incentives HIGH MED LOW
Key Observations Key Observations
 The diesel recoveries and incentives are calculated based on the  The above actual consumption of diesel is compared with the
target KMPL fixed and the actual Kms travelled as per the trip budgeted consumption and in the event of more consumption of
sheets. These calculations, trip wise has been cross verified with the diesel, the recovery is affected. In the event of better performance in
finance ledgers of Diesel Recovery and Diesel Incentives. terms of diesel consumption, the incentive is paid to the driver.
 Summary of variances noted upon verification are given in the

succeeding slides.
 For verification, reliance is placed on data generated and furnished

by the developers of the Web Portal.
 The consumption of diesel for the trip undertaken is computed

based on the budgeted KMPL for various types of vehicles/routes.
 Based on the actual kms for the trip, the diesel that ought to have
been consumed is determined on the basis of the budgeted KMPL.
 The actual consumption of diesel is determined on the strength of

the diesel indents submitted at the time of closure of the trip.
24
Observation rating
Key Observations
Amount in `
Consolidated Excess/Short Diesel Recovery and Incentive
Unit As per audit As per diesel Net Excess / As per audit As per diesel Net (Excess) /
workings recovery ledger (Short) Recovery workings incentive ledger Short Incentive
38,01,285 38,34,926 33,641 22,36,769 22,26,639 10,130

Break Up Break Up
Consolidated
Short Recovery made (11,452) Excess Incentive paid (2,321)
Excess Recovery made 45,093 Short Incentive paid 12,459
 Unit wise Summaries are given in the succeeding slides along with links to the detailed trip wise diesel recovery/incentive calculations.
25
Observation rating
Key Observations - Kodad
Amount in `
Unit-1 Kodad - Excess/Short Diesel Recovery and Incentive
8,13,329 8,24,312 10,983 2,00,771 1,89,177 11,594

Break Up Break Up
Kodad
Short Recovery made (8) Excess Incentive paid -
Excess Recovery made 10,991 Short Incentive paid 11,594
Link to Driver-Wise summary
26
Observation rating
Key Observations – Peapully
Amount in `
Unit-2 Peapully - Excess/Short Diesel Recovery and Incentive
7,85,972 8,02,629 16,657 3,91,077 3,93,046 (2,329)

Break Up Break Up
Peapully
Short Recovery made (6,989) Excess Incentive paid (2,329)
Excess Recovery made 23,646 Short Incentive paid -
27
Observation rating
Key Observations - Puttur
Amount in `
Unit-3 Puttur - Excess/Short Diesel Recovery and Incentive
6,31,051 6,37,050 5,998 6,76,502 6,76,502 -

Break Up Break Up
Puttur
Short Recovery made - Excess Incentive paid -
Excess Recovery made 5,998 Short Incentive paid -
28
Observation rating
Key Observations - Hosur
Amount in `
Unit-4 Hosur - Excess/Short Diesel Recovery and Incentive
5,25,907 5,29,402 3,495 7,73,115 7,72,363 752

Break Up Break Up
Hosur
Short Recovery made (948) Excess Incentive paid -
Excess Recovery made 4,444 Short Incentive paid 752
29
Observation rating
Key Observations - Srikakulam
Amount in `
Unit-5 Srikakulam - Excess/Short Diesel Recovery and Incentive
3,25,312 3,25,312 - 39,134 39,134 -

Break Up Break Up
Srikakulam
Excess Recovery made - Short Incentive paid -
30
Observation rating
Key Observations - Coimbatore
Amount in `
Unit-7 Coimbatore - Excess/Short Diesel Recovery and Incentive
Unit As per audit As per diesel Net Excess / As per audit As per diesel Net (Excess) / Short
workings recovery ledger (Short) Recovery workings incentive ledger Incentive
1,87,909 1,87,909 - 7,459 7,347 113

Break Up Break Up
Coimbatore
Excess Recovery made - Short Incentive paid 113
31
Observation rating
Key Observations - Basavakalyan
Amount in `
Unit-8 Basavakalyan - Excess/Short Diesel Recovery and Incentive
2,22,655 2,19,161 (3,493) 98,326 98,326 -

Break Up Break Up
Basavakalyan
Short Recovery made (3,507) Excess Incentive paid -
Excess Recovery made 14 Short Incentive paid -
32
Observation rating
Key Observations - Hassan
Amount in `
Unit-9 Hassan - Excess/Short Diesel Recovery and Incentive
3,09,150 3,09,150 - 50,384 50,384 -

Break Up Break Up
Hassan
Excess Recovery made - Short Incentive paid -
33
Observation rating
2.1 Excess/short diesel recoveries HIGH MED LOW
Summary of Diesel Short & Excess Recovery
Units Kodad Peapully Puttur Hosur Coimbatore Basavakalyan Hassan

Total
Recovery (Short) Excess (Short) Excess (Short) Excess (Short) Excess (Short) Excess (Short) Excess (Short) Excess
Manual
(8) 125 - - - 5,998 (948) 1,699 - - (3,507) 14 - - 3,373
Entries
Portal
- - - 14,592 - - - - - - - - - - 14,592
Error
KMPL - 10,866 (6,989) 9,053 - - - 2,745 - - - - - - 15,675
Total (8) 10,991 (6,989) 23,645 - 5,998 (948) 4,444 - - (3,507) 14 - - 33,640
34
Observation rating
2.1.1 Excess/short diesel recoveries HIGH MED LOW
Manual Exemptions/Recoveries
• Short/Excess diesel recoveries were made from the drivers as the manual exemptions/recoveries were wrongly calculated. Details of the same
are as given below:
Diesel Recovery as Diesel Recovery (Short)/Excess

Unit Particulars Annexure
per Calculation as per ledger paid
Short Recovery 4,159 4,151 (8)

Kodad Excess Recovery 2,783 2,909 125
Unit - 1
Total 6,942 7,059 117
Short Recovery - - -
Puttur Excess Recovery 5,797 11,796 5,998
Unit - 3
Total 5,797 11,796 5,998
Short Recovery 4,881 3,933 (948)
Hosur Excess Recovery 5,298 6,997 1,699
Unit - 4
Total 10,179 10,930 751
35
Observation rating
Manual Exemptions/Recoveries
• Short/Excess diesel recoveries were made from the drivers as the manual exemptions/recoveries were wrongly calculated. Details of the same
are as given below:
Diesel Recovery Diesel Recovery (Short)/Excess

as per Calculation as per ledger paid
Short Recovery - 3,507 (3,507)

Basavakalyan Excess Recovery 54 68 14
Unit - 8
Total 54 3,575 3,493
Recommendations
 Manual exemptions should be properly calculated and approval for the same should be taken.
36
36
Policy Procedural a Regulatory System Deficiency a
Observation rating
Non Updation of KMPL

• Short/Excess Diesel recovery was made from the drivers as the KMPL was not updated in portal as per budget. Details of the same are given
below:
Kodad Excess Recovery - 10,866 10,866
Unit - 1
Total - 10,866 10,866
Short Recovery 10,966 3,978 (6,989)
Peapully Excess Recovery 3,819 12,872 9,053
Unit - 2
Total 14,785 16,850 2,065
Hosur Excess Recovery - 2,745 2,745
Unit - 4
Total - 2,745 2,745
Recommendations:
 KMPL should be updated in portal as and when the KMPL is changed and Effective date should not be backdated.
37
Policy Procedural Regulatory System Deficiency a
Observation rating
Portal Errors
• Excess Diesel recovery was made from the drivers as the diesel recovery entry was wrongly posted. Summary of the same are as given below:

Peapully Excess Recovery 14 473 459
Unit - 2
Total 14 473 459
• In unit-2, KMPL for Bulkers is picked based on the tonnage wise slabs fixed in portal. In few instances first slab KMPL’s are picked even though
the tonnage carried falls in other slabs.
Peapully Excess Recovery 658 14,792 14,133
Unit - 2
Total 658 14,792 14,133
Recommendations:
 Necessary rectification entries are to be passed
38
Observation rating
2.1 Excess/short Diesel Incentives HIGH MED LOW
Summary of Diesel Short & Excess Incentives

Total
Incentive Short (Excess) Short (Excess) Short (Excess) Short (Excess) Short (Excess) Short (Excess) Short (Excess)
Manual Entries - - - (1,351) - - - - 113 - - - - - (1,238)
Portal Errors 1,293 - - - - - - - - - - - - - 1,293
KMPL 10,301 - - - - - 752 - - - - - - - 11,053
Incentive Eligibility - - - (979) - - - - - - - - - - (979)
Total 11,594 - - (2,330) - - 752 - 113 - - - - - 10,129
39
Observation rating
2.1.2 Excess/short diesel incentives HIGH MED LOW
Ineligible Diesel Incentives paid

• New Vehicles are not eligible for Diesel incentives until final KMPL is fixed for the Vehicles. Any Diesel Incentive calculated and posted as per
the portal is to be reversed, but it is observed that incentive was paid to drivers for trips with new vehicle resulting in excess incentives to the
drivers. Summary of the same are as given below:
Diesel Incentive as Diesel Incentive Short/(Excess)

Excess Incentive - 979 (979)
Peapully Short Incentive - - -
Total - 979 (979) Unit - 2
Recommendations
• Necessary rectification entries are to be passed.
40
Observation rating
Non Updation of KMPL

• Short/Excess Diesel incentive was paid to the drivers as the KMPL was not updated in portal as per budget. Summary of the same are as given
below:
Diesel Incentive Diesel Incentive Short/(Excess)

Excess Incentive - - -
Kodad Short Incentive 13,205 2,904 10,301
Unit - 1
Total 13,205 2,904 10,301
Hosur Short Incentive 2,486 1,734 752
Unit - 4
Total 2,486 1,734 752
Recommendations
 KMPL should be updated in portal & circulars as and when the KMPL is changed and Effective date should not be backdated.
41
Observation rating
Manual Reversal's
• Short diesel incentives were given to the drivers as the manually nullified/reversed entries were wrongly calculated. Details of the same are as
given below:
Diesel Incentive as Diesel Incentive as
Unit Particulars Short/(Excess) paid Annexure
per Calculation per ledger
Excess Incentive - 1,351 (1,351)
Peapully Short Incentive - - -
Total - 1,351 (1,351) Unit - 2
Coimbatore Short Incentive 113 - 113
Total 113 - 113 Unit - 7
Recommendations
• Manual reversals/nullifications should be properly calculated and approval for the same should be taken.
42
Observation rating
Wrong KMPL Considered in portal

• Short/Excess Diesel incentive was paid to the drivers as the KMPL was wrongly considered in portal. Summary of the same are as given below:
Diesel Incentive Diesel Incentive Short/(Excess)

Kodad Short Incentive 1,293 - 1,293
Unit - 1
Total 1,293 - 1,293
Recommendations
 KMPL should be updated in portal & circulars as and when the KMPL is changed. 43
2.1.4 Excess/short diesel recoveries & incentives
Statistical Analysis of Q1(FY 2018-19) & Q2 (FY 2019-20)
• Given below is the comparison showing the percentage of discrepancies in the trip sheets between Q1 (FY 2019-20) & Q2 (FY 2019-20)
pertaining to Unit – 1.
Unit-1 Unit-1
Q.E. 30th
Particulars Q.E. 30th June, Particulars Q.E. 30th June, Q.E. 30th
September,
2019 2019 September, 2019
2019
No. of trips Verified 3352 2359 No. of slips Verified 649 508
No. of Trips with Variances 1 10 No. of Slips with Variances 1 7
Percentage of Trips with variances 0.03% 0.42% Percentage of Slips with variances 0.15% 1.38%
Change (Increase)/Decrease (0.39%) Change (Increase)/Decrease (1.22%)
No. of Instances of Short Recovery 1 1 No. of Instances of Excess Incentive 1 -
Short Recovery (502) (8) Excess Incentive (941) -
Average short recovery per trip (502) (8) Average excess incentive per Slip (941) -
Change (Increase)/Decrease 98.41% Change (Increase)/Decrease 100.00%
Excess Recovery - 10,991 Short Incentive - 11,594
Net (Short)/Excess Recovery (502) 10,983 Net Short/(Excess) Incentive (941) 11,594
44
Observation rating
2.1.4 Excess/short diesel recoveries & incentives HIGH MED LOW
Statistical Analysis of Q1 (FY 2019-20) & Q2 (FY 2019-20)

• Given below is the chart depicting the percentage of discrepancies, short recoveries and excess incentives in the trip sheets comparing Q1 (FY
2019-20) & Q2 (FY 2019-20) pertaining to Unit – 1
1.60% 1 0.94
Thousands
1.38% 1
1.40%
1
1.20%
1
1.00%
1
0.80% 0.50
1
0.60% 0
0.42%
0.40% 0
0.20% 0.15% 0
0.03%
0.00% 0
0.01 -
Discrepancies in Discrepancies in 0
Recoveries incentives Short Recoveries Excess Incentives
Q1 0.03% 0.15% Q1 502 941
Q2 0.42% 1.38% Q2 8 0
45
Unit-2 Unit-2
Q.E. 30th
September,
2019 2019 September, 2019
2019
Change (Increase)/Decrease (0.26%) Change (Increase)/Decrease 2.30%
No. of Instances of Short Recovery 9 4 No. of Instances of Excess Incentive 2 3
Short Recovery (23,037) (6,989) Excess Incentive (765) (2,329)
Average short recovery per trip (2,560) (1,747) Average excess incentive per Slip (383) (776)
Change (Increase)/Decrease 31.74% Change (Increase)/Decrease (102.96%)
Excess Recovery 3,149 23,646 Short Incentive 6,165 -
Net (Short)/Excess Recovery (19,888) 16,657 Net Short/(Excess) Incentive 5,400 (2,329)
46
Observation rating

3.50% 25 23.04
Thousands
2.91%
3.00%
20
2.50%
2.00% 15
1.50%
1.03% 10
1.00% 0.76% 6.99
0.61%
0.50% 5
2.33
0.77
0.00%
Discrepancies in -
Discrepancies in incentives Short Recoveries Excess Incentives
Recoveries
Q1 23,037 765
Q1 0.76% 2.91%
Q2 6,989 2,329
Q2 1.03% 0.61%
47
Unit-3 Unit-3
Q.E. 30th
September,
2019 2019 September, 2019
2019
No. of Instances of Short Recovery 1 - No. of Instances of Excess Incentive - -
Short Recovery (710) - Excess Incentive - -
Average short recovery per trip (710) - Average excess incentive per Slip - -
Excess Recovery 1,273 5,998 Short Incentive 7 -
Net (Short)/Excess Recovery 563 5,998 Net Short/(Excess) Incentive 7 -
48
Observation rating

0.35% 8
0.31%
Hundreds
7.10
0.30% 7
0.25% 0.23% 6
0.20% 5
4
0.15%
0.11%
3
0.10%
2
0.05%
0.00% 1
0.00% - - -
Discrepancies in 0
Recoveries
Q1 0.11% 0.23% Q1 710 -
Q2 0.31% 0.00% Q2 - -
49
Unit-4 Unit-4
Q.E. 30th
Particulars Q.E. 30th June, Particulars Q.E. 30th June, 2019 Q.E. 30th
September,
2019 September, 2019
2019
No. of Instances of Short Recovery 16 4 No. of Instances of Excess Incentive 7 -
Short Recovery (15,879) (948) Excess Incentive (4,419) -
Average short recovery per trip (992) (237) Average excess incentive per Slip (631) -
Excess Recovery 5,422 4,444 Short Incentive 18,512 752
Net (Short)/Excess Recovery (10,457) 3,496 Net Short/(Excess) Incentive 14,093 752
50
Observation rating

2.50% 180
Hundreds
158.79
2.04% 160
2.00%
140
1.50% 120
1.23%
100
1.00% 80
0.66%
60 44.19
0.50%
0.20% 40
20 9.48
0.00% -
Q1 0.66% 2.04% Q1 15879 4419
Q2 1.23% 0.20% Q2 948 0
51
Unit-7 Unit-7
Q.E. 30th
September,
2019 2019 September, 2019
2019
Change (Increase)/Decrease 0.32% Change (Increase)/Decrease (0.11%)
No. of Instances of Short Recovery 1 - No. of Instances of Excess Incentive - -
Short Recovery (2,382) - Excess Incentive - -
Average short recovery per trip (2,382) - Average excess incentive per Slip - -
Excess Recovery 750 - Short Incentive 2,181 113
Net (Short)/Excess Recovery (1,632) - Net Short/(Excess) Incentive 2,181 113
52
Observation rating

0.80% 30
Hundreds
0.70% 0.67%
25 23.82
0.60% 0.56%
0.50% 20
0.40%
0.32% 15
0.30%
0.20% 10
0.10% 5
0.00%
0.00% - - -
Discrepancies in 0
Discrepancies in incentives
Recoveries Short Recoveries Excess Incentives
Q1 0.32% 0.56% Q1 2382 0
Q2 0.00% 0.67% Q2 0 0
53
Unit-8 Unit-8
th Q.E. 30th
Particulars Q.E. 30 June, Particulars Q.E. 30th June, Q.E. 30th
September,
2019 2019 September, 2019
2019
No. of Trips with Variances 4 2 No. of Slips with Variances - -
No. of Instances of Short Recovery 1 1 No. of Instances of Excess Incentive - -
Short Recovery (3) (3,507) Excess Incentive - -
Average short recovery per trip (3) (3,507) Average excess incentive per Slip - -
Change (Increase)/Decrease (1,16,803.67%) Change (Increase)/Decrease 0.00%
Excess Recovery 130 14 Short Incentive - -
Net (Short)/Excess Recovery 127 (3,493) Net Short/(Excess) Incentive - -
54
Observation rating

0.50% 40
Hundreds
0.43% 35.07
0.45% 35
0.40% 0.37%
30
0.35%
0.30% 25
0.25% 20
0.20%
15
0.15%
0.10% 10
0.05% 5
0.00% 0.00%
0.00% 0.03 - -
Discrepancies in 0
Recoveries
Q1 Q1 3 0
0.43% 0.00%
Q2 Q2 3507 0
0.37% 0.00%
55
Unit-9 Unit-9
th
Particulars Q.E. 30 June, Q.E. 30th Particulars Q.E. 30th
Q.E. 30th June, 2019
2019 September, 2019 September, 2019
No. of Trips with Variances - - No. of Slips with Variances - -
No. of Instances of Short Recovery - - No. of Instances of Excess Incentive - -
Short Recovery - - Excess Incentive - -
Average short recovery per trip - - Average excess incentive per Slip - -
Change (Increase)/Decrease 0.00% Change (Increase)/Decrease -
Excess Recovery - - Short Incentive - -
Net (Short)/Excess Recovery - - Net Short/(Excess) Incentive - -
56
Observation rating

100.00% 0
Hundreds
90.00% 0
80.00% 0
70.00% 0
60.00% 0
50.00% 0
40.00% 0
30.00% 0
20.00%
0
10.00%
0.00% 0.00% 0.00% 0.00% 0
0.00% - - - -
Q1 Q1 0 0
0.00% 0.00%
Q2 Q2 0 0
0.00% 0.00%
57
Operations – Expenditure
Snapshot of the Trip sheets closed during the Quarter July 2019 to September 2019
Expenditure
No. of Trips
Unit
Percentage of
No of Trips Closed Vouched Not Vouched
Verification
Kodad 2359 239 2120 10.13
Peapully 2530 307 2223 12.13
Puttur 2558 257 2301 10.05
Hosur 2692 268 2424 9.96
Srikakulam 235 20 215 8.51
Coimbatore 569 54 515 9.49
Basavakayan 545 62 483 11.38
Hassan 637 72 565 11.30
Total 12125 1279 10846 10.55
5% 5% 5%
No of Trips Closed Kodad
19% Peapully
2% Puttur
Hosur
22% Srikakulam
21% Coimbatore
Basavakalyan
21% Hassan 58
Observation rating
2.2 Trip route Expenditures- Budget vs Actual HIGH MED LOW
Key Observations
Amount in `
Consolidated - Trip Expenditure - Budget V/S Actuals
Budgeted Expenditure for the Actual Expenditure incurred for

Unit Variance
trips made trips made
13,89,837 12,33,709 1,56,128
Break Up
Consolidated
Excess of actuals over budgets (3,669)
Excess of budgets over actuals 1,59,796
 Unit wise trip wise actual v/s budgets are given in the succeeding slides.
59
59
Observation rating
2.2 Excess/short Trip Expenditure HIGH MED LOW
Summary of Trip Expenditure Short & Excess (Budget Vs Actual)
Units Kodad Peapully Puttur Hosur Srikakulam Coimbatore Basavakalyan Hassan
Total
Expense Head Short (Excess) Short (Excess) Short (Excess) Short (Excess) Short (Excess) Short (Excess) Short (Excess) Short (Excess)
Loading Charges - - - - - - - - - - - - - - - - -
Unloading Charges - - - - - - - - - - - - (319) 10,830 - - 10,512
Return Load Load Ch - - - - - 100 - - - - - 240 - - - - 340
Ret Load Un-Load ch - 59 - - - - - - - - - - - - - - 59
Toll Gates (120) 5,518 (3,230) 72,290 - 48,260 - 275 - 12,218 - 355 - 4,725 - 121 1,40,412
Fixed Food Expenses - - - 600 - 3,850 - - - - - - - 350 - 4 4,804
Kanta - - - - - - - - - - - - - - - - -
Village Tax - - - - - - - - - - - - - - - - -
Other Trip Expenses - - - - - - - - - - - - - - - - -
Total (120) 5,577 (3,230) 72,890 - 52,210 - 275 - 12,218 - 595 (319) 15,905 - 125 1,56,127
60
Observation rating
Key Observations – Kodad
Amount in ` Summary
Unit-1-Kodad - Trip Expenditure - Budget V/S Actuals Excess of Actuals Excess of Budgets
Expenditure Budget Actual Variance
over Budgets over Actual
Budgeted Actual
Unit Variance
Expenditure Expenditure Loading Charges - - - -
-
1,41,591 1,36,133 5,458 Unloading Charges - - - - -
Break Up
Kodad Return Load Load Ch 54,140 54,140 -
-
-
Excess of actuals over budgets (120)
Ret Load Un-Load ch 14,835 14,776 - 59 59
Excess of budgets over actuals 5,518 Toll Gates 56,626 51,228 (120) 5,518 5,398
Fixed Food Expenses 4,400 4,400 - - -
Kanta - - - - -
• The Summary in a form a chart is given in the succeeding
slide. Village Tax 11,590 11,590 - - -
Other Trip Expenses - - - - -
Total 2,03,241 3,09,610 (120) 5,577 5,457
6161
Trip route Expenditures- Budget vs Actual – Kodad
60
55 56
50
40
30
Excess of Actuals over Budgets

20 Excess of Budgets over Actuals
10
- - - - - - - 1 - - - - - - - -
-
(1) (1)
(10)
1 2 3 4 5 6 7 8 9 10
Excess of Actuals over Budgets - - - - (120) - - - - (120)
Excess of Budgets over Actuals - - - 59 5,518 - - - - 5,577
Observation rating
Key Observations – Peapully
Amount in `
Summary
Unit-2-Peapully - Trip Expenditure - Budget V/S Actuals
Excess of Actuals Excess of Budgets
Budgeted Actual Expenditure Budget Actual Variance
Unit Variance over Budgets over Actual
Expenditure Expenditure
Loading Charges - - - - -
3,36,900 2,67,240 69,660
Unloading Charges - - - - -
Break Up Return Load Load Ch 18,100 18,100 - - -
Peapully
Excess of actuals over budgets (3,230) Ret Load Un-Load ch - - - - -
Toll Gates 2,21,550 1,52,490 (3,230) 72,290 69,060

Excess of budgets over actuals 72,890
Fixed Food Expenses 96,800 96,200 - 600 600
Kanta - - - - -
Village Tax 450 450 - - -
slide
Total 3,36,900 2,67,240 (3,230) 72,890 69,660
63
Trip route Expenditures- Budget vs Actual - Peapully
80
Thousands
72 73
70
60
50
40
Excess of Budgets over Actual

30
20
10
- - - - - - - - 1 - - - - - - -
-
(3) (3)
(10)
1 2 3 4 5 6 7 8 9 10
Excess of Budgets over Actual - - - - 72,290 600 - - - 72,890
Excess of Actuals over Budgets - - - - (3,230) - - - - (3,230)
Policy Procedural a Regulatory System al
Deficiency
Observation rating
Key Observations - Puttur
Amount in ` Summary
Unit-3-Puttur - Trip Expenditure - Budget V/S Actuals
Budgeted Actual over Budgets over Actual
Unit Variance
1,97,250 1,45,040 52,210 Unloading Charges - - - - -
Break Up Return Load Load Ch 21,600 21,500 - 100 100

Puttur
Excess of actuals over budgets - Ret Load Un-Load ch 2,400 2,400 - - -
Excess of budgets over actuals 52,210 Toll Gates 1,38,840 90,580 - 48,260 48,260
Fixed Food Expenses 30,700 26,850 - 3,850 3,850
Kanta - - - - -
Village Tax 3,710 3,710 - - -
Total 1,97,250 1,45,040 - 52,210 52,210

slide
6565
Trip route Expenditures- Budget vs Actual - Puttur
600
Hundreds
522
500 483
400
300
200
100
39
- - - - 1 - - - - - - - - - - - -
-
Loading Unloading Return Load Ret Load Fixed Food Other Trip
Toll Gates Kanta Village Tax
Charges Charges Load Ch Un-Load ch Expenses Expenses
Excess of Budgets over Actual - - 100 - 48,260 3,850 - - - 52,210
Excess of Actuals over Budgets - - - - - - - - - -
Observation rating
Amount in `
Summary
Unit-4-Hosur - Trip Expenditure - Budget V/S Actuals
Budgeted Actual Excess of Actuals Excess of Budgets
Unit Variance Expenditure Budget Actual Variance
Expenditure Expenditure over Budgets over Actual
1,94,661 1,94,386 275 Loading Charges - - - - -
Break Up Unloading Charges - - - - -

Hosur
Excess of actuals over budgets - Return Load Load Ch 10,270 10,270 - - -
Excess of budgets over actuals 275 Ret Load Un-Load ch 250 250 - - -
Toll Gates 4,631 4,356 - 275 275
Fixed Food Expenses 1,75,900 1,75,900 - - -
Kanta - - - - -
Village Tax 3,610 3,610 - - -
• The Summary in a form a chart is given in the succeeding Total 1,94,661 1,94,386 - 275 275
slide
67
67
Trip route Expenditures- Budget vs Actual - Hosur
3
Hundreds
3 3
2
- - - - - - - - - - - - - - - - - -
-
Loading Unloading Return Load Ret Load Un- Fixed Food Other Trip
Charges Charges Load Ch Load ch Expenses Expenses
Excess of Budgets over Actual - - - - 275 - - - - 275
Observation rating
Amount in ` Summary
Unit-5-Srikakulam - Trip Expenditure - Budget V/S Actuals
31,030 18,812 12,218 Loading Charges - - - - -
Break Up
Srikakulam Return Load Load Ch 6,110 6,110 - - -
Excess of actuals over budgets -
Ret Load Un-Load ch 2,000 2,000 - - -
Toll Gates 21,840 9,622 - 12,218 12,218
Fixed Food Expenses - - - - -
Kanta - - - - -
Village Tax 1,030 1,030 - - -
Other Trip Expenses 50 50 - - -

slide Total 31,030 18,812 - 12,218 12,218
69
69
Trip route Expenditures- Budget vs Actual - Coimbatore
14
Thousands
12 12
12
10

6
- - - - - - - - - - - - - - - - - -
-
Excess of Budgets over Actual - - - - 12,218 - - - - 12,218
Observation rating
Amount in ` Summary
Unit-7-Coimbatore - Trip Expenditure - Budget V/S Actuals
1,42,143 1,41,548 595 Loading Charges - - - - -

Break Up
Coimbatore
Excess of actuals over budgets - Return Load Load Ch 38,600 38,360 - 240 240
Ret Load Un-Load ch 3,500 3,500 - - -

Excess of budgets over actuals 595
Toll Gates 22,943 22,588 - 355 355
Fixed Food Expenses 77,100 77,100 - - -
Kanta - - - -
Village Tax - - - - -

slide Total 1,42,143 1,41,548 - 595 595
71
71
Trip route Expenditures- Budget vs Actual - Coimbatore
7
Hundreds
6
6
4
4

3
2
- - - - - - - - - - - - - - - - -
-
Excess of Budgets over Actual - - 240 - 355 - - - - 595
Observation rating
Summary
Amount in `
Unit-8-Basavakalyan - Trip Expenditure - Budget V/S Actuals
Unit Variance
2,77,732 2,62,145 15,587
Unloading Charges 2,08,463 1,97,951 (319) 10,830 10,512
Break Up
Basavakalyan Return Load Load Ch - - - - -
Excess of actuals over budgets (319)
Ret Load Un-Load ch - - - - -
Toll Gates 8,520 3,795 - 4,725 4,725
Kanta 9,699 9,699 - - -

Total 2,77,732 2,62,145 (319) 15,905 15,587
slide
73
73
Trip route Expenditures- Budget vs Actual - Basavakalyan
180
Hundreds
159
160
140
120
108
100
80
60 Excess of Budgets over Actual

47
40
20
4
- - - - - - - - - - - - - -
-
(3) (3)
(20)
Loading Unloading Return Load Ret Load Fixed Food Other Trip
Charges Charges Load Ch Un-Load ch Expenses Expenses
Excess of Actuals over Budgets - (319) - - - - - - - (319)
Excess of Budgets over Actual - 10,830 - - 4,725 350 - - - 15,905
Observation rating
Amount in ` Summary
Unit-9-Hassan- Trip Expenditure - Budget V/S Actuals
Unit Variance
68,530 68,405 125
Break Up Return Load Load Ch 30,680 30,680 - - -
Hassan
Excess of actuals over budgets -
Ret Load Un-Load ch - - - - -
Excess of budgets over actuals 125 Toll Gates 450 329 - 121 121
Kanta - - - - -
• The Summary in a form a chart is given in the succeeding Total 68,530 68,405 - 125 125
slide
75
75
Trip route Expenditures- Budget vs Actual - Hassan
1
Hundreds
1
1
1

1
0
- - - - - - - - - - - - - - - - -
-
Excess of Budgets over Actual - - - - 121 4 - - - 125
Observation rating
2.2.1 Excess/short fixed food expenses HIGH MED LOW
Observations
• Fixed Food Expenses

Unit Budget Actual Variance Annexure
Peapully 900 300 600

Unit 2
Puttur 6,900 3,050 3,850

Unit 3
Basavakalyan 1,950 1,600 350

Unit 8
Total 9,750 4,950 4,800
• Cement unloading charges were Short/(Excess) paid, details of the same are as given in the below annexures:
Basavakalyan 90,813 80,301 10,512

Unit 8
77
Observation rating
2.2.2 Excess/short Return load Loading / Un Loading charges HIGH MED LOW
Observations
• Return load loading charges were Short/(Excess) paid, details of the same are as given in the below annexures
Puttur 100 - 100

Unit 3
Coimbatore 1,840 1,600 240

Unit 7
Total 1,940 1,600 340
• Return load Unloading charges were Short/(Excess) paid, details of the same are as given in the below annexures
Kodad 5,103 5,043 60

Unit 1
78
Observation rating
2.2.3 Excess/short toll gates HIGH MED LOW
Observations
• Toll Charges
Kodad 18,866 13,468 5,398
Unit 1
Peapully 1,90,490 1,21,430 69,060

Unit 2
Puttur 85,665 37,405 48,260

Unit 3
Hosur 4,631 4,356 275

Unit 4
Srikakulam 21,840 9,622 12,218

Unit 5
Coimbatore 1,035 680 355

Unit 7
Basavakalyan 8,200 3,475 4,725

Unit 8
Hassan 225 105 120

Unit 9
Total 3,30,952 1,90,541 1,40,411 79

Observation rating
2.2.4 Excess/short toll gates HIGH MED LOW
Observations
Trip Wise Toll Charge Deductions (FASTag) – We have mapped Toll Charge based on the transaction date against the Trip period. We have
verified 10% of the trips closed during the Quarter. We have observed that there are toll deductions which are not as per the budgets prepared
for FASTag Toll Charges. Details are given in the annexure below:
Quarter Unit 1 Unit 3 Unit 4 Unit 5 Unit 7 Unit 8 Unit 9
Q2
Unit -1 Unit - 3 Unit - 4 Unit - 5 Unit - 7 Unit - 8 Unit - 9
80
3.Procurement (including Tyres)
81
Procurement(Including Tyres)-Process Workflow
Purchase Requisition is Purchase Department(HO)

The comparative statement
received from the Stores In The purchase requisition is obtains quotations from
will come in the workflow
charge(Unit) in SAP with received by the concerned vendors and on the basis of
to Purchase Manager, AGM
approval of the Manager unit purchase these quotations a
Maintenance and lastly for
Maintenance of particular department(HO) . comparative statement is
the final approval of ED.
unit. prepared.
All the relevant documents

On receipt of materials at On the basis of approval
are sent to Accounts
the respective unit and on received, a PO is raised by
department (H.O) and a
the basis of invoice copy , a Purchase Department in
purchase voucher is raised
GRN is prepared. SAP.
by the Accounts Manager
in SAP.
82
a
3.1 Issues relating to PO, GRN and Policy Procedural Regulatory System Deficiency
Observation rating
Security Inward dates HIGH MED LOW
Key Observations Key Observations

GRN is prepared at respective units for the materials received by them • It is observed that GRN’s were prepared prior to the security inward
after the same is stamped by the security personnel. stamp date which indicates that GRN’s are prepared even before
the goods are physically received by the units. The table and
• On comparison of GRN date with the Security Inward stamp date it annexure below depicts the same. Alternatively it indicates that
is observed that there were delays in preparation of GRN’s for the security inward stamps are obtained later on for regularization.
goods received. The table and annexure below depicts the same.
Ageing in No. of
days cases
Delay in no of No. of 1 5
days instances
2 1 GRN date prior to
0–1 271
3 0 security date
2 – 10 324
>4 1
11 – 30 89 Delay in raising Total 7
>30 13 GRN
• It is observed that in 129 instances Security inward date is prior to
Total 697
the PO date indicating that goods are received even before a PO for
the same is raised. The table and annexure below depicts the same.
Delay in no of days No. of instances
1–5 84
6 – 10 22 Security date
11 – 15 6 prior to PO date
>15 17
Total 129 83
3.1 Issues relating to PO, GRN and Observation rating
Potential impact/Risk(s) faced Management’s Response

• Raising of GRN before the security inward stamp date indicates the
inward movement of goods without passing through security.
• Delays in raising GRN indicates material received is lying
unaccounted and/or there is a delay in updating of inventory
records.
• Delays in preparation of GRN may lead to a situation where physical
stock may not match with the book records.
• Instances where PO’s are raised after the actual receipt of goods
indicate that the suppliers have supplied the goods on a verbal
order which later on is regularized by raising a written PO.
Recommendations
• To ensure that there are no delays in raising GRN’s.
• To ensure that the inward movement of materials is properly
recorded and stamped at security gate before it reaches the stores.
84
Observation rating
3.2 PO’s are raised only for internal regularization HIGH MED LOW
Key Observations Potential impact/Risk(s) faced

Purchase orders are raised in the SAP after comparatives are • Ad-hoc procurements can be made without obtaining requisite written
prepared and approvals are taken for the same. approvals or POs for the same.
• We have observed that in 160 instances the PO’s have been • Ad-hoc procurements can be made by justifying such purchases as
raised after the suppliers’ invoice date. The illustrative list is emergency as PO’s are raised after the goods are received at the respective
given in the Annexure alongside. units and HO.
No of days by
which Invoice No. of instances
Recommendations
precedes the PO
0-5 111 • To ensure that PO’s are issued to the suppliers and on the strength of which
6 – 10 21
PO raised after
the supplies are to be affected.
11 – 30 23 Invoice
>30 4
Total 159 Management’s Response
• It prima facie appears that the PO’s are generated for

regularization and are not issued to the suppliers. The
suppliers in almost all the cases baring very few, do not
quote the PO number in their invoices.
85
Observation rating
3.3 Absence of Security Stamp/Multiple security dates HIGH MED LOW
Key Observations Recommendations

GRN is prepared at respective units for the materials received by them
after the same is stamped by the security personnel. • To ensure that GRN are not raised in the SAP without the security
stamp date being affixed on the vendor Invoice/Delivery challan.
• It is observed that in 423 instances the GRN’s for the goods • To ensure that GRN is prepared as and when the goods are
received were prepared even in the absence of security stamp. received.
• One of the reason for the absence of security stamp is that when
the invoices are submitted to insurance company the rear side of
the Invoice is not photocopied thereby security stamp is not
present.
• The details are given in the annexure along side. Absence of

security date
• It is observed that in 8 instances security stamps with multiple dates

were affixed on invoice. The details given in the annexure along
side.
Potential impact/Risk(s) faced Management’s Responses

• Movement of goods bypass security.
86
Policy Procedural a Regulatory a System Deficiency
Observation rating
3.4 Invoices not found/ Copy of invoices HIGH MED LOW
Key Observations Recommendations
• During the course of audit, it is observed that in 45 instances, copy of the • To ensure that all the invoices are available on record.
invoice was attached to the GRN instead of the original Invoice(without • To ensure that the original invoices are kept on record,
insurance stamp). Such instances are annexed below: in the event they are submitted for insurance claims,
appropriate stamp on copy of the bill is to be affixed.
Original bill not

found Potential Impact
• In case of invoices not available on record the GST
• In 6 instances the relevant Purchase Invoice, GRN and Purchase voucher are not input for the same cannot be claimed and also the
available on record for verification for the Q2 2019-2020 , such instances are same will not be allowed as an expenditure under the
annexed below: Income Tax Act.
Missing GRNs
87
Policy Procedural a Regulatory a System Deficiency
Observation rating
3.5
2.6 Excess/(Short) GRN amounts
Other Observations HIGH MED LOW
Key Observation
• It is observed that in 13 instances amounts on the purchase voucher are not matching with the invoice amounts, Such instance are annexed
below:
Potential Impact
• Differences in balance as per vendor books of account and ALPL books of accounts.
Recommendation
• Periodic ledger statements from vendors should be obtained and reconciliation should be done and documented.
88
3.6 Issues relating to PO, GRN and
Security Inward dates
GRN raised prior to Security Inward prior to

Delay in raising GRN P.O after Invoice Date
Security Inward P.O
Particulars
Q.E. 30nd Q.E. 30nd Q.E. 30nd Q.E. 30nd Q.E. 30nd Q.E. 30nd Q.E. 30nd Q.E. 30nd
June, 2019 Sept, 2019 June, 2019 Sept, 2019 June, 2019 Sept, 2019 June, 2019 Sept, 2019
Total no. of Purchases 2,635 2,325 2,635 2,325 2,635 2,325 2,635 2,325
No. of Instances 885 697 4 8 269 185 152 129
Percentage of Instances 33.59% 29.98% 0.15% 0.34% 10.21% 7.96% 5.77% 5.55%
Change (Increase)/Decrease 3.61% (0.19%) 2.25% 0.22%
GRNs with multiple

Absence of Security stamp List of invoices not found
Invoices
Particulars
Q.E. 30nd Q.E. 30nd Q.E. 30nd Q.E. 30nd Q.E. 30nd Q.E. 30nd
June, 2019 Sept, 2019 June, 2019 Sept, 2019 June, 2019 Sept, 2019
Total no. of Purchases 2,635 2,325 2,635 2,325 2,635 2,325
No. of Instances 274 423 5 8 57 6
Percentage of Instances 10.40% 18.19% 0.19% 0.34% 2.16% 0.26%
Change (Increase)/Decrease (7.80%) (0.15%) 1.91%
89
3
- .6 Issues relating to PO, GRN and Observation rating

• Given below chart depicts the analysis for Absence of Security Stamp, P.O after Invoice Date, Delay in raising GRN and Security Inward prior to
P.O. as comparison for Q1(FY 2019-20) & Q2 (FY 2019-20) :
Number of Instances in %
40.00%
35.00% 33.59%
29.98%
30.00%
25.00%
20.00%
15.00%
10.21%
10.00% 7.96%
5.77% 5.55%
5.00%
0.00%
P.O after Invoice Date Delay in raising GRN Security Inward prior to P.O
Q1 10.21% 33.59% 5.77%
Q2 7.96% 29.98% 5.55%
90
3.6 Issues relating to PO, GRN and Observation rating

• Given below chart depicts the analysis for No proper Invoice, GRN prior to Security Inward and GRN with multiple Invoices, Invoice not found as
comparison for Q1 (FY 2019-20) & Q2 (FY 2019-20):
Number of Instances in %
20.00% 18.19%
18.00%
16.00%
14.00%
12.00% 10.40%
10.00%
8.00%
6.00%
4.00% 2.16%
2.00% 0.26% 0.15% 0.34%
0.00%
Invoice not found GRN raised prior to Security Inward Absence of security stamp
Q1 2.16% 0.15% 10.40%
Q2 0.26% 0.34% 18.19%
91
Internal Audit Report for the Quarter July 2019 to September 2019.
4.Driver Performance Incentives
92
92
Observation rating
4.1 Calculations of DP Incentives HIGH MED LOW
Key Observations
• Driver Performance incentive slip consists of various kind of incentives to the driver such as Kilometer incentive, Senior Active Driver
Incentive, Super Active driver Incentive, Good Driver Incentive and Return load commission.
• We have verified 100% of the driver performance incentive slips generated during the quarter.
• Based on the various reports generated from the Portal/SAP and on the basis of various incentive schemes and incentive budgets in force we
have re-calculated the incentives payable. With regards to verification of incentive payments/calculations, reliance is placed on data generated
and given to us by the developers of the Web Portal. The differences in the calculation are given in succeeding slides.
Potential impact/ Risk(s) faced Management’s Response

• Errors in calculations may result in excess/short payment of
incentives.
93
Observation rating
4.1 Driver Performance Incentives HIGH MED LOW
Key Observations
Amount in `
Consolidated – Driver Performance Incentives
Unit As per Calculation As per Ledger Variance
9,13,65,483 9,12,49,753 1,15,730

Break Up
Consolidated
Excess payment to Driver (4,427)
Short payment to Driver 1,20,157
94
94
Observation rating
Key Observations - Kodad
Amount in ` Expenditure
As per Our
As per Ledger
Unfavourable Favourable
Variance
Calculation Variance Variance
Unit-1-Kodad – Driver Performance Incentives
Driver
20,88,381 20,88,447 (67) - (67)
As per Performance
Unit As per Ledger Variance
calculation KMS Incentives 1,23,48,761 1,23,48,761 - - -
1,55,62,093 1,55,20,656 41,437 R\L Commission 3,89,277 3,49,750 (2,438) 41,966 39,528
Break Up Punctual Incentive - - - - -

Kodad
Excess payment to Driver (2,529) Senior Active
1,43,250 1,41,250 - 2,000 2,000
Incentive
Short payment to Driver 43,966 Good driver
- - - - -
Incentive
Other Incentives 5,92,424 5,92,448 (24) - (24)
• The Summary in a form of a chart is given in the succeeding
slide. Total 1,55,62,093 1,55,20,656 (2,529) 43,966 41,437
9595
Driver Performance Incentives - Kodad
500
Hundreds
439.66
419.66
400
300
200
Excess Payment to
Driver
100
Short Payment to
Driver
20.00
- - - - - - - - -
-
(0.67) (0.24)
(24.38) (25.29)
(100)
Driver R\L Punctual Senior Active Good Driver Other
KMS Incentives Total
Performance Commission Incentive Incentive Incentive Incentives
Excess Payment to Driver (67) - (2,438) - - - (24) (2,529)
Short Payment to Driver - - 41,966 - 2,000 - - 43,966
Observation rating
Key Observations - Peapully
As per Our
As per Ledger
Variance
Unit-2-Peapully – Driver Performance Incentives
Driver Performance 25,76,498 25,76,498 - - -
As per
Unit As per Ledger Variance KMS Incentives 2,03,38,961 2,03,34,163 - 4,799 4,799
Calculation
R\L Commission 93,027 94,242 (1,215) - (1,215)

2,34,23,669 2,34,17,585 6,084
Peapully Senior Active
Excess payment to Driver (1,215) 3,57,625 3,55,125 - 2,500 2,500
Incentive
Short payment to Driver 7,229 Good Driver
- - - - -
Incentive
Other Incentives 57,558 57,558 - - -
Total 2,34,23,669 2,34,17,585 (1,215) 7,299 6,084
9797
Driver Performance Incentives - Peapully
80
Hundreds
72.99
70
60
50 47.99
40
30
25.00
Excess Payment to
20 Driver
Short Payment to
10 Driver
- - - - - - - - - - -
-
(10)
(12.15) (12.15)
(20)
Excess Payment to Driver - - (1,215) - - - - (1,215)
Short Payment to Driver - 4,799 - - 2,500 - - 7,299
Observation rating
Key Observations – Puttur
Amount in `
As per Our Unfavourable Favourable
Unit3-Puttur – Driver Performance Incentives Expenditure As per Ledger Variance
Driver
21,53,916 21,53,916 - - -
As per Performance
Calculation
KMS Incentives 1,23,74,295 1,23,74,187 - 108 108
1,58,01,336 1,57,96,029 5,307 R\L Commission 10,77,956 10,75,087 - 2,869 2,869

Puttur
Excess payment to Driver (16) Senior Active
1,71,625 1,69,375 - 2,250 2,250
Incentive
Short payment to Driver 5,323
Good Driver
- - - - -
Incentive
Other Incentives 23,544 23,464 (16) 96 80
Total 1,58,01,336 1,57,96,029 (16) 5,323 5,307
9999
Driver Performance Incentives - Puttur
60
Hundreds
53.23
50
40
30 28.69
22.50
Excess Payment to
20
Driver
Short Payment to
Driver
10
1.08 0.96
- - - - - - - - -
-
(0.16) (0.16)
(10)
Performance Commission Incentives Incentive Incentive Incentives
Excess Payment to Driver - - - - - - (16) (16)
Short Payment to Driver - 108 2,869 - 2,250 - 96 5,323
Observation rating
As per Our
As per Ledger
Variance
Unit-4-Hosur – Driver Performance Incentives
Driver
24,45,113 24,45,113 - - -
Performance
As per
Calculation KMS Incentives 1,37,17,326 1,37,17,326 - - -
1,67,28,312 1,67,24,383 3,929 R\L Commission 1,17,998 1,16,694 - 1,304 1,304

Hosur
Excess payment to Driver - Senior Active
4,47,875 4,45,250 - 2,625 2,625
Incentive
- - - - -
Incentive
Other Incentives - - - - -
Total 1,67,28,312 1,67,24,383 - 3,929 3,929
101
10
1
Driver Performance Incentives - Hosur
45
Hundreds
40 39.29
35
30
26.25
25
20 Excess Payment to
Driver
15 Short Payment to
13.04 Driver
10
- - - - - - - - - - - - -
-
Excess Payment to Driver - - - - - - - -
Short Payment to Driver - - 1,304 - 2,625 - - 3,929
Observation rating
Amount in ` As per Our Unfavourable Favourable

Expenditure As per Ledger Variance
Unit-5-Srikakulam – Driver Performance Incentives Calculation Variance Variance
Driver
3,24,488 3,24,488 - - -
As per Performance
Calculation KMS Incentives 14,33,307 14,33,307 - - -
19,64,063 19,64,063 - R\L Commission 62,717 62,717 - - -

Srikakulam
5,500 5,500 - - -
Incentive
Short payment to Driver - Good Driver
- - - - -
Incentive
Other Incentives 1,38,052 1,38,052 - - -
Total 19,64,063 19,64,063 - - -
10
103
3
Driver Performance Incentives - Srikakulam
0
Hundreds
0
Excess Payment to
0 Driver
Short Payment to
0 Driver
- - - - - - - - - - - - - - - -
-
Short Payment to Driver - - - - - - - -
Observation rating
As per Our
As per Ledger
Variance
Unit-7-Coimbatore – Driver Performance Incentives
Driver
7,72,822 7,72,822 - - -
Performance
As per
R\L Commission 2,32,772 2,18,681 (542) 14,634 14,091

61,56,951 61,42,859 14,091
Coimbatore
Excess payment to Driver (542) Senior Active
43,750 43,750 - - -
Incentive
- - - - -
Incentive
Total 61,56,951 61,42,859 (542) 14,634 14,091
10
105
5
Driver Performance Incentives - Coimbatore
160
Hundreds
146.34 146.34
140
120
100
80
60
Excess Payment to
Driver
40 Short Payment to
Driver
20
- - - - - - - - - - - -
-
(5.42) (5.42)
(20)
Excess Payment to Driver - - (542) - - - - (542)
Short Payment to Driver - - 14,634 - - - - 14,634
Observation rating
As per Our
As per Ledger
Variance
Unit 8 -Basavakalyan – Driver Performance Incentives Calculation Variance Variance
Driver Performance 7,03,553 7,03,553 - - -
As per
R\L Commission 2,520 2,520 - - -

44,14,502 44,09,121 5,381
Basavakalyan Senior Active
Excess payment to Driver (125) 37,875 36,500 (125) 1,500 1,375
Incentive
- - - - -
Incentive
Other Incentives 69,069 65,063 - 4,006 4,006
Total 44,14,502 44,09,121 (125) 5,506 5,381
10
` 7
107
Driver Performance Incentives - Basavakalyan
60
Hundreds
55.06
50
40.06
40
30
Driver
15.00
Short Payment to
Driver
10
- - - - - - - - - - -
-
(1.25) (1.25)
(10)
Excess Payment to Driver - - - - (125) - - (125)
Short Payment to Driver - - - - 1,500 - 4,006 5,506
Observation rating
As per Our
As per Ledger
Variance
Unit-9 Hassan – Driver Performance Incentives
Driver
8,59,304 8,59,304 - - -
Performance
As per
R\L Commission 3,11,207 3,11,207 - - -

73,14,557 72,75,057 39,500
Hassan
50,875 11,375 - 39,500 39,500
Incentive
- - - - -
Incentive
Total 73,14,557 72,75,057 - 39,500 39,500
10
c 109
9
Driver Performance Incentives - Hassan
450
Hundreds
395.00 395.00
400
350
300
250

Driver
Short Payment to
150 Driver
100
50
- - - - - - - - - - - - - -
-
Short Payment to Driver - - - - 39,500 - - 39,500
Observation rating
4.2 Excess/short Driver Payments HIGH MED LOW
Summary of Driver Performance Short & Excess Incentives

Total
Incentive Short (Excess) Short (Excess) Short (Excess) Short (Excess) Short (Excess) Short (Excess) Short (Excess)
Driver
(67) - - - - - - - - - - - - - (67)
Performance
KMS
- - - 4,799 - 108 - - - - - - - - 4,907
Incentives
R\L
(2,438) 41,966 (1,215) - - 2,869 - 1,304 (542) 14,634 - - - - 56,577
Commission
Punctual
- - - - - - - - - - - - - - -
Incentive
Senior Active
- 2,000 - 2,500 - 2,250 - 2,625 - - (125) 1,500 - 39,500 50,250
Incentive
Other
(24) - - - (16) 96 - - - - - 4,006 - - 4,062
Incentives
Total (2,529) 43,966 (1,215) 7,299 (16) 5,323 - 3,929 (542) 14,634 (125) 5,506 - 39,500 1,15,730
111
Observation rating
4.2.1 Wrongofcalculation
3.2 Analysis of RL Commission
Driver Performance HIGH MED LOW
Key Observation Summary

Other
• There are short payments in units towards RL Unit Particulars Incentive
Other Short/(Excess)
Annexure
Commission due to non-updation of RL Incentive Paid paid
Payable
Commission details in the OA in the portal. Excess Payment - 2,438 (2,439)
• In few instances the system is not picking up the
Kodad Short Payment 34,076 832 41,967
Commission payable to the driver. Unit - 1
Total 34,076 3,270 39,528
Excess Payment - 1,215 (1,215)
Peapully Short Payment - - -
Total - 1,215 (1,215) Unit - 2
Excess Payment - - -
Recommendations Puttur Short Payment 8,614 5,742 2,869
Total 8,614 5,742 2,869 Unit - 3
• RL Commission payable to the driver is to be
updated in the RL OA on the web portal. Excess Payment - - -
• In cases where the system is not picking the Hosur Short Payment 1,304 - 1,304
correct commission the same needs to be Total 1,304 - 1,304 Unit - 4
rectified. Excess Payment - 542 (542)
Coimbatore Short Payment 14,634 - 14,634
Total 14,634 542 14,091 Unit - 7
112
Observation rating
4.2.2 No. ofof
3.2 Analysis Duties
Driverof driver
Performance HIGH MED LOW
Key Observation Summary
• It is observed that the number of duties of a driver

is not properly updated in the portal even though
the driver has completed the duty, as result short
active/ senior active driver incentives are paid.
• In few instances the incomplete duty of a driver is
Incentive Short/(Excess)
considered as a complete duty, resulting in excess Unit Particulars Incentive Paid Annexure
Payable Paid
payments of active/ senior active driver
incentives. Excess Payment - - -
Kodad Short Payment 2,000 1,000 1,000

Unit - 1
Recommendations Total 2,000 1,000 1,000
• It is observed that the errors are due to deficiency
in the old portal. Since the number of duties are
continuing from the old portal, it is recommended
that the no of duties as on the date of migration
be updated based on our audit report submitted.
This will ensure that the excess/short payment
made at the time of Senior active driver incentive
is not repeated for Super Active driver incentive.
113
Observation rating
4.2.3 Other of
3.2 Analysis Incentives
Potential impact/ Risk(s) faced Summary
• Other Incentive is paid to the drivers based on • Summary :

manual calculation. In few cases there are
short/excess payments towards other incentives Other
Other Short/(Excess)
due to incorrect calculation. Unit Particulars Incentive Annexure
Incentive Paid paid
Payable
Excess Payment 7,626 7,650 (24)
Kodad Short Payment - - -
Unit - 1
Total 7,626 7,650 (24)
Excess Payment 1,268 1,284 (16)
Puttur Short Payment 721 625 96
Recommendations Unit - 3
Total 1,989 1,909 80
Basavakalyan Short Payment 57,006 53,000 4,006
Unit - 8
Total 57,006 53,000 4,006
114
Observation rating
4.2.4 Portal of
3.2 Analysis Errors
• It is observed that in some instances even though • Summary :

drivers are eligible for active driver incentive
portal did not calculate incentive. Which resulted Incentive Short/(Excess)
Unit Particulars Incentive Paid Annexure
payable paid
in short/(excess) payments to the drivers.
Kodad Short Payment 2,000 1,000 1,000
Total 2,000 1,000 1,000 Unit - 1
Peapully Short Payment 5,000 2,500 2,500
Recommendations Unit - 2
Total 5,000 2,500 2,500
Puttur Short Payment 4,500 2,250 2,250
Unit - 3
Total 4,500 2,250 2,250
Hosur Short Payment 5,250 2,625 2,625
Unit - 4
Total 5,250 2,625 2,625
115
Observation rating
4.2.5 Portal of
3.2 Analysis Errors
• It is observed that No. of Completed duties of the • Summary :

transferred driver’s from Unit-2 to Unit-9 and
From Unit-1 to Unit-8 are not migrated. Which
resulted in short active driver incentive to the
drivers. Incentive Short/(Excess)
Unit Particulars Incentive Paid Annexure
Payable Paid
Basavakalyan Short Payment 1,500 - 1,500

Unit - 8
Total 1,500 - 1,500
Recommendations
Hassan Short Payment 39,500 - 39,500
Unit - 9
Total 39,500 - 39,500
116
Observation rating
4.2.6 Non Updation
3.2 Analysis of Target KM’s
of Driver Performance HIGH MED LOW
Key Observation Recommendations

• Target KMS are to be updated on the web portal as and when
• There are excess payments to drivers towards KMs incentive and SA changes are approved.
Incentive due to non-updation of Target KMs in the portal as per the
budget.
Summary
Short/(Excess)
KMS Incentive KMS Incentive
Unit Particulars paid Annexure
paid payable
Peapully Short Payment 45,591 40,793 4,799

Unit - 2
Total 45,591 40,793 4,799
117
Observation rating
4.2.7 Other of
3.2 Analysis differences
Key Observations
• Other Short/Excess payments were made to the driver, details of the same is as given below:
Incentive
Unit Particulars Incentive Paid Short/(Excess) paid Annexure
payable
Kodad Driver Performance 1,187 1,253 (66)

Unit - 1
Peapully KMS Incentive 28,868 28,760 108

Unit - 2
Basavakalyan Active Driver Incentive 1,375 1,500 (125)

Unit - 8
118
4.3 Analysis of Driver Performance
Unit - 1 Unit - 2 Unit - 3 Unit - 4

Particulars Q.E. 30th Q.E. 30th Sep, Q.E. 30th Q.E. 30th Sep, Q.E. 30th Q.E. 30th Sep, Q.E. 30th Q.E. 30th Sep,
June, 2019 2019 June, 2019 2019 June, 2019 2019 June, 2019 2019
Total no. of Slips 649 508 446 490 441 569 539 500
No. of Slips with Differences 19 47 22 5 20 16 5 3
Percentage of Differences 2.93% 9.25% 4.93% 1.02% 4.54% 2.81% 0.93% 0.60%
Change (Increase)/Decrease (6.32%) 3.91% 1.72% 0.33%
Short Payment to the Driver 12,149 43,966 14,621 7,299 5,379 5,323 5,125 3,929
Excess Payment to the Driver (283) (2,529) (8,738) (1,215) (13,307) (16) (740) -
(Increase)/Decrease in Excess
(794.85%) 86.10% 99.88% 100.00%
payment
119
Unit - 7 Unit - 8 Unit - 9 Total

Particulars Q.E. 30th Q.E. 30th Sep, Q.E. 30th Q.E. 30th Sep, Q.E. 30th Q.E. 30th Sep, Q.E. 30th Q.E. 30th Sep,
June, 2019 2019 June, 2019 2019 June, 2019 2019 June, 2019 2019
Total no. of Slips 179 150 193 144 174 169 2621 2530
No. of Slips with Differences 8 15 32 18 25 23 131 127
Percentage of Differences 4.47% 10.00% 16.58% 12.50% 14.37% 13.61% 5.00% 5.02%
Change (Increase)/Decrease (5.53%) 4.08% 0.76% (0.02%)
Short Payment to the Driver 6,581 14,634 8,481 5,506 40,906 39,500 93,242 1,20,157
Excess Payment to the Driver - (542) (6,899) (125) - - (29,966) (4,427)

(Increase)/Decrease in Excess
(54,216.00%) 98.19% 00.00% 85.23%
payment
120
• The below mentioned chart depicts the Number of slips with differences for the two periods viz. Q1 (FY 2019-20) and Q2 (FY 2019-20).
18% 16.58%
16% 14.37%
13.61%
14% 12.50%
12%
10.00%
10% 9.25%
8%
6% 4.93% 4.54% 4.47% 5.00% 5.02%
4% 2.93% 2.81%
2% 1.02% 0.93% 0.60%
0%
Unit 1 Unit 2 Unit 3 Unit 4 Unit 7 Unit 8 Unit 9 Total
Q1 2.93% 4.93% 4.54% 0.93% 4.47% 16.58% 14.37% 5.00%
Q2 9.25% 1.02% 2.81% 0.60% 10.00% 12.50% 13.61% 5.02%
121
• The below mentioned chart depicts the excess payment to the drivers for the two periods viz. Q1 (FY 2019-20) and Q2 (FY 2019-20).
(35)
Thousands
(29.97)
(30)
(25)
(20)
(15) (13.31)
(10) (8.74)
(6.90)
(4)
(5) (3)
(0.28) (1) (0.74) (1)
(0) - - (0) - -
-
Unit-1 Unit-2 Unit-3 Unit-4 Unit-7 Unit-8 Unit-9 Total
Q1 (283) (8,738) (13,307) (740) - (6,899) - (29,967)
Q2 (2,529) (1,215) (16) - (542) (125) - (4,427)
122
5.Maintenance
12
123
3
A trip is closed only after A hard copy of job card is
The job card is raised by the Stores in charge raises MIR and
completion of maintenance of taken and thereafter manual
supervisor for every vehicle. It also raises MIN for issuing the
the vehicle returning from the indents are raised for
includes the details of PPM required materials to the
trip. requirements of spares, Lubs
Schedules to be performed maintenance department.
etc.
All the relevant documents are The supervisor closes and

sent to Maintenance approves the job card after Scheduled maintenance and
department (H.O) completion of job. repairs works are performed.
124
Observation rating
5.1 PPM Schedules HIGH MED LOW
Key Observations Potential impact/ Risk(s) faced

• Planned Preventive Maintenance (PPM) Schedules are carried on by the maintenance • The PPM schedules performed beyond the
department as per the schedule master indicating the various PPM schedules to be tolerance level (10%) may result in poor
performed based on the Kms criteria. maintenance of vehicles thereby increase in cost
• The company has set a tolerance level of 10%. of maintenance.
• The following annexure consists of PPM carried out beyond the tolerance level of
10%. Recommendations
Unit 1 Unit 2 Unit 3 Unit 4 • To ensure that PPM Schedules are performed on
timely basis.
• To ensure that Maintenance Schedule is properly
Unit 2 Unit 3
monitored so as to minimize backlogs.
Unit 1 Unit 4
Management’s Response
• The following annexure consists of repeated schedule carried out within short period.
Unit 1 Unit 2 Unit 4
Unit 1 Unit 2 Unit 4
125
Observation rating
5.2 Vehicle Break Down Analysis HIGH MED LOW
Key Observations
• The summary of vehicle break down enroute and reasons thereof, vehicle-wise and driver-wise is given in the table below:
Unit Vehicle-Wise Driver-Wise
Unit 1
Unit 1 Unit 1
Unit 2
Unit 2 Unit 2
Unit 3
Unit 3 Unit 3
Unit 4
Unit 4 Unit 4
Unit 7
Unit 7 Unit 7
126
Observation rating
5.3 Local Repairs Expenditure HIGH MED LOW
Key Observations
• Local Repairs are incurred at the unit level. The maintenance of vehicle carried is either In-house or outside on contract basis.
• The below is the annexure for vehicle wise local repairs details on account of repeat failure in short duration:
LR with MGT
Remarks
Recommendations
127
6.C & F Operations
128
12
Observation rating
6.1.1 C & F Operations – Quantity Differences HIGH MED LOW
Key Observations
• We have verified the weekly labour payments and its subsequent billing to RCL for the period 26th June 2019 to 25th September
2019 for all the godowns. The top 5 godowns with differences noted in the amounts paid to the labour contractor against its
billing to RCL are as given below :
Loading Unloading Crossing Net

Godown
Godown Name Excess/(Short) Excess/(Short) Excess/(Short) Excess/(Short)
Code
billed to RCL billed to RCL billed to RCL billed to RCL
1T23 KANCHEEPURAM 2 (303) (281) 303 (281)
1A43 OU COLONY (158) - - (158)
1K11 KANAKAPURA ROAD - - 700 700
1K30 BANNIMANTAPA - 1,578 - 1,578
1T20 ARCOT (1,411) 2,314 1,628 2,531
• Godown wise summary of the differences noted is given in the below annexure:
Differences
Summary
129
Observation rating
6.1.2 C & F Operations – Quantity Differences HIGH MED LOW
Key Observations
• The summary of differences noted in the amounts paid to the labour contractor against its billing to RCL is as given below:
Particulars Quantity Amount
Short billed to RCL (47.45) (3,051.70)

Loading
Excess billed to RCL 26.10 1,833.50
Total (21.35) (1,218.20)
Short billed to RCL (66.15) (4,198.50)
Unloading
Excess billed to RCL 148.65 9,561.53
Total 82.50 5,363.03
Short billed to RCL (9.30) (671)
Crossing
Excess billed to RCL 68.75 4,129
Total 59.45 3,457.70
Grand Total[Excess/(Short) billed] 120.6 7,602.53
• The day wise details of differences are given in the below annexure:
Differences
130
Observation rating
6.2 C & F Operations HIGH MED LOW
Potential impact/ Risk(s) faced
• Revenue leakage in instances of short claims.
Recommendations
• To reconcile the quantities for which labour payments are made with monthly claims and a working sheet for the same is to be maintained.
131
Internal Audit Report for the Quarter July 2019 to September 2019.
7.Pending Insurance Claims & Accidents
13
132
2
Observation rating
7.1 Pending Insurance Claims HIGH MED LOW
Key Observations Potential impact/ Risk(s) faced

• During the quarter 25 insurance claims were made, out of which 11 is yet to be settled. The • The insurance company might not process
position of claim settlement is as on 5th December, 2019. A list of such pending claims and the claims if there are unreasonable delays
the reasons for same are as given in the annexure below: in submission of the bills and may result in
a loss to the company.
Vehicle No Unit Date of accident Remarks `
KL14S9934 Hassan 08-07-2019 PROCESSING AT NEW INDIA Recommendations

TS29T5844 kodad 15-07-2019 PROCESSING AT NEW INDIA • The long pending claims made/ to be made
be periodically monitored.
TN70AB6132 Coimbatore 28-07-2019 PROCESSING AT NEW INDIA
KL14S9941 Hassan 24-08-2019 PROCESSING AT NEW INDIA

AP21TZ7151 Srikakulam 26-08-2019 PROCESSING AT NEW INDIA
MH25U1075 Coimbatore 30-08-2019 PROCESSING AT NEW INDIA
AP39V7636 Vadamalapeta 17-09-2019 PROCESSING AT NEW INDIA
AP21TZ7324 Srikakulam 22-09-2019 BILL CHECK AT UNDER PROCESS
TN70AC0526 Coimbatore 24-09-2019 BILL 'S VERIFICATION BY PURCHASE
AP21TB4753 Vadamalapeta 24-09-2019 PROCESSING AT NEW INDIA
AP39Y5151 Vadamalapeta 27-09-2019 PROCESSING AT NEW INDIA
133
Observation rating
7.1 Pending Insurance Claims HIGH MED LOW
Key Observations
• A statistical analysis of accidents occurred, model-wise and unit-wise, during October, 2018 to September, 2019 is given in the annexure
below:
Accidents
Comparison
• We have made an analysis on the Cost for the accidents occurred from July’19 to September'19. A summary is given below and the vehicle-
wise details are attached in the annexure below:
Particulars Amount Amount
Actual Repair Cost 36,80,543
(-) Insurance Claim (40,07,449)

Received/Receivable
Accident
(3,26,906)
Expenditure
Notional Interest @ 12% 1,36,883
Notional Loss of Revenue
Freight Income 1,28,92,586
(-) Saving in Expenditure (69,33,541)
59,59,135
Total Cost of Accident 57,96,112
• The calculations are made on certain assumptions. The assumptions are attached here:
Assumptions
134
8.Statutory Compliances
13
135
5
Statutory Compliances- Acts Covered
We have broadly reviewed compliance with the following:
• Employees Provident Fund Act 1952
• Employee State Insurance Act
• Professional Tax
• Goods and Services Tax
• Income Tax Act 1961
• Companies Act, 2013
136
Policy Procedural Regulatory a System Deficiency
Observation rating
8.1 Remittance of Provident Fund HIGH MED LOW
Key Observations
• As per PF and Misc. Provisions Act, the employer shall pay the PF contributions within 15 days from the last day of the calendar month in
which the contributions fall due.
• Details of Provident Fund contribution payable as per books and paid as per challan are as given below:
Employees Employer's Employer’s

Employees
Contribution Excess Contribution Contribution Excess Due date for Date of
Month Contribution paid Annexure
payable as per /(Short) paid payable as per paid as per /(Short) Paid payment payment
as per challan
books books challan
July-19 9,77,124 13,35,132 3,58,008 14,46,393 14,46,393 - 15/08/2019 10/08/2019

July
Aug-19 9,79,501 13,38,466 3,58,965 14,50,005 14,50,005 - 15/09/2019 05/09/2019

Aug
Sept-19 9,83,898 13,35,786 3,51,888 14,47,102 14,47,102 - 15/10/2019 09/10/2019

Sep
Total 10,68,861 -
137
Observation rating
Key Observations
• Details of difference in number of employees as per pay-sheet & challan are as given below:
No. of employees in No of employees in
Month Difference
pay sheet Challan
July-19 1,285 1,285 -
Aug-19 1,290 1,290 -
Sept-19 1,291 1,291 -
• Details of PF contribution payable as per our calculation and as per books are as given below:
Employees Employees Employer’s
Excess Employer's Excess
Contribution as Contribution Contribution
Month /(Short) Annexure Contribution as per /(Short) Annexure
per our payable as per payable as per
deduction our calculation deduction
calculation books books
July-19 13,26,300 9,77,124 (3,49,176) 14,36,838 14,46,393 9,577

July July
Aug-19 13,31,719 9,79,501 (3,52,218) 14,42,710 14,50,005 7,295

Aug Aug
Sept-19 13,35,786 9,83,898 (3,51,888) 14,47,125 14,47,102 (24)

Sept Sept
Total (10,53,282) 16,848
138
Observation rating
Key Observations
• It is observed that employee contribution is excess paid by Rs 15,579/- and employer contribution is excess paid by Rs 16,848/-.Details of PF
contribution payable as per our calculation and Paid as per challan are as given below:
Employees Employer's Employer’s

Employees
Contribution Excess Contribution as Contribution Excess
Month Contribution as per Annexure Annexure
Paid as per /(Short) Paid per our paid as per /(Short) Paid
our calculation
challan calculation challan
July-19 13,26,300 13,35,132 8,832 14,36,838 14,46,393 9,577

July July
Aug-19 13,31,719 13,38,466 6,747 14,42,710 14,50,005 7,295

Aug Aug
Sept-19 13,35,786 13,35,786 - 14,47,125 14,47,102 (24)

Sept Sept
Total 15,579 16,848
139
Observation rating
8.2 Remittance of ESI HIGH MED LOW
Key Observations
• As per Employees State Insurance Act, 1948 the employer shall pay the ESI contributions within 15 days from the last day of the calendar
month in which the contributions fall due.
• It is observed that ESI amounting to Rs.690/- is excess paid as per books. Details of ESI contribution payable as per books and paid as per
challan are as given below:
Employee Employer
Employee Employer
contribution Excess Contribution Excess Due Date of Date of
Month Contribution Annexure Contribution
paid as per /(Short) Paid paid as per /(Short) Paid Payment Payment
as per books as per books
challan challan
July-19 1,03,117 1,03,434 317 4,48,215 4,48,215 - 15-08-2019 14-08-2019

July
Aug-19 1,03,415 1,02,977 (438) 4,46,234 4,46,234 - 15-09-2019 12-09-2019

Aug
Sept-19 1,04,280 1,03,711 (569) 4,49,415 4,49,415 - 15-10-2019 14-10-2019

Sept
Total (690) -
140
Observation rating
Key Observations
• It is observed that employee contribution is excess deducted by Rs.1,698/- and employer contribution is excess deducted by Rs.4,376/-Details
of ESI contribution payable as per our calculation and as per books are as given below:
Employee
Employee Employer Employer
Contribution as Excess/(Short) Excess/(Short)
Month contribution as Annexure Contribution as per Contribution as per
per our deduction deduction
per books our calculation books
calculation
July-19 1,02,599 1,03,117 518 4,44,594 4,48,215 3,621

July
Aug-19 1,02,808 1,03,415 607 4,45,500 4,46,234 736

Aug
Sept-19 1,03,707 1,04,280 573 4,49,397 4,49,415 19

Sept
Total 1,698 4,376
141
Observation rating
Key Observations
• Details of ESI employee contribution payable as per our calculation and paid as per challan are as given below:
July'19 Aug’19 Sept’19
Particulars
Amount Amount Amount Amount Amount Amount
1 ESI payable as per our calculation 5,47,913 5,48,305 5,53,103
2 ESI paid as per challan 5,52,211 5,49,779 5,53,687
Excess/ (Short) paid 5,018 1,474 584
Reconciliation:
Add: ESI excess deducted and paid 4,456 907 23
Add: Difference in calculation as per portal(Round off Diff) 562 568 560
Total difference 5,018 1,474 584
Annexure
July Aug Sept
142
Observation rating
8.3.1 Remittance of Professional Tax HIGH MED LOW
Key Observations
Professional Tax
• Summary of month wise remittances of Professional Tax as per books is annexed below:
Amount Payable Amount Paid as Excess/(Short) Due Date of Date of

Month Annexure Month Location Delay in Days
as per books per challan Paid Payment Payment
Hyderabad 10-08-2019 09-08-2019 -
July-19 52,500 52,550 50
July Kodad 10-08-2019 09-08-2019 -
July-19
Puttur 10-08-2019 09-08-2019 -
Aug-19 53,750 54,450 700 Bangalore 10-08-2019 09-08-2019 -
Aug
Hyderabad 10-09-2019 09-09-2019 -
Sept-19 52,950 53,300 350 Kodad 10-09-2019 09-09-2019 -
Sept
Aug-19
Puttur 10-09-2019 09-09-2019 -
Total 1,100
Bangalore 10-09-2019 09-09-2019 -
Hyderabad 10-10-2019 09-10-2019 -
• Details of difference in number of employees as per
Kodad 10-10-2019 09-10-2019 -
pay-sheet & challan is as given below: Sept-19
Puttur 10-10-2019 09-10-2019 -
Bangalore 10-10-2019 09-10-2019 -
Head Count
143
Observation rating
Key Observations
Professional Tax
• Summary of month wise Professional Tax as per books and as per our calculations is annexed below:
Amount Payable as Amount Payable as Excess/(Short)

Month Annexure
our Calculation per books Deduction
July-19 59,250 52,500 (150)

July
Aug-19 53,850 53,750

(100)
Aug
Sept-19 53,050 52,950

(100)
Sep
Total (350)
144
Observation rating
Key Observations
Professional Tax
• Summary of month wise professional tax as per our calculations and paid as per challan is annexed below:
Amount Payable as per Amount Paid as per

Month Excess/(Short) Paid Annexure
our calculations challan
July-19 52,650 52,550 (100)

July
Aug-19 53,850 54,450 600

Aug
Sept-19 53,050 53,300 250

Sept
Total 750
145
Observation rating
Key Observations
• Professional Tax for Tamilnadu for the period 1st April’19 to 30th September’19 as per Books and as per challan is given below:
Amount Payable Amount Paid Excess/(Short) Due Date of

Period Annexure Date of Payment
as per books as per Challan Paid Payment
1st Apr'19 to 30th

1,79,688 1,73,983 (5,705) 30-09-2019 09-09-2019
Sept’19
Payable V/s Paid
• Professional tax for Tamilnadu for the period of 1st April’19 to 30th September’19 as per our calculations and paid is given below:
Amount Payable
Amount Paid Excess/(Short)
Period as per our Annexure
as per Challan Paid
calculations
1st Apr'19 to 30th
1,99,636 1,73,983 (25,653)
Sept'19
Cal V/s Paid
• Professional tax for Tamilnadu for the period of 1st April’19 to 30th September’19 as per our calculations and books is given below:
Amount
Amount Payable Excess/(Short)
Period Payable as per Annexure
as our calculation deduction
books
1st Apr'19 to 30th
1,99,363 1,79,688 (19,948)
Sept'19 Payable V/s Cal
146
Observation rating
8.4.1 Goods and Services Tax HIGH MED LOW
Key Observations
• The various recoveries made from the drivers are supply of services and GST is payable on such recoveries. As per clause (e) of paragraph 5
schedule II of the CGST Act 2017, “agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do and act” is
considered as Supply of service under Section 7(d) of the Act and the recoveries made, fall under this category. It is observed that GST is not
being charged on such recoveries. The summary of differences is given below :
Monthly summary of GST (Short)/Excess paid
GST Payable
GST Paid as per Excess/(Short)
Month as per our
GSTR-3B paid
calculation
July 3,24,184 3,24,672 488
August 3,73,395 3,73,395 -
September 3,14,413 3,14,794 381
Total 869
147
Observation rating
Key Observations
Summary of differences – July
GST Payable
GST Paid as
State GST head as per our Excess/(Short) paid
per GSTR-3B
calculation
CGST 40,001 40,001 -
SGST 40,001 40,001 -
Andhra Pradesh
IGST 67,802 68,291 488
Total 1,47,804 1,48,292 488
CGST 11,670 11,670 -
SGST 11,670 11,670 - July
Karnataka
IGST 10,523 10,523 -
Total 33,862 33,862 -
CGST 36,078 36,078 -
SGST 36,078 36,078 -
Tamil Nadu
IGST 19,730 19,730 -
Total 91,887 91,887 -
CGST 14,218 14,218 -
SGST 14,218 14,218 -
Telangana
IGST 22,196 22,196 -
Total 50,632 50,632 -
148
Observation rating
Key Observations
Summary of differences – August
GST Payable as
GST Paid as
State GST head per our Excess/(Short) paid
per GSTR-3B
calculation
CGST 34,536 34,536 -
SGST 34,536 34,536 -
Andhra Pradesh
IGST 57,604 57,604 -
Total 1,26,676 1,26,676 -
CGST 9,050 9,050 -
SGST 9,050 9,050 - Aug
Karnataka
IGST 8,443 8,443 -
Total 26,542 26,542 -
CGST 70,630 70,630 -
SGST 70,630 70,630 -
Tamil Nadu
IGST 26,647 26,648 -
Total 1,67,908 1,67,908 -
CGST 16,824 16,824 -
SGST 16,824 16,824 -
Telangana
IGST 18,620 18,620 -
Total 52,268 52,268 -
149
Observation rating
Key Observations
Summary of differences – September
GST Payable as
GST Paid as
State GST head per our Excess/(Short) paid
per GSTR-3B
calculation
CGST 48,118 48,118 -
SGST 48,118 48,118 -
Andhra Pradesh
IGST 72,400 72,400 -
Sept
Total 1,68,636 1,68,636 -
CGST 12,044 12,044 -
SGST 12,044 12,044 -
Karnataka
IGST 13,001 13,001 -
Total 37,089 37,089 -
CGST 11,369 11,369 -
SGST 11,369 11,369 -
Tamil Nadu
IGST 7,776 7,776 -
Total 30,515 30,515 -
CGST 29,798 29,798 -
SGST 29,798 29,798 -
Telangana
IGST 18,576 18,957 381
Total 78,172 78,553 381
150
Observation rating
Key Observations
• It is observed that GSTIN of ALPL is not found on invoices/ wrongly mentioned on Invoice and GST input is claimed. Details of the same are as
given below:
Number of
CGST SGST IGST Total GST
invoices
GSTIN Missing on
4 600 600 - 1,200 Invoices
• It is observed that GST input is short/excess claimed on the purchases made. Details of the same are as given below:
Particulars CGST SGST IGST

Short accounted as
- - 1,996
per books
Excess accounted Short/Excess
(23) (23) (847) Input Claimed
as per books
Total (23) (23) 1,149
151
Observation rating
Key Observations
• It is Observed that GST pertaining to some of the purchases of goods and services has not been claimed as input during the Quarter. Details of
the same are given in the below annexure:
No of
Input-CGST Input-SGST Input-IGST Total GST
Purchases
GST Input not
7 1,299 1,299 7,179 9,777
claimed
• It is Observed that in few instances GST input is accounted on freight charges even though the vendor did not charge GST on invoice.
Details of the same are given below.
Difference in Difference in Difference in

State
Cost GST PV
GST difference
AP 1,500 261 261 due to freight
152
Observation rating
Key Observations
• It is observed that GST input is accounted under incorrect ledger account head i.e. input under IGST is accounted as CGST/SGST
and vice versa amounting to ₹ 30,582/-. Details of the same are as given below :
IGST instead of CGST/SGST

State Month
CGST/SGST instead of IGST
AP July - 1,854
TN July - 28,728
• It is observed that GST input is accounted under incorrect location amounting to ₹ 45,271/-. Details of the same are as given below :
State State to be CGST/SGST

Month
accounted Accounted instead of IGST
Wrong Location
Sept AP TN 45,271
153
Observation rating
Key Observations
• It is observed that in purchase invoices GSTIN of ALPL state is different from the state in which actual supply of goods has taken place, as a
result the inputs claimed in such instances will be ineligible. Details of the same are as given below:
Month State Ineligible Input

CGST SGST IGST
AP - - -
TN - - 11,232
July,2019
TS - - -
KA - - -
Total - - 11,232
AP 9,91,300 9,91,300 19,789 Ineligible input
TN - - -
August,2019
TS - - -
KA - - -
Total 9,91,300 9,91,300 19,789
AP - - 1,956
TN - - -
September,2019
TS 2,930 2,930 -
KA - - -
Total 2,930 2,930 1,956 154
Observation rating
Return filing details
• GSTR 1 filing details: State Return Period Due date of filing Date of filing Delay in days
July'19 11-08-2019 10-08-2019 -
Andhra Pradesh August'19 11-09-2019 11-09-2019 -
September'19 11-10-2019 11-10-2019 -
July'19 11-08-2019 10-08-2019 -
Telangana August'19 11-09-2019 11-09-2019 -
September'19 11-10-2019 11-10-2019 -
July'19 11-08-2019 10-08-2019 -
Karnataka August'19 11-09-2019 11-09-2019 -
September'19 11-10-2019 11-10-2019 -
July'19 11-08-2019 10-08-2019 -
Tamil Nadu August'19 11-09-2019 11-09-2019 -
September'19 11-10-2019 11-10-2019 -
July'19 11-08-2019 10-08-2019 -
Kerala August'19 11-09-2019 11-09-2019 -
September'19 11-10-2019 11-10-2019 -
July'19 11-08-2019 10-08-2019 -
Orissa August'19 11-09-2019 11-09-2019 -
September'19 11-10-2019 11-10-2019 -
July'19 11-08-2019 10-08-2019 -
Maharashtra August'19 11-09-2019 11-09-2019 -
September'19 11-10-2019 11-10-2019 -
July'19 11-08-2019 10-08-2019 -
Goa August'19 11-09-2019 11-09-2019 -
September'19 11-10-2019 11-10-2019 -
July'19 11-08-2019 10-08-2019 -
Pondicherry August'19 11-09-2019 11-09-2019 - 155
September'19 11-10-2019 11-10-2019 -
Observation rating
Return filing details

State Return Period Due date of filing Date of filing Delay in days
• GSTR 3B filing details: July'19 22-08-2019 20-08-2019 -
Andhra Pradesh August'19 20-09-2019 20-09-2019 -
September'19 20-10-2019 19-10-2019 -
July'19 22-08-2019 20-08-2019 -
Telangana August'19 20-09-2019 20-09-2019 -
September'19 20-10-2019 19-10-2019 -
July'19 22-08-2019 20-08-2019 -
Karnataka August'19 20-09-2019 20-09-2019 -
September'19 20-10-2019 19-10-2019 -
July'19 22-08-2019 20-08-2019 -
Tamil Nadu August'19 20-09-2019 20-09-2019 -
September'19 20-10-2019 19-10-2019 -
July'19 22-08-2019 20-08-2019 -
Kerala August'19 20-09-2019 20-09-2019 -
September'19 20-10-2019 19-10-2019 -
July'19 22-08-2019 20-08-2019 -
Orissa August'19 20-09-2019 20-09-2019 -
September'19 20-10-2019 19-10-2019 -
July'19 22-08-2019 20-08-2019 -
Maharashtra August'19 20-09-2019 20-09-2019 -
September'19 20-10-2019 19-10-2019 -
July'19 22-08-2019 20-08-2019 -
Goa August'19 20-09-2019 20-09-2019 -
September'19 20-10-2019 19-10-2019 -
July'19 22-08-2019 20-08-2019 -
Pondicherry August'19 20-09-2019 20-09-2019 -
156
September'19 20-10-2019 19-10-2019 -
Observation rating
8.5 Remittance of TDS HIGH MED LOW
Key Observations
• The company is generally regular in depositing the TDS amounts with the Government. A brief Section wise monthly summary is annexed
below:
TDS
• Details of Quarterly E-TDS return in Form no. 26Q and 24Q for the quarter ending 30th September’2019 are as given below:
Tax Deposited as Tax Deposited Excess/(Short) Tax Deducted Tax Deducted Excess/(Short) Acknowledgement
Form Due Date
per Return as per Books Reported as per Return as per Books Reported Date
24Q 3,50,304 3,50,304 - 3,50,304 3,50,304 - 31/10/2019 19-10-2019
26Q 29,81,358 29,71,358 10,000 29,81,358 29,79,857 1,501 31/10/2019 19-10-2019
157
Observation rating
8.5 Remittance of TDS HIGH MED LOW
Key Observations
• An amount of ` 2,27,358/- from July'19 to September'19 is paid to RCL towards Corpus Fund. It is explained that the same is collected by RCL
based on the Tonnage carried by transporters towards development of roads. The same is considered as an expenditure by ALPL. Prima facie,
it appears to be in the nature of voluntary contribution not arising out of contractual agreements. The deduction of the same as an
expenditure under Income Tax Act needs to be reviewed. Further, applicability of provisions of TDS also needs to be reviewed. In the event a
view is taken that TDS is required to be done, non deduction of the same will negate the claim of expenditure to the extent of 30%. Details of
the amount paid are given below.
158
Observation rating
8.6 Cash transactions exceeding ` 10,000 HIGH MED LOW
Key Observations
• Section 40A(3)(a) of the Income-tax Act, 1961 provides that any expenditure incurred in respect of which payment is made in a sum
exceeding Rs 10,000/- in a single day otherwise than by an account payee cheque drawn on a bank or by an account payee bank draft or use
of electronic clearing system through a bank account, shall not be allowed as a deduction.
• Details of cash payments exceeding Rs 10,000/- in a single day are given below :
Details of No of Transactions and total amount

Unit Annexure
Exceeding Rs.10,000/-.
No of Transactions 1
Kodad
Total Amount ` 12,750 Kodad
Peapully
Total Amount ` 1,48,000 Peapully
Srikakulam
Total Amount ` 10,862 Srikakulam
Basavakalyan
Total Amount ` 43,000 Basavakalyan
159
9.Finance & Accounts
16
160
0
Observation rating
9.1 Finance and Accounts HIGH MED LOW
Key Observations
During the course of our audit we have observed the following :
 Bank Reconciliation Statement:
• It is observed that there are certain entries in the reconciliation statement which have not been cleared for more than 90 days as on
25th November 2019. These represent stale cheques which needs to be reversed or entries for which clearing date is not entered in the
BRS. Details are given in the annexure below:
Uncleared
Cheques
 Late Delivery Charges

 Late Delivery charges of Rs.3,48,000/- had been paid to RCL towards delay in delivery of goods for the period from July 2019 to
September 2019 against an Invoice raised by RCL. The details as to the late delivery of goods against which trips are not mentioned in the
invoice and therefore the same could not be verified.
 It is suggested that in the web portal necessary provision need to be incorporated giving the details of the late deliveries against the
scheduled date of deliveries. This will enable to cross verify the claims of late deliveries by RCL.
161
10.Unit Visit
16
162
2
10.1 Unit Visit – Puttur Observation rating
Key Observations HIGH MED LOW
• We have made a surprise visit to Unit-3 Puttur on 14-December-2019. Following are our observations:
• We have physically verified the cash on hand, the differences noted are as below:
Balance as per Difference
Date and Time Physical Cash Balance Remarks Snapshots
Books [(Short)/Excess]
14th Dec 2019
₹ 2,37,614 ₹ 2,37,609 (5/-)
U3 Cash
• We have also carried physical verification of stock held at stores. We have verified 104 items and 4 differences were found, the details
are given below:
• We have also carried out physical verification of tyres and found 110 tyres short. However, the reason for the difference is reconciled
and is annexed herewith.
Tyres Reco
• On verifying the diesel stock at the unit, we had noted an short stock of 741.89 Ltrs. Details are given in the annexure below.
Particulars (Qty in Ltrs)
Physical stock as on 14/12/2019 18,069.10
Stock of Diesel as per SAP (18,810.99)
(Short)/Excess Stock (741.89)
163
10.2 Unit Visit – Hosur Observation rating
• We have made a surprise visit to Unit-4 Hosur on 11-December-2019. Following are our observations:
Balance as per Physical Cash Difference
Date and Time Remarks Snapshots
Books Balance [(Short)/Excess]
11th December,
2019 09:00AM ₹ 51,560 ₹ 51,558 (2/-)
U4 Cash
are given below:
• We have also carried out physical verification of tyres and found 406 tyres short. However, the reason for difference is explained and
3 tyres are found to be excess after reconciliation. Details are given below
Tyres reco
• On verifying the diesel stock at the unit, we had noted an Excess stock of 2,531.75 Ltrs. Details are given in the annexure below.
Diesel Reco
164
10.3 Unit Visit – Coimbatore Observation rating
• We have made a surprise visit to Unit-7 Coimbatore on 13-December-2019. Following are our observations:
13th December
2019 09:30 AM ₹ 37,253 ₹ 37,253 -
U7 Cash
are given below:
• We have also carried out physical verification of tyres and 114 tyres were found short . However, the reason for difference is explained
Details are given below.
Tyres Reco
• On verifying the diesel stock at the unit, we had noted an short stock of 1,438.87 Ltrs. Details are given in the annexure below.
Diesel Reco
165
10.4 Unit Visit – U 7 Tyre Retreading Plant Policy Procedural a Regulatory System Deficiency
Observation rating
• We have made a surprise visit to Unit-7 Tyre retreading plant of Coimbatore on 13-December-2019. We have identified 31 differences in stock
as per books and physical stock out of 81 items, the details are given in the annexure below
Stock Differences
• We have also carried out physical verification of tyres and 70 tyres were found Short . However, the reason for difference is explained and
1 tyre are found to be Short after reconciliation. Details are given below
Tyres Reco
166
10.5 Unit Visit – Hassan Observation rating
• We have made a surprise visit to Unit-9 Hassan on 12th December2019. Following are our observations:

12th December
2019 09:00AM ₹ 66,254 ₹ 66,255 1
U9 Cash
16
7
11.Other Areas Covered
16
168
8
Observation rating
11.1 Punctual Incentives HIGH MED LOW
Key Observations
During the course of our audit we have covered the following other areas:
• Incentive Payments:
• Punctual Incentives: Punctual Incentives are paid to certain eligible employees in the maintenance & Tyres department. Based on the
incentive circular and the data obtained from SAP we have verified whether Punctual Incentive payments. Summary of Discrepancies
observed Unit wise for the months of July to September 2019 is as follows.
Eligible but not
Unit Not eligible but paid Eligible and excess paid
paid
UNIT-1, KODAD 1,500 (500) -
UNIT-2, PEAPULLY 2,000 (1,000) -
UNIT-3, PUTTUR 2,000 (3,000) -
750 (3,000) - Annexure
UNIT-4, HOSUR
HEAD OFFICE 7,000 (2,000) -
BALANAGAR 750 - (500)
BASAVAKALYAN 10,250 - -
Hasan 11,250 - -
RMC-TELLAPUR 3,000 - -
Total 38,500 (9,500) (500)
169
Observation rating
11.2 Diesel Reconciliation HIGH MED LOW
Key Observations
• Diesel Reconciliation of Stock ledgers : Upon the verification of the own bunks diesel closing stock balances as per books and as per the
certified copies received from the units few discrepancies were found. Details of the same are as given below:
Opening Stock As on Closing Stock as on
Purchases for the Q2 Consumption For Q2
01.07.2019 30.09.2019
Own -
As Per As Per As Per As Per Difference Remarks
bunks
As per SAP Certified As per SAP Certified As per SAP Certified As per SAP Certified
Copies Copies Copies Copies
Closing diesel difference for the

Unit 1 41,653 41,683 6,44,000 6,44,000 6,67,296 6,67,296 32,243 32,273 (29) month of March'19 is not
adjusted.
Unit 2 41,373 40,599 11,31,975 11,31,975 11,67,838 11,67,838 50,573 49,799 774 month of December'18 is not
adjusted.
Unit 3 14,809 14,809 5,91,985 5,91,985 5,94,995 5,94,995 25,373 25,373 -

Unit 4 8,255 9,035 8,64,000 8,64,000 8,64,422 8,64,422 13,676 14,456 (780) month of December'18 is not
adjusted.
Unit 7 29,596 27,879 2,72,000 2,72,000 2,86,374 2,86,374 15,755 14,038 1,717 month of October'18 is not
adjusted.
170
Observation rating
11.2 Diesel Reconciliation HIGH MED LOW
Key Observations
• Monthly Diesel Reconciliation of Stock ledgers : Upon the verification of the own bunks diesel closing stock balances as per books and as
per the certified copies received from the units few discrepancies were found. Details of the same are as given below:
Closing stock as per

Closing stock as per Difference Books V/s
Month Own -bunks Certification copy received
books(QTY) Certified Copies
from units(QTY)
Unit 1 32,243 32,273 (29)
Unit 2 50,573 49,799 774
July’19 Unit 3 25,373 25,373 -
Unit 4 13,676 14,456 (780) Annexure
Unit 7 15,755 14,038 1,717
Unit 1 5,403 5,433 (30)
Unit 2 57,807 37,033 20,774
August'19 Unit 3 9,127 9,127 -
Unit 4 38,314 39,094 (780)
Unit 7 26,239 24,522 1,717
Unit 1 18,357 18,387 (30)
Unit 2 5,530 4,756 774
September'19 Unit 3 11,799 11,799 -
Unit 4 7,833 8,613 (780)
Unit 7 15,223 13,505 1,717
171
Observation rating
11.3 Other areas covered HIGH MED LOW
Key Observations
During the course of our audit we have covered the following other areas
• Vigilance Incentives : We have verified the vigilance incentives paid for vigilance officers and no discrepancies were noted.
• RCL Reconciliation: We have verified the RCL reconciliation for the month of September 2019, and no discrepancies were noted.
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Arunachala Logistics Private Limited

Internal Audit Report

Number of Number of issues having Observation rating

8 Finance and accounts 1 - - 1

1. Follow-up Report for Q1 of FY 2019-2020

Short Payment (6,126) (6,126) - Details are given in Succeeding Slide

Mismatch in Cost on Invoice

Short Billed To RCL 1,234 - 1,234

Short Remittance (3,792) -

Short Remittance (438)

Short Remittance (1,000) - (1,000)

Ineligible Input 5,400 - 5,400

Input Not Claimed 5,590 - 5,590

Short Input Claimed 7,927 - 7,927

Excess Input Claimed on Freight 198 - 198

Punctual Incentives - Short Paid 28,250 - 28,250

Diesel Recovery Diesel Incentive

Recovery Reported (42,510) 10,729 Incentive Reported (6,126) 26,867

Recovered/ Paid (11,521) - Recovered/ Paid (6,126) -

Not Recovered/ Not Recovered/

Diesel Recovery Diesel Incentive

Recovery Reported (502) - Incentive Reported (941) -

Recovered/ Paid (502) - Recovered/ Paid (941) -

Not Recovered/ Not Recovered/

Diesel Recovery Diesel Incentive

Recovery Reported (23,037) 3,150 Incentive Reported (765) 6,165

Recovered/ Paid - - Recovered/ Paid (765) -

Not Recovered/ Not Recovered/

Diesel Recovery Diesel Incentive

Recovery Reported (710) 1,273 Recovery Reported - 7

Recovered/ Paid (710) - Recovered/ Paid - -

Not Recovered/ Not Recovered/

Diesel Recovery Diesel Incentive

Recovery Reported (15,879) 5,422 Incentive Reported (4,420) 18,512

Recovered/ Paid (10,309) - Recovered/ Paid - -

Not Recovered/ Not Recovered/

Diesel Recovery Diesel Incentive

Recovery Reported (2,382) 754 Incentive Reported - 2,183

Recovered/ Paid - - Recovered/ Paid - -

Not Recovered/ Not Recovered/

Diesel Recovery Diesel Incentive

Recovery Reported - 130 Incentive Reported - -

Recovered/ Paid - - Recovered/ Paid - -

Not Recovered/ Not Recovered/

Particulars Excess Payment to Driver Short Payment to Driver

Short / Excess payment Reported (9,254) 89,606

Short / Excess Incentive

Short / Excess incentive not rectified (5,487) 89,606

Driver Performance Incentive Driver Performance Incentive

Short / Excess Short / Excess

Short / Excess Short / Excess

Short / Excess Short / Excess

Driver Performance Incentive Driver Performance Incentive

Short / Excess Short / Excess

Short / Excess Short / Excess

Driver Performance Incentive Driver Performance Incentive

Short / Excess Short / Excess