Arunachala Logistics Private Limited

Arunachala Logistics Private Limited
Internal Audit Report

For the Quarter January 2018 to March 2018
CA Ajay Mehta
Chartered Accountant
Internal Audit Report for the Quarter January 2018 to March 2018
Table of Contents
1. Operations
2. Procurement (including Tyres)
3. Driver Performance Incentives
4. Maintenance
5. C & F Operations
6. Pending Insurance Claims & Accidents
7. Statutory Compliances
8. Finance and Accounts
9. Unit Visits
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 12 3 6 3
2 Procurement 8 2 6 -
3 Driver Performance 5 2 2 1
Incentives
4 Maintenance 4 - - 4
5 2 - 2 -
C & F Operations
Pending Insurance
6 1 - 1 -
claims
7 28 2 24 2
Statutory compliances
8 6 - 5 1
Finance and accounts
9 Unit Visit 5 - - 5
10 Other areas 6 - 3 3
3
1.Operations
4
Operations – Diesel Recovery
Snapshot of the Trip sheets closed during the Quarter ending March 2018
Unit No of Trips Closed No of Trips Verified Percentage of Verification
Kodad 6,139 6,139 100.00%
Peapully 3,437 3,437 100.00%
Puttur 2,270 2,270 100.00%
Hosur 3,714 3,714 100.00%
Coimbatore 776 776 100.00%
Total 16,336 16,336 100.00%
No of Trips Verified 5% Kodad

Peapully
23% 37% Puttur
14% Hosur
21% Coimbatore
5
Operations – Diesel Incentive
Snapshot of the Slips generated during the Quarter ending March 2018
Unit No of Slips generated No of Slips Verified Percentage of Verification
Kodad 876 876 100.00%
Peapully 594 594 100.00%
Puttur 358 358 100.00%
Hosur 553 553 100.00%
Coimbatore 160 160 100.00%
Total 2,541 2,541 100.00%
No of Slips Verified 6%
Kodad
Peapully
35% Puttur
22%
14% Hosur
23%
Coimbatore
6
Policy Procedural a Regulatory System Deficiency
Observation rating
1.1 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.
7
Observation rating
Key Observations
Amount in `
Consolidated Excess/Short Diesel Recovery and Incentive
Diesel Recovery Diesel Incentive
Unit As per audit As per diesel Net Excess / As per diesel Net (Excess)
As per audit workings
workings recovery ledger (Short) Recovery incentive ledger /Short Incentive
34,44,379 34,51,881 1,502 35,34,055 35,45,334 (11,279)
Break Up Break Up
Consolidated
Short Recovery made (32,375) Excess Incentive paid (24,240)
Excess Recovery made 33,878 Short Incentive paid 12,960
 Unit wise Summaries are given in the succeeding slides along with links to the detailed trip wise diesel recovery/incentive calculations.
 Out of the above short recoveries, an amount of ` 12,786/- was subsequently recovered. Also, for the excess incentives, an amount of
` 18,478/- was also subsequently recovered.
8
Observation rating
Key Observations - Kodad
Amount in `
Unit-1 Kodad - Excess/Short Diesel Recovery and Incentive
Unit As per audit As per diesel Net Excess / As per diesel Net (Excess) /
workings recovery ledger (Short) Recovery incentive ledger Short Incentive
10,86,513 10,98,847 12,335 21,29,968 21,35,981 (6,012)
Kodad Break Up Break Up

Link to Driver-Wise summary

 Out of the above short recoveries, an amount of ` 1,748/- was subsequently
recovered. Also, the excess incentives were fully recovered.
9
Observation rating
Key Observations – Peapully
Amount in `
Unit-2 Peapully - Excess/Short Diesel Recovery and Incentive
Unit As per audit As per diesel Net Excess / As per diesel Net (Excess) /
workings recovery ledger (Short) Recovery incentive ledger Short Incentive
9,81,454 9,65,850 (15,604) 6,67,284 6,72,842 (5,198)

Break Up Break Up
Peapully

 Out of the above short recoveries, an amount of ` 6,801/- was subsequently
recovered. Also, for the excess incentives, an amount of ` 3,937/- was also
subsequently recovered.
10
Observation rating
Key Observations - Puttur
Amount in `
Unit-3 Puttur - Excess/Short Diesel Recovery and Incentive
Net Excess /
Unit As per audit As per diesel As per diesel Net (Excess) /
(Short) As per audit workings
workings recovery ledger incentive ledger Short Incentive
Recovery
4,67,238 4,65,571 (1,667) 4,50,135 4,50,064 70
Break Up Break Up
Puttur
Short Recovery made (1,669) Excess Incentive paid (291)
Excess Recovery made 2 Short Incentive paid 361
 Out of the above, all the short recoveries and excess incentives were Link to Driver-Wise summary
subsequently recovered
11
Observation rating
Key Observations - Hosur
Amount in `
Unit-4 Hosur - Excess/Short Diesel Recovery and Incentive
Net Excess /
Recovery
5,83,761 5,86,414 2,653 2,52,564 2,52,898 (334)
Break Up Break Up
Hosur
Short Recovery made (2,205) Excess Incentive paid (358)
Excess Recovery made 4,857 Short Incentive paid 39

 Out of the above, all the short recoveries and excess incentives were
12
Observation rating
Key Observations - Coimbatore
Amount in `
Unit-7 Coimbatore - Excess/Short Diesel Recovery and Incentive
Net Excess /
Recovery
3,25,413 3,29,199 3,787 34,105 33,910 195
Break Up Break Up
Coimbatore
Short Recovery made (46) Excess Incentive paid (317)
Excess Recovery made 3,833 Short Incentive paid 512

 Out of the above, all the short recoveries and excess incentives were
13
Observation rating
1.1.1 Excess/short diesel recoveries HIGH MED LOW
Manual Exemptions
• Short/ excess diesel recoveries were made from the drivers as the manual exemptions given were wrongly calculated. Details of the same are
as given below:
Diesel Recovery as Exemption Amount to be Recovery as per (Short) /Excess
Unit Annexure
per Calculation given recovered Ledger Recovery Total
Kodad 8,024 7,029 995 7,904 6,909
Peapully 64,385 22,416 41,968 34,744 (7,225)
Hosur 5,173 4,857 316 5,173 4,857
Coimbatore 4,462 4,462 - 3,244 3,244
Total 82,044 38,764 43,279 51,065 7,785
Recommendations
• Manual exemptions should be properly calculated and approval for the same should be taken.
14
Observation rating
Manual Exemptions
• In few cases, the excess exemptions given has been recovered after the submission of audit report. The summary is given below:
Diesel Recovery as Exemption Amount to be (Short) /Excess
Unit Recovery as per Ledger Amount recovered
per Calculation given recovered Recovery Total
Hosur 6,144 7,792 - (1,648) (1,648) 1,648

(Amount paid instead of Recovering)
15
Observation rating
Non Updation of KMPL in portal

• Excess Diesel recovery was made from the drivers as the KMPL was not updated in portal as per budget. Summary of the same are as given
below:
Amount to be Recovery as per (Short) /Excess
Unit Annexure
recovered Ledger Recovery Total
Kodad 8,402 10,791 2,390
Peapully 637 (449) (1,086)
Coimbatore 1,475 1,801 326
Total 10,514 12,143 1,630
Recommendations:
 KMPL should be updated in portal as and when the KMPL is changed. 16
Observation rating
Manual Exemptions
• In few cases, the Short recoveries made has been recovered after the submission of audit report. The summary is given below:
Amount
Diesel Recovery as Exemption Amount to be Recovery as per (Short) /Excess
Unit subsequently
per Calculation given recovered Ledger Recovery Total
recovered
Kodad 1,837 - 1,837 88.5 (1,748) 1,748
Peapully 6,899 - 6,899 304 (6,595) 6,595
Puttur 8,460 6,592 1,868 204 (1,665) 1,665
Hosur 4,527 - 4,527 3,971 (556) 556
Coimbatore 46 - 46 - (46) 46
Total 21,769 6,592 15,177 4567.5 (10,610) 10,610

17
Policy Procedural Regulatory System Deficiency a
Observation rating
KMPL wrongly picked due to DC date

• In unit – 2, KMPL for bulkers is wrongly picked based on the return load quantity instead of upload quantity and DC was generated route end
or before route start, as a result diesel recovery was excess or short recovered from drivers. Details of the same are as given below:

Unit Annexure
Peapully 690 1,891 1,201
Recommendations
 KMPL for bulkers should be picked as per the tonnage for the route in the trip and not the total tonnage carried for all the routes in the trip
together.
18
Observation rating
KMPL wrongly picked due to multiple DC

• In unit – 2, KMPL for bulkers is wrongly picked as total tonnage for multiple DC’s in a single route is considered instead of maximum tonnage,
as a result diesel recovery was short recovered from drivers. Details of the same are as given below:

Unit Annexure
Peapully 1,796 - (1,796)
Recommendations
 KMPL for bulkers should be picked as per the maximum tonnage for the route in the trip and not the total tonnage carried for all the routes in
the trip together.
19
Observation rating
Others
• Other short/ excess Diesel recoveries made from the drivers. Summary and details of the same are as given below:
Diesel Recovery as Diesel Recovery (Short) /Excess
Unit Annexure
per Calculation as per Ledger Recovery Total
Kodad - 4,789 4,789
Peapully 229 333 104
Coimbatore 263 525 263
Total 492 5,647 5,156

• In few cases, the Short recoveries made has been recovered after the submission of audit report. The summary is given below:
Diesel Recovery as per Diesel Recovery as (Short) /Excess Recovery Amount subsequently
Unit
Calculation per Ledger Total recovered
Peapully 206 - (206) 206
Recommendations
• Necessary rectification entries are to be passed.
20
Observation rating
1.1.2 Excess/short diesel incentives HIGH MED LOW
Ineligible Diesel Incentives paid Recommendations

• New Vehicles are not eligible for Diesel incentives until final KMPL is fixed for the Vehicles. Any Diesel • Diesel incentives for new
Incentive calculated and posted as per the portal is to be reversed, but it is observed that incentive was paid vehicles is to be reversed
to drivers for trips with new vehicle resulting in excess incentives to the drivers. Summary of the same are as when the trip is closed.
given below:
Diesel Incentive Diesel Incentive Short/(Excess)
Unit Vehicle Desc Annexure
as per Calculation as per Ledger Incentive
Peapully Eicher Pro 6037 TL - 46 (46)
Total - 46 (46)
• In few cases, the excess incentive given has been recovered after the submission of audit report. The
summary is given below:
Amount
Diesel Incentive as Diesel Incentive Short/(Excess)
Unit Vehicle Desc subsequently
per Calculation as per Ledger Incentive
recovered
Hosur MAN CLA 49.280 TT2VCR - 165 (165) 165
Coimbatore Eicher, MAN - 317 (317) 317
21
Observation rating
Non Updation of KMPL in portal

• 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 as Diesel Incentive as
Unit Short/(Excess) Incentive Annexure
per Calculation per Ledger
Peapully 1,029 2,514 (1,485)
Total 1,029 2,514 (1,485)
• In few cases, the excess incentive given has been recovered after the submission of audit report. The summary is given below:
Diesel Incentive as per Diesel Incentive as per

Unit Short/(Excess) Incentive Amounts recovered subsequently
Calculation Ledger
Kodad 51,119 65,193 (14,074) 14,074
Puttur 1,029 2,514 (275) 275
Hosur 383 576 (192) 192
Recommendations
 KMPL should be updated in portal & circulars as and when the KMPL is changed. 22
Observation rating
KMPL wrongly picked due to DC date

• In unit – 2, KMPL for bulkers is wrongly picked based on:
 return load quantity instead of upload quantity; and/or
 DC date as the DC is generated after route end or before route start
• As a result diesel incentive was excess or short paid to drivers. Details of the same are as given below:
Amount to be Incentive as per Short /(Excess)

Unit Annexure
paid Ledger incentive Total
Peapully 25,477 22,601 2,876
Recommendations
• DC for a the trip should be entered before the route end time of the trip so that the DC Qty is considered for Diesel Recovery/Incentive
Calculation. Also, incentives should be paid manually if any short incentive arise due to delay in updation of DC.
23
Observation rating
KMPL wrongly picked due to multiple DC

• In unit – 2, KMPL for bulkers is wrongly picked as total tonnage for multiple DC’s in a single route is considered instead of maximum tonnage,
as a result diesel incentive was excess paid to drivers. Details of the same are as given below:
Amount to be Incentive as per Short /(Excess)
Unit Annexure
paid Ledger incentive Total
Peapully 1,547 4,154 (2,607)
• In few cases, the excess incentive given has been recovered after the submission of audit report. The summary is given below:
Amount
Incentive as per Short /(Excess)
Unit Amount to be paid subsequently
Ledger incentive Total
recovered
Peapully 54 3,991 (3,937) 3,937
Recommendations
 KMPL for bulkers should be picked as per the maximum tonnage for the route in the trip and not the total tonnage carried for all the routes in
the trip together.
24
Observation rating
Others
• Other Diesel Incentive short paid to the drivers. Summary and details of the same are as given below:
Diesel Incentive as Diesel Incentive Short/(Excess)

Unit Annexure
per Calculation as per Ledger Incentive
Kodad 13,459 5,399 8,060
Hosur 38 - 38
Coimbatore 2,731 2,219 512
Total 16,228 7,618 8,610
Recommendations
• Necessary rectification entries are to be passed 25
Policy Procedural a Regulatory System Deficiency a
Observation rating
1.1.3 Other observations HIGH MED LOW
Key Observation
• It is observed that the DC is generated after the Trip closure in few trips. Details of the same are as given below:
Potential impact/Risk(s) faced

• There is delay in posting of revenue.
Recommendations
• The Portal should not accept post dated DCs i.e. DC date has to be only between the Trip Open date and the Trip Close Date.
26
1.1.4 Excess/short diesel recoveries & incentives
Statistical Analysis of Q3 (FY 2017-18) & Q4 (FY 2017-18)
• Given below is the comparison showing the percentage of discrepancies in the trip sheets between Q3 (FY 2017-18) & Q4 (FY 2017-18)
pertaining to Unit – 1.

Q.E. 31st Q.E. 31st March, Q.E. 31st Q.E. 31st March,
Particulars Particulars
December, 2017 2018 December, 2017 2018
No. of trips Verified 6206 6139 No. of slips Verified 883 876
No. of Trips with Variances 0 30 No. of Slips with Variances 2 18
Percentage of Trips with variances 0.00% 0.49% Percentage of Slips with variances 0.23% 2.05%
Change (Increase)/Decrease (0.49%) Change (Increase)/Decrease (1.83%)
No. of Instances of Short Recovery - 16 No. of Instances of Excess Incentive 1 14
Short Recovery - (8,008) Excess Incentive (1,112) (14,075)
Change (Increase)/Decrease 0.00% Change (Increase)/Decrease (1,165.66%)
Excess Recovery - 20,343 Short Incentive 436 8,063
Net (Short)/Excess Recovery - 12,335 Net Short/(Excess) Incentive (676) (6,012)
27
Policy Procedural Regulatory System Deficiency
Observation rating
1.1.4 Excess/short diesel recoveries & incentives HIGH MED LOW

• Given below is the chart depicting the percentage of discrepancies, short recoveries and excess incentives in the trip sheets comparing Q3 (FY
2017-18) & Q4 (FY 2017-18) pertaining to Unit – 1
2.50%
16
Thousands
2.05% 14.08
2.00% 14
12 10.79
1.50% 10
8
1.00%
6
0.49%
0.50% 4
0.23%
0.00% 2 1.11
0.00% -
Discrepancies in 0
Discrepancies in incentives
Recoveries Short Recoveries Excess Incentives
Q3 0.00% 0.23% Q3 0 1112
Q4 0.49% 2.05% Q4 10794 14075
28

No. of Trips with Variances 33 66 No. of Slips with Variances 55 39
Change (Increase)/Decrease (0.82%) Change (Increase)/Decrease 2.60%
No. of Instances of Short Recovery 7 31 No. of Instances of Excess Incentive 1 19
Short Recovery (3,927) (20,448) Excess Incentive (10) (9,184)
Change (Increase)/Decrease (420.64%) Change (Increase)/Decrease (93,897.44%)
Excess Recovery 13,712 4,843 Short Incentive 34,625 3,985
Net (Short)/Excess Recovery 9,785 (15,604) Net Short/(Excess) Incentive 34,615 (5,198)
29
Observation rating

10.00% 9.17% 25
Thousands
9.00% 20.45
8.00% 20
7.00% 6.57%
6.00% 15
5.00%
4.00% 10 9.18
3.00%
1.92%
2.00% 1.10% 3.93
5
1.00%
0.00% 0.01
Discrepancies in Discrepancies in -
Short Recoveries Excess Incentives
Recoveries incentives
Q3 3,927 10
Q3 1.10% 9.17%
Q4 20,448 9,184
Q4 1.92% 6.57%
30

No. of Trips with Variances 13 8 No. of Slips with Variances - 3
Change (Increase)/Decrease 0.12% Change (Increase)/Decrease (0.84%)
No. of Instances of Short Recovery 5 4 No. of Instances of Excess Incentive - 1
Short Recovery (586) (1,669) Excess Incentive - (291)
Change (Increase)/Decrease (184.59%) Change (Increase)/Decrease 0.00%
Excess Recovery 4,049 2 Short Incentive - 361
Net (Short)/Excess Recovery 3,462 (1,667) Net Short/(Excess) Incentive - 70
31
Observation rating

0.90% 0.84% 18 16.69
Hundreds
0.80% 16
0.70% 14
0.60% 12
0.50% 0.47%
10
0.40% 0.35%
8
0.30% 5.86
6
0.20%
4 2.91
0.10%
0.00% 2
0.00% -
Discrepancies in 0
Discrepancies in incentives Short Recoveries Excess Incentives
Recoveries
Q3 0.47% 0.00% Q3 586 -
Q4 0.35% 0.84% Q4 1,669 291
32

No. of Trips with Variances 3 10 No. of Slips with Variances - 5
No. of Instances of Short Recovery 1 6 No. of Instances of Excess Incentive - 3
Short Recovery (52) (2,205) Excess Incentive - (358)
Change (Increase)/Decrease (4,178.94%) Change (Increase)/Decrease 0.00%
Excess Recovery 298 4,857 Short Incentive - 39
Net (Short)/Excess Recovery 246 2,653 Net Short/(Excess) Incentive - (319)
33
Observation rating

1.00% 25
Hundreds
0.90% 22.05
0.90%
0.80% 20
0.70%
0.60% 15
0.50%
0.40% 10
0.30% 0.27%
0.20%
0.09% 5 3.58
0.10%
0.00% 0.52
0.00% -
Discrepancies in 0
Recoveries
Q3 Q3 52 0
0.09% 0.00%
Q4 Q4 2205 358
0.27% 0.90%
34
No. of Trips with Variances - 6 No. of Slips with Variances 1 4
No. of Instances of Short Recovery - 1 No. of Instances of Excess Incentive 1 2
Short Recovery - (46) Excess Incentive (651) (373)
Change (Increase)/Decrease 0.00% Change (Increase)/Decrease 42.74%
Excess Recovery - 3,833 Short Incentive - 39
Net (Short)/Excess Recovery - 3,787 Net Short/(Excess) Incentive (651) (334)
35
Observation rating

3.00% 7 6.51
Hundreds
2.50% 6
2.50%
5
2.00%
4 3.73
1.50%
3
1.00% 0.90%
0.71%
2
0.50%
1 0.46
0.00%
0.00% -
Discrepancies in 0
Recoveries
Q3 Q3 0 651
0.00% 0.71%
Q4 Q4 46 373
0.90% 2.50%
36
Operations – Expenditure
Snapshot of the Trip sheets closed during the Quarter ending March 2018
Expenditure
No. of Trips
Unit
Percentage of
No of Trips Closed Vouched Not Vouched
Verification
Kodad 6,139 596 5,543 9.71
Peapully 3,437 397 3,040 11.55
Puttur 2,270 221 2,049 9.74
Hosur 3,714 347 3,367 9.34
Coimbatore 776 68 708 8.76
Total 16,336 1,629 14,707 9.97
No of Trips Verified Kodad

4%
Peapully
21% 37% Puttur

Hosur
14% 24%
Coimbatore
37
Observation rating
1.2 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
21,18,191 18,05,893 3,12,198
Break Up
Consolidated
Excess of actuals over budgets (12,454)
Excess of budgets over actuals 3,24,752
 Unit wise trip wise actual v/s budgets are given in the succeeding slides.
38
38
Observation rating
Key Observations – Kodad
Amount in ` Excess of Budgets Excess of Actual

Expenditure Budget Actual Variance
over Actual over budgets
Unit-1-Kodad - Trip Expenditure - Budget V/S Actuals
Loading 22,450 22,450 - - -
Budgeted Actual
Unit Variance
Expenditure Expenditure Cement Unloading 1,53,470 1,54,685 7,865 (9,080) (1,215)
11,14,145 8,84,547 2,29,598
Return Load Loading 75,650 76,360 - (610) (610)
Break Up
Kodad Return Load
38,730 38,204 1,510 (984) 526
Excess of actuals over budgets (10,674) Unloading
Toll Gates 7,22,920 4,91,923 2,30,997 - 2,30,997
Excess of budgets over actuals 2,40,372
Fixed Food
58,350 58,350 - - -
Expenditures
Kanta 10,595 10,595 - - -

• The Summary in a form a chart is given in the succeeding
Village Tax 31,980 31,980 - - -
slide
• Out of the above excess payments an amount of ` 9,080/- Others - - - - -
has been subsequently recovered.
Total 11,13,185 8,84,547 2,40,372 (10,674) 2,29,698
3939
Trip route Expenditures- Budget vs Actual – Kodad
250
231
200
150
Excess of Actuals over Budgets
100 Excess of Budgets over Actual
50
8
- - - - - - 2 - - - - - - - - -
-
Loading Unloading Return Load Ret Load Un- Fixed Food Other Trip
Toll Gates Kanta Village Tax
Charges Charges Load Ch Load ch Expenses Expenses
Excess of Actuals over Budgets - - - - - - - - -
Excess of Budgets over Actual - 7,865 - 1,510 230,997 - - - -
Observation rating
Key Observations – Peapully
Amount in ` Excess of Budgets Excess of Actual

Unit-2-Peapully - Trip Expenditure - Budget V/S Actuals
Return Load
Budgeted Actual 56,050 56,050 100 (100) -
Unit Variance Loading
Expenditure Expenditure Return Load
- - - - -
Unloading
4,98,425 4,69,183 29,242
Toll Gates 2,43,735 2,20,193 24,572 (1,030) 23,542
Break Up
Peapully Fixed Food
1,98,300 1,92,600 5,700 - 5,700
Excess of actuals over budgets (1,130) Expenditures
Village Tax - - - - -
Excess of budgets over actuals 30,372
Kanta 340 340 - - -
Total 4,98,425 4,69,183 30,372 (1,130) 29,242

slide
41
Trip route Expenditures- Budget vs Actual - Peapully
30
Thousands
25
25
20
15
Excess of Budgets over Actual

10
6
5
0 - - - - - - - - -
-
(0)
(1)
(5)
Return Load Return Load Fixed Food
Toll Gates Village Tax Kanta Others
Loading Unloading Expenses
Excess of Budgets over Actual 100 - 24,572 5,700 - - -
Excess of Actuals over Budgets (100) - (1,030) - - - -
Policy Procedural a Regulatory System al
Deficiency
Observation rating
Key Observations - Puttur
Excess of Budgets Excess of Actuals

Amount in ` Expenditure Budget Actual
Variance
Unit-3-Puttur - Trip Expenditure - Budget V/S Actuals Return Load
5,100 5,100 - - -
Loading
Budgeted Actual
Unit Variance Return Load
Expenditure Expenditure 6,610 6,310 300 - 300
Unloading
2,12,084 1,70,816 41,268 Toll Gates 1,68,354 1,30,526 38,478 (650) 37,828
Break Up Fixed Food

Puttur Expenditures
28,750 25,610 3,140 - 3,140
Excess of actuals over budgets (650)
Village Tax 3,270 3,270 - - -
Excess of budgets over actuals 41,918
Others - - - - -
Total 2,12,084 1,70,816 41,918 (650) 41,268

slide
43
43
Trip route Expenditures- Budget vs Actual - Puttur
45
Thousands
40 38
35
30
25
20
15 Excess of Actuals over Budgets
10
5 3
- - 0 - - - - - -
-
(1)
(5)
Return Load
Return Load Loading Toll Gates Fixed Food Expenses Village Tax Others
Unloading
Excess of Budgets over Actual - 300 38,478 3,140 - -
Excess of Actuals over Budgets - - (650) - - -
Observation rating
Amount in ` Excess of Actuals Excess of Budgets

Unit-4-Hosur - Trip Expenditure - Budget V/S Actuals over Budgets over Actuals
Budgeted Actual Return Load

Unit Variance 18,750 18,750 - - -
Expenditure Expenditure Loading
Return Load
2,26,109 2,16,720 9,389 929 918 - 11 11
Unloading
Break Up Toll Gates 35,500 26,222 - 9,278 9,278

Hosur
Fixed Food
Excess of actuals over budgets - 1,67,000 1,66,900 - 100 100
Expenditures
Excess of budgets over actuals 9,389 Kanta - - - - -
Village Tax 3,930 3,930 - - -
Others - - - - -
Total 2,26,109 2,16,720 - 9,389 9,389

slide
45
45
Trip route Expenditures- Budget vs Actual - Hosur
10
Thousands
9
5
4 Excess of Budgets over Actual
- - - 0 - - 0 - - - - - -
-
Toll Gates Kanta Village Tax Others
Excess of Actuals over Budgets - - - - - - -
Excess of Budgets over Actual - 11 9,278 100 - - -
Observation rating
Amount in ` Excess of Budgets Excess of Actuals

over Actual over Budgets
Unit-7-Coimbatore - Trip Expenditure - Budget V/S Actuals
Return Load
Budgeted Actual Loading
6,720 6,720 - - -
Unit Variance
Expenditure Expenditure
Return Load
- - - - -
Unloading
67,328 64,627 2,701
Toll Gates 28,208 25,507 - 2,701 2,701
Puttur Break Up Fixed Food
32,400 32,400 - - -
Excess of actuals over budgets - Expenditures
Excess of budgets over actuals 2,701 Kanta - - - - -

Village Tax - - - - -
Others - - - - -
Total 67,328 64,627 - 2,701 2,701

slide
47
47
Trip route Expenditures- Budget vs Actual - Hosur
3
Thousands
3
2
- - - - - - - - - - - - -
-
Toll Gates Kanta Village Tax Others
Excess of Actuals over Budgets - - - - - - -
Excess of Budgets over Actual - - 2,701 - - - -
Observation rating
1.2.1 Excess/short fixed food expenses HIGH MED LOW
Observations
Unit Budget Actual Variance Annexure
Peapully 28,100 22,400 5,700
Puttur 9,200 6,060 3,140
Hosur 500 400 100
Total 37,800 28,860 8,940
49
Observation rating
1.2.2 Excess/short Unloading/Loading charges HIGH MED LOW
Observations
• Cement unloading charges, RL Unloading Charges & loading charges was made Short/(Excess) of Actuals over Budgets, details of the same are
as given in the below annexures:
Amount
Expenditure Unit Budget Actual Variance Annexure subsequently
recovered
Unloading charges Kodad - 9,080 (9,080) 9,080
Kodad 7,130 6,604 526

Return load
unloading charges
Puttur 1,700 1,400 300
Return load loading

Kodad 1,860 2,570 (710)
charges
50
Observation rating
1.2.3.1 Excess/short toll gates HIGH MED LOW
Observations
Unit Budget Actual Variance Annexure
Kodad 5,09,900 2,78,903 2,30,997
Peapully 52,455 28,533 23,922
Puttur 1,28,404 90,579 37,825
Hosur 33,357 24,108 9,249
Coimbatore 8,182 5,623 2,559
Total 7,32,298 4,27,746 3,04,552
51
Observation rating
1.2.3.2 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:
Unit 1 Unit 2 Unit 3 Unit 4 Unit 7
52
Observation rating
1.2.4 Trip route Expenditures- Toll Gates (FASTag) HIGH MED LOW
Key Observations
 Based on the online statement generated from ICICI’s FasTag website we have verified the following:
• Double Deduction of Toll - Toll Deductions within 2.5 hours for same vehicle at same toll plaza are considered as Double Deduction
• Excess Deductions for Return Journey within 24 Hours – For vehicles returning within 24 hours instead of Return Journey Rate the
Single journey rate has been deducted, resulting in excess deduction.
• Other Excess Deductions – Wrong Rate of Deductions
• Receipt of Cash Back – cash back is received on eligible transactions through ‘FASTag’. We have verified the cash back to be received for
the period of January 2018 to April 2018.
 These excess deductions are being submitted to ICICI for refund. A summary of excess deductions and the details of Cash back are given in the
succeeding slides.
53
53
Observation rating
Key Observations
Following is the Unit wise Summary of excess deductions till 31st May 2018:
Excess Deductions for
Unit Deduction within 2.5 Hours Return Journey within 24 Other Excess Deductions Total
Hours
Unit-1, Kodad 5,31,360 12,28,065 5,438 17,64,863
Unit-2, Peapully 2,30,925 8,99,224 1,19,665 12,49,814
Unit-3, Puttur 98,652 6,21,687 5,738 7,26,077
Unit-4, Hosur 3,12,011 4,95,870 1,09,243 9,17,124
Unit-7, Coimbatore 25,335 13,605 3,040 41,980
Others 6,901 4,078 12,180 23,159
Total 12,05,184 32,62,529 2,55,304 47,23,017
Less: Credits Received (37,41,968)

Less Credit Received for Dec to June (Lumpsum) (7,04,329)
Net Excess Deductions 2,76,720
54
54
Observation rating
 Following is the Summary of Cash Back to be received for Transactions processed up to 30th April, 2018:
Dec’16 –
Particulars Jan-18 Feb-18 Mar-18 Apr-18 Total
Dec’17
A. Total transactions
17,75,36,496 1,54,48,661 1,55,79,423 1,75,86,063 1,60,80,068 24,22,30,711
processed
B. Adjustment credits
27,21,103 1,49,490 2,36,225 2,39,490 2,50,111 35,96,419
C. Net amount eligible for
credits (A-B) 17,48,15,393 1,52,99,171 1,53,43,198 1,73,46,573 1,58,29,957 23,86,34,292
D. Eligible Cashback
1,43,40,249 11,47,440 11,50,741 13,00,995 7,91,498 1,87,30,923
E. Total Cashback received
1,43,31,499 11,46,939 11,65,963 12,98,233 8,00,914 1,87,43,548
F. Cash Back yet to be
received/(Excess 8,750 501 (15,221) 2,762 (9,416) (12,624)
received) (D-E)
Vehicle Wise Summary
55
55
2.Procurement (including Tyres)
56
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.
57
a
2.1 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 4
days instances
2 1
0–1 665
3 1
2 – 10 797
>4 11
11 – 30 60
Total 17
>30 20
• It is observed that in 359 instances Security inward date is prior to
Total 1542
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
1–5 316
6 – 10 31
11 – 15 6
>15 6
Total 359 58
2.1 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 updation 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.
59
Observation rating
2.2 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 736 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
0-5 491 • To ensure that PO’s are issued to the suppliers and on the strength of which
6 – 10 123 the supplies are to be affected.
11 – 30 109
>30 13
Total 736 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.
60
Observation rating
2.3 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 521 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.
• It is observed that in 13 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.
61
Policy Procedural a Regulatory a System Deficiency
Observation rating
2.4 Invoices not found/ Copy of invoices HIGH MED LOW
Key Observations Recommendations
• In 305 instances the relevant Purchase Invoice, GRN and Purchase voucher are
not available on record for verification for the F.Y 2017-2018 , such instances are • To ensure that all the invoices are available on record.
annexed below:
Count of
Quarter GRN's Value of GRN GST Input
Missing
Q1 - Apr to Jun 57 1,10,38,269 - Potential Impact
Q2 - Jul to Sept 35 1,69,612 8,951
Q3 - Oct to Dec 39 4,32,793 25,503 • In case of invoices not available on record the GST
Q4 - Jan to Mar 52 27,99,494 7,97,769 input for the same cannot be claimed and also the
1,44,40,167 8,32,222 same will not be allowed as an expenditure under the
183
Income Tax Act.
62
Observation rating
2.5
2.6 Excess/(Short) PV amounts
Other Observations HIGH MED LOW
Key Observation
• It is observed that in 31 instances amounts on the purchase voucher are not matching with the invoice amounts, Such instances 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.
63
2.6 Issues relating to PO, GRN and
Security Inward dates
GRN raised prior to Security
Delay in raising GRN P.O after Invoice Date Security Inward prior to P.O
Inward
Particulars
Q.E. 31st Dec, Q.E. 31st Mar, Q.E. 31st Dec, Q.E. 31st Mar, Q.E. 31st Dec, Q.E. 31st Mar, Q.E. 31st Dec, Q.E. 31st Mar,
2017 2018 2017 2018 2017 2018 2017 2018
Total no. of Purchases 3,607 2,856 3,607 2,856 3,607 2,856 3,607 2,856
No. of Instances 1,824 1,542 46 17 1,192 736 542 359
Percentage of Instances 50.57% 54.17% 1.28% 0.60% 33.05% 25.77% 15.03% 12.92%
Change (Increase)/Decrease (3.60%) 0.68% 7.28% 2.11%
Absence of Security stamp GRNs with multiple Invoices List of invoices not found No proper Invoice
Particulars
Q.E. 31st Dec, Q.E. 31st Mar, Q.E. 31st Dec, Q.E. 31st Mar, Q.E. 31st Dec, Q.E. 31st Mar, Q.E. 31st Dec, Q.E. 31st Mar,
2017 2018 2017 2018 2017 2018 2017 2018
Total no. of Purchases 3,607 2,856 3,607 2,856 3,607 2,856 3,607 2,856
No. of Instances 805 521 1 13 39 52 68 -
Percentage of Instances 22.32% 18.24% 0.03% 0.46% 2.41% 2.07% 1.89% 0.00%
Change (Increase)/Decrease 4.08% (0.43%) 0.59% 1.89%
64
2
- .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 Q3 (FY 2017-18) & Q4 (FY 2017-18):
Number of Instances in %
60.00% 54.17%
50.57%
50.00%
40.00% 33.05%
30.00% 25.77%
20.00% 15.03% 12.92%

10.00%
0.00%
P.O after Invoice Date Delay in raising GRN Security Inward prior to P.O
Q3 33.05% 50.57% 15.03%
Q4 25.77% 54.17% 12.92%
65
2.6 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 Q3 (FY 2017-18) & Q4 (FY 2017-18):
Number of Instances in %
25.00% 22.32%
20.00% 18.24%
15.00%
10.00%
5.00% 2.41% 2.07% 1.28% 0.60%

0.00%
Invoice not found GRN raised prior to Security Inward Absence of security stamp
Q3 2.41% 1.28% 22.32%
Q4 2.07% 0.60% 18.24%
66
Internal Audit Report for the Quarter January 2018 to March 2018.
3.Driver Performance Incentives
67
67
Observation rating
3.1 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.
68
Observation rating
3.1 Driver Performance Incentives HIGH MED LOW
Key Observations
Amount in `
Consolidated – Driver Performance Incentives
Unit As per Calculation As per Ledger Variance
10,01,04,301 10,00,02,824 1,01,477

Break Up
Consolidated
Excess payment to Driver (23,363)
Short payment to Driver 1,24,809
 Unit wise Slip wise Summaries are given in the succeeding slides.
 In few cases, the Excess incentives paid, ` 51,209/- made has been recovered after the submission of audit report. The summary is given
below:
69
69
Observation rating
Key Observations - Kodad
Amount in ` As per Our As per Unfavourable Favourable

Expenditure Variance
Unit-1-Kodad – Driver Performance Incentives Calculation Ledger Variance Variance
As per
Unit As per Ledger Variance Driver Performance 54,26,110 54,25,479 - 683 683
calculation
3,54,62,092 3,53,98,831 63,232 KMS Incentives 2,51,14,832 2,51,08,424 - 6,412 6,412
Break Up
R\L Commission 12,66,086 12,20,441 (1,476) 47,123 45,647
Kodad
Senior Active Incentive 5,73,750 5,64,250 - 9,500 9,500
Short payment to Driver 64,713
Good Driver Incentive 11,28,750 11,28,750 - - -
• The Summary in a form of a chart is given in the succeeding

Other Incentives 19,52,478 19,51,488 (5) 995 990
slide.
Total 3,54,53,183 3,53,98,831 (1,481) 64,713 63,232
7070
Driver Performance Incentives - Kodad
500
471.23
Hundreds
400
300
200
95.00 Excess Payment to

100
64.12 Driver
Short Payment to
6.83 9.95 Driver
- - - - -
-
(14.76)
(100)
(88.28)
(200)
Senior Active Good Driver
Driver Performance KMS Incentives R\L Commission Other Incentives
Incentive Incentive
Excess Payment to Driver - - (1,476) - - (8,828)
Short Payment to Driver 683 6,412 47,123 9,500 - 995
Observation rating
Key Observations - Peapully
Amount in ` As per Our Unfavourable Favourable

Expenditure As per Ledger Variance
Unit-2-Peapully – Driver Performance Incentives Calculation Variance Variance
As per
Unit As per Ledger Variance
Calculation Driver Performance 38,83,054 38,83,002 - 51 51
2,68,74,589 2,68,55,220 19,369 KMS Incentives 2,09,57,769 2,09,64,193 (6,667) 241 (6,426)
Break Up
Peapully R\L Commission 4,73,731 4,54,872 (723) 19,576 18,853
Senior Active Incentive 5,23,750 5,16,500 (250) 7,500 7,250
Good Driver Incentive 8,82,500 8,83,000 (500) - (500)

slide.
Other Incentives 1,53,785 1,53,653 - 134 134
• In few cases, the Excess incentives paid ` 7,417/- has been
recovered after the submission of audit report. The
summary is given below: Total 2,68,74,589 2,68,55,220 (8,140) 27,502 19,362
72
72
Driver Performance Incentives - Peapully
250
Hundreds
195.76
200
150
100
75.00
Excess Payment to
50 Driver
Short Payment to
2.41 Driver
- 0.51 - - 1.34
-
(2.50) (5.00)
(7.23)
(50)
(66.67)
(100)
Incentive Incentive
Excess Payment to Driver - (6,667) (723) (250) (500) -
Short Payment to Driver 51 241 19,576 7,500 - 134
Observation rating
Key Observations – Puttur

Expenditure As per Ledger Variance
Unit3-Puttur – Driver Performance Incentives Calculation Variance Variance
As per
Calculation
1,11,34,738 1,11,34,105 633 KMS Incentives 76,92,781 76,86,771 (1) 525 524
Break Up
R\L Commission 7,69,034 7,67,948 (722) 1,808 1,086
Puttur
Senior Active Incentive 3,02,250 3,02,000 - - -
Good Driver Incentive 3,80,000 3,79,750 (1,000) - (1,000)

slide. Other Incentives 1,57,652 1,57,632 - 20 20
• In few cases, the Excess incentives paid ` 1,000/- made has
been recovered after the submission of audit report. The
Total 1,11,41,725 1,11,34,105 (1,723) 2,356 633
7474
Driver Performance Incentives - Puttur
70
Hundreds
60.12
60
50
40
30
20 18.08 Excess Payment to

Driver
12.50
Short Payment to
10 Driver
2.50
- 0.03 - - 0.20
-
(0.01)
(10) (7.22)
(10.00)
(20)
Incentive Incentive
Excess Payment to Driver - (1) (722) - (1,000) -
Short Payment to Driver 3 6,012 1,808 250 1,250 20
Observation rating
HIGH MED LOW
3.1 Driver Performance Incentives

Unit-4-Hosur – Driver Performance Incentives Expenditure As per Ledger Variance
Calculation Variance Variance
As per
Unit As per Ledger Variance Driver Performance 35,17,413 35,17,223 (2) 210 208
Calculation
2,21,41,213 2,21,21,257 19,969 KMS Incentives 1,67,97,124 1,67,91,331 - 5,787 5,787
Break Up
R\L Commission 1,24,347 1,04,874 (1,334) 20,807 19,473
Hosur
Senior Active
6,89,000 6,95,000 (8,750) 2,750 (6000)
Short payment to Driver 29,544 Incentive
Good Driver Incentive 9,85,000 9,84,500 - 500 500

slide. Other Incentives 28,329 28,328 - 1 1
• In few cases, the Excess incentives paid Rs. 8,750/-has
been recovered after the submission of audit report. The Total 2,21,41,213 2,21,21,257 (9,584) 29,544 19,969
76
76
Driver Performance Incentives - Hosur
300
Hundreds
208.07
200
116.93
100
30.00
20.00
2.10 - 0.01
-
(0.02)
(13.34)
(40.00)
Excess Payment to
(100) Driver
(105.00)
Short Payment to
Driver
(200)
(300)
(359.49)
(400)
Driver Performance KMS Incentives R\L Commission Senior Active Incentive Good Driver Incentive Other Incentives
Excess Payment to Driver (2) (35,949) (1,334) (10,500) (4,000) -
Short Payment to Driver 210 11,693 20,807 3,000 2,000 1
Observation rating

Unit-7-Coimbatore – Driver Performance Incentives Expenditure As per Ledger Variance
Calculation Variance Variance
As per
Calculation
44,91,669 44,93,410 (1,742) KMS Incentives 33,30,411 33,30,257 - 155 155
Break Up
R\L Commission 91,998 93,932 (2,435) 500 (1,935)
Coimbatore
Senior Active
7,250 7,250 - - -
Short payment to Driver 694 Incentive
Good Driver Incentive 1,59,000 1,59,000 - - -

slide. Other Incentives - - - - -
Total 44,91,669 44,93,410 (2,435) 694 (1,741)
78
78
Driver Performance Incentives - Coimbatore
10
Hundreds
5.00
5
1.55
- 0.39 - - - - - - -
-
(5)
(10)
Excess Payment to
Driver
(15) Short Payment to

Driver
(20)
(25)
(24.35)
(30)
Driver Performance KMS Incentives R\L Commission Senior Active Incentive Good Driver Incentive Other Incentives
Excess Payment to Driver - - (2,435) - - -
Short Payment to Driver 39 155 500 - - -
Observation rating
3.2.1 Wrongofcalculation
3.2 Analysis of RL Commission
Driver Performance HIGH MED LOW
Key Observation Summary

RL Commission RL Commission Short/(Excess)
Unit Particulars Annexure
• There are short payments in units towards RL paid payable paid
Commission due to non-updation of RL Excess Payment 3,055 2,845 (210)
Commission details in the OA in the portal. Kodad Short Payment 6,592 55,307 48,715
• In few instances the system is not picking up the
Commission payable to the driver. Total 9,647 58,153 48,505
Excess Payment 20,582 19,414 (1,167)
Peapully Short Payment 11,993 32,004 20,011
Total 32,575 51,418 18,844
Excess Payment 21,039 20,317 (723)
Recommendations Puttur Short Payment 19,149 20,957 1,811
• RL Commission payable to the driver is to be Total 40,188 41,274 1,088
updated in the RL OA on the web portal. Excess Payment 21,211 19,772 (1,438)
• In cases where the system is not picking the
Hosur Short Payment 7,667 28,576 20,909
correct commission the same needs to be
rectified. Also, the system deficiency is to be Total 28,877 48,348 19,471
corrected in the new portal being developed. Excess Payment 32,681 30,158 (2,523)
Coimbatore Short Payment - 500 500
Total 32,681 30,658 (2,024)
80
Observation rating
3.2.2 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 short 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
KM's Incentive
Unit
Payable Paid Short/(Excess) Amount subsequently recovered
Peapully 55,000 61,667 (6,667) 6,667
81
Observation rating
3.2.3 No. ofof
3.2 Analysis Duties
Driverof driver
Performance HIGH MED LOW
Potential impact/ Risk(s) faced Summary

Eligible Senior Senior Active Difference
• It is observed that the number of duties of a driver Unit Annexure
Active Incentive Incentive Paid (Excess)/short
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. Kodad 9,500 2,000 7,500
• In few instances the incomplete duty of a driver is
considered as a complete duty, resulting in excess
payments of active/ senior active driver Peapully 9,750 2,250 7,500
incentives.
Hosur 4,750 2,250 500

Recommendations
Total 24,000 6,500 15,500
• In few cases, the excess Active Driver incentive given has been recovered after the
submission of audit report. The summary is given below:
Eligible Senior Senior Active Difference Amount recovered
Unit
Active Incentive Incentive Paid (Excess)/short subsequently
Hosur 3,750 12,500 (8,750) 8,750
82
Observation rating
3.2.3 Other of
3.2 Analysis differences
Driver Performance HIGH MED LOW
Key Observations
• Other Incentives were paid to the drivers based on manual calculation. In few cases there are short payments towards other incentives. Slip
wise details are given in the annexure below
Incentives as per our Short /(Excess) incentive
Unit Incentive as per Ledger Annexure
calculations Total
Kodad 13,860 13,198 662
• Other Short/ excess payments were made to the driver, details of the same is as given below:
Unit Particulars Payable Paid Short/(Excess) paid Annexure
Kodad KMS Incentives 96,088 92,719 3,369
Puttur KMS Incentives 20,209 19,700 509
Hosur Driver Performance 1,537 1,371 166
• In few cases, the excess incentives given has been recovered after the submission of audit report. The summary is given below:
Unit Particulars Payable Paid Short/(Excess) paid Amount subsequently recovered
Puttur Good Driver Incentive 3,750 4,750 (1,000) 1,000

83
3.3 Analysis of Driver Performance
Key Observations
• Based on the slip percentage of the Driver we have • An analysis has been made for Driver-wise performance, Vehicle wise
categorized the drivers into following four categories. performance and a Model wise Matrix which is enclosed below:
Particulars Annexure
Slip Percentage Category
Vehicle Matrix
Less than 90% Below Average (Representing the Vehicles falling in the aforesaid
categories)
90% - 100% Average
Vehicle-Wise Slip-Wise
100% - 110% Above Average (Representing the Vehicles and the Slips carried out on the
More than 110% Excellent given Vehicle)
Driver-wise Vehicle-wise
(Representing the Drivers with the Vehicles in the aforesaid
categories)
Driver-wise count
(Representing the Driver wise segregation in the aforesaid
categories)
Vehicle -wise count
(Representing the Vehicle wise segregation in the aforesaid
categories)
84
84
Statistical Analysis of Q3 (FY 2017-18) v/s Q4 (FY 2017-18)
Unit – 1 Unit - 2 Unit - 3 Unit - 4 Unit – 7 Total
Particulars
Q.E. 31st Q.E. 31st Q.E. 31st Q.E. 31st Q.E. 31st Q.E. 31st Q.E. 31st Q.E. 31st Q.E. 31st Q.E. 31st Q.E. 31st Q.E. 31st
Dec, 2017 Mar, 2018 Dec, 2017 Mar, 2018 Dec, 2017 Mar, 2018 Dec, 2017 Mar, 2018 Dec, 2017 Mar, 2018 Dec, 2017 Mar, 2018
Total no. of Slips 883 876 599 594 508 358 520 553 141 160 2510 2381
No. of Slips with
207 135 28 73 12 49 52 75 5 40 304 372
Differences
Percentage of
23.44% 15.41% 4.67% 12.29% 2.36% 13.69% 10.00% 13.56% 3.55% 25.00% 12.11% 15.62%
Differences
Change
(Increase)/Decrease
8.03% (7.62%) (11.32%) (3.56%) (21.45%) (3.51%)
Short Payment to the

1,12,608 64,713 33,489 27,502 7,999 9,343 16,412 37,711 1,060 694 1,71,568 1,39,963
Driver
Excess Payment to the

(23,664) (1,481) (3,001) (8,140) (2,026) (1,723) (13,421) (51,785) (1,200) (2,435) (43,312) (65,564)
Driver
85
• The below mentioned chart depicts the Number of slips with differences for the two periods viz. Q3 (FY 2017-18) and Q4 (FY 2017-18).
30%
25.00%
25% 23.44%
20%
15.41% 15.62%
15% 13.69% 13.56%
12.29% 12.11%
10.00%
10%
4.67%
5% 3.55%
2.36%
0%
Unit 1 Unit 2 Unit 3 Unit 4 Unit 7 Total
Q3 23.44% 4.67% 2.36% 10.00% 3.55% 12.11%
Q4 15.41% 12.29% 13.69% 13.56% 25.00% 15.62%
86
• The below mentioned chart depicts the excess payment to the drivers for the two periods viz. Q3 (FY 2017-18) and Q4 (FY 2017-18).
(70) (66)
Thousands
(60)
(52)
(50)
(43.31)
(40)
(30)
(23.66)
(20)
(13.42)
(10) (8)
(1) (3.00) (2.03) (2) (1.20) (2)
-
Unit-1 Unit-2 Unit-3 Unit-4 Unit-7 Total
Q3 (23,664) (3,001) (2,026) (13,421) (1,200) (43,312)
Q4 (1,481) (8,140) (1,723) (51,785) (2,435) (65,564)
87
4.Maintenance
88
88
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.
89
Observation rating
4.1 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 Unit 7 • To ensure that PPM Schedules are performed on
timely basis.
• To ensure that Maintenance Schedule is properly
monitored so as to minimize backlogs.
Management’s Response
• The following annexure consists of repeated schedule carried out within short period.
Unit 1 Unit 2 Unit 3 Unit 4
90
Observation rating
4.2 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 2
Unit 3
Unit 4
Unit 7
91
Observation rating
4.3 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:
Recommendations
92
5.C & F Operations
93
93
Observation rating
5.1.1 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 December 2017 to 25th March 2018 for all
the godowns. The top 10 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 Code Godown Name Excess/(Short) Excess/(Short) Excess/(Short) Excess/(Short)
billed to RCL billed to RCL billed to RCL billed to RCL
1A13 GUNTUR (4,531) - - (4,531)
1T08 MADURAVOYAL (62) (3,520) - (3,582)
1A43 OU COLONY 1,880 (3,304) 228 (1,197)
1A35 ADIBHATLA - - (870) (870)
1T14 EKKATUTHANGAL (258) 74 - (184)
1T27 KANCHEEPURAM (135) 25 55 (55)
1A51 BHEL 1,824 - 1,295 3,119
1T42 PS PARK 3,340 200 (200) 3,340
1T25 ERODE 5,048 (960) 1,400 5,488
1T26 PERUNDURAI 6,980 - 520 7,500
• Godown wise summary of the differences noted is given in the below annexure:
94
Observation rating
5.1.2 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 (278.15) (16,456)
Loading
Excess billed to RCL 1,038.30 65,891
Total 760.65 49,435
Unloading
Excess billed to RCL 346.65 19,182
Total (75.65) 3,950
Crossing
Excess billed to RCL 252.80 15,229
Total 147.70 8,264
Grand Total[Excess/(Short) billed] 832.70 61,649
• The day wise details of differences are given in the below annexure:
95
Observation rating
5.2 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.
• To negotiate with RCL/Labour where the rate received from RCL is less than the rate paid to labour.
96
Internal Audit Report for the Quarter January 2018 to March 2018.
6.Insurance Claims
97
97
Observation rating
6.1 Pending Insurance Claims HIGH MED LOW
Key Observations Potential impact/ Risk(s) faced

• During the quarter 21 insurance claims were made, out of which 5 are yet to be settled. The • The insurance company might not process
position of claim settlement is as on 4th June, 2018. A list of such pending claims and the the claims if there are unreasonable delays
reasons for same are as given in the annexure below: in submission of the bills and may result in
a loss to the company.
`
Unit Vehicle No Date of accident Remarks Recommendations

Peapully AP24TA4780 25-01-2018 Bill check under process.
Coimbatore KL14T142 19-02-2018 Insurance claim under process. • The long pending claims made/ to be made
Peapully AP24Y4549 11-03-2018 Bill check under process. be periodically monitored.
Kodad TS05UB3944 17-03-2018 Bill check under process.
Kodad AP24TC4528 31-03-2018 Insurance claim under process.
• A statistical analysis of accidents occurred, model-wise and unit-wise, during April, 2017 to
March, 2018 is given in the annexure below:
98
7.Statutory Compliances
9999
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
100
Policy Procedural Regulatory a System Deficiency
Observation rating
7.1 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.
• It is observed that Employee contribution is short paid by Rs 2,784/- as per books. 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
Jan-18 8,88,323 8,87,358 (965) 9,72,361 9,72,361 - 15-02-2018 14-02-2018
Feb-18 8,88,975 8,87,624 (1,351) 9,74,169 9,74,169 - 15-03-2018 09-03-2018
Mar-18 8,90,439 8,89,971 (468) 9,75,223 9,75,3223 - 15-04-2018 11-04-2018
Total (2,784)
• It is explained to us that the differences are due to mismatch of Aadhaar details, due to which the employee details are not reflected in the
PF portal. The said employees are subsequently removed from company’s payroll. 101
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
paysheet Challan
Jan-18 1310 1306 (4)
Feb-18 1322 1319 (3)
Mar-18 1316 1315 (1)
• Details of PF contribution payable as per our calculation and as per books are as given below:
Employees
Employees Excess Employer's Employer’s Excess
Contribution as
Month Contribution /(Short) Annexure Contribution as per Contribution /(Short) Annexure
per our
payable as per books deduction our calculation payable as per books deduction
calculation
Jan-18 8,88,466 8,88,323 (143) 9,73,634 9,72,361 (1,273)
Feb-18 8,89,130 8,88,975 (155) 9,74,367 9,74,169 (198)
Mar-18 8,90,439 8,90,439 - 9,75,793 9,75,223 (570)
Total (298) (2,041)
102
Observation rating
Key Observations
• It is observed that employee contribution is short paid by Rs 3,082/- and employer contribution is short paid by Rs 2,041/-.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
Jan-18 8,88,466 8,87,358 (1,108) 9,73,634 9,72,361 (1,273)
Feb-18 8,89,130 8,87,624 (1,506) 9,74,367 9,74,169 (198)
Mar-18 8,90,439 8,89,971 (468) 9,75,793 9,75,223 (570)
Total (3,082) (2,041)
• It is explained to us that the differences are due to mismatch of Aadhaar details, due to which the employee details are not reflected in the
PF portal. The said employees are subsequently moved from company’s payroll.
103
Observation rating
7.2 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 352/- is short 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 Excess
contribution Excess Contribution Due Date of
Month Contribution Annexure Contribution /(Short) Date of Payment
paid as per /(Short) Paid paid as per Payment
as per books as per books Paid
challan challan
Jan-18 2,29,624 2,28,955 (669) - 15-02-2018 15-02-2018

6,19,937 6,19,937
Feb-18 2,30,232 2,30,117 (115) - 15-03-2018 12-03-2018

6,23,093 6,23,093
Mar-18 2,30,631 2,31,063 432 - 15-04-2018 09-04-2018

6,25,637 6,25,637
Total (352)
104
Observation rating
Key Observations
• It is observed that employee contribution is excess paid by Rs 10,152/- and employer contribution is short paid by Rs 22,043/-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
Jan-18 2,26,661 2,29,624 2,963 6,15,223 6,19,937 4,714
Feb-18 2,26,065 2,30,232 4,167 6,13,605 6,23,093 9,488
Mar-18 2,27,609 2,30,631 3,022 6,17,796 6,25,637 7,841
Total 10,152 22,043
105
Observation rating
Key Observations
• Details of ESI employee contribution payable as per our calculation and paid as per challan are as given below:
Jan'18 Feb'18 Mar'18
Particulars
Amount Amount Amount Amount Amount Amount
1 ESI payable as per our calculation 8,41,884 8,39,670 8,45,405
2 ESI paid as per challan 8,48,892 8,53,210 8,56,700
Excess/ (Short) paid 7,008 13,540 11,295
Reconciliation:
ESI short deducted and paid due to non
Less: consideration of washing allowance in gross (21,807) (15,122) (15,304)
salary
ESI excess deducted and paid due to non
Add: consideration of washing allowance in gross 26,375 27,544 25,436
salary
ESI wrongly paid twice in different-locations
Add: 1,875 552 591
(Excess payment)
Add: Difference in calculation as per portal(Round off 565 565 573
Diff)
Total difference 7,008 13,540 11,295
Annexure
106
Observation rating
7.3.1 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
Amount Paid as Excess/(Short)
Month Payable as per Due Date of Date of
per Challan Paid Month Location Delay in Days
books Payment Payment
Hyderabad 10-02-2018 09-02-2018 -
Jan-18 35,600 35,600 -
Kodad 10-02-2018 08-02-2018 -
Jan-18
Puttur 10-02-2018 08-02-2018 -
Feb-18 36,450 36,450 -
Bangalore 10-02-2018 09-02-2018 -
Mar-18 36,400 36,400 - Hyderabad 10-03-2018 06-03-2018 -
Kodad 10-03-2018 06-03-2018 -
Feb-18
• Details of difference in number of employees as per Puttur 10-03-2018 06-03-2018 -
pay-sheet & challan is as given below: Bangalore 10-03-2018 06-03-2018 -
Hyderabad 10-04-2018 10-04-2018 -
Kodad 10-04-2018 09-04-2018 -
Mar-18
Puttur 10-04-2018 09-04-2018 -
Bangalore 10-04-2018 10-04-2018 -
107
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 Amount Payable as Excess/(Short)
Month Annexure
as per books our Calculation Deduction
Jan-18 35,600 35,800 (200)
Feb-18 36,450 36,450 -
Mar-18 36,400 36,400 -
• Summary of month wise professional tax as per our calculations and paid as per challan is annexed below:
Amount Payable as Amount Paid as Excess/(Short)
Month Annexure
per our calculations per challan Paid
Jan-18 35,800 35,600 (200)
Feb-18 36,450 36,450 -
Mar-18 36,400 36,400 -
Total (200) 108

Observation rating
Key Observations
• Professional Tax for Tamilnadu for the period 1st October’17 to 31st March’18 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 October’17 to
1,36,645 1,30,980 (5,665) 31-03-2018 20-02-2018
31st March’18
• Professional tax for Tamilnadu for the period of 1st October’17 to 31st March’18 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 October’17 to
1,43,295 1,36,645 (6,650)
31st March’18
• Professional tax for Tamilnadu for the period of 1st October’17 to 31st March’18 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 October’17 to
1,43,295 1,30,980 (12,315)
31st March’18
109
Observation rating
7.4.1 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
Excess/(Short)
Month Paid Payable
paid
January 78,958 1,43,593 (64,635)
February 86,984 1,55,626 (68,642)
March 94,203 1,96,247 (1,02,044)
Total (2,35,321)
110
Observation rating
Key Observations
Summary of differences – January

Excess/(Short)
State Tax Paid Payable
paid
CGST 17,243 22,550 (5,307)
SGST 17,243 22,550 (5,307)
Andhra Pradesh
IGST 17,250 34,335 (17,085)
Total 51,735 78,744 (27,700)
CGST 2,322 8,716 (6,394)
SGST 2,322 8,716 (6,394)
Telangana
IGST 8,907 16,081 (7,175)
Total 13,550 33,513 (19,963)
CGST 6,496 9,575 (3,080)
SGST 6,496 9,575 (3,080)
Tamil Nadu
IGST 682 11,494 (10,813)
Total 13,673 30,645 (16,972)
111
Observation rating
Key Observations
Summary of differences – February

Excess/(Short)
paid
CGST 14,690 19,570 (4,880)
SGST 14,690 19,570 (4,880)
Andhra Pradesh
IGST 10,656 32,537 (21,881)
Total 40,035 71,676 (31,641)
CGST 8,801 12,497 (3,696)
SGST 8,801 12,497 (3,696)
Telangana
IGST 9,091 19,914 (10,823)
Total 26,693 44,909 (18,216)
CGST 8,748 13,151 (4,403)
SGST 8,748 13,151 (4,403)
Tamil Nadu
IGST 2,761 12,740 (9,979)
Total 20,256 39,042 (18,786)
112
Observation rating
Key Observations
Summary of differences – March

Excess/(Short)
paid
CGST 14,896 23,388 (8,492)
SGST 14,896 23,388 (8,492)
Andhra Pradesh
IGST 14,337 31,968 (17,631)
Total 44,129 78,744 (34,615)
CGST 4,449 27,530 (23,081)
SGST 4,449 27,530 (23,081)
Telangana
IGST 14,254 25,905 (11,651)
Total 23,152 80,964 (57,812)
CGST 8,039 13,416 (5,377)
SGST 8,039 13,416 (5,377)
Tamil Nadu
IGST 10,844 9,706 1,138
Total 26,922 36,539 (9,617)
113
Observation rating
Key Observations
• It is observed that there are differences in GST output/input claimed as per books of accounts and as per GSTR3B. Details of the same are
given in the below annexure:
Input as per Input as per GSTR (Excess)/Short

State Month
books 3B claimed
January'18 14,78,690 14,78,690 -
Telangana February'18 35,20,347 35,20,347 -
March'18 22,21,451 22,21,451 -
Total 72,20,488 72,20,488 0
January'18 16,92,364 17,00,001 (7,637)
Tamilnadu February'18 16,88,600 16,88,600 -
March'18 19,18,221 19,18,222 (1)
Total 52,99,185 53,06,823 (7,638)
January'18 3,19,53,028 3,19,45,390 7,638
Andhra Pradesh February'18 20,32,511 20,32,511 -
March'18 1,04,23,970 1,04,59,200 (35,230)
Total 4,44,09,509 4,44,37,101 (27,592)
114
Observation rating
Key Observations
• It is observed that there are differences in GST output/input claimed as per books of accounts /as per GSTR3B and GSTR 2A. Summary for the
period July’17 to March’18 are as below:
(Excess)/Short (Excess)/Short
Input claimed as Input as per Input as per
State input in GSTR 2A input in GSTR 2A
per GSTR 3B books GSTR 2A
over Books over GSTR 3B
Andhra Pradesh 7,19,84,451 7,52,43,043 7,65,77,180 (13,34,137) (45,92,729)
Telangana 3,26,78,657 3,29,32,644 3,66,46,790 (37,14,146) (39,68,133)
Tamil Nadu 1,26,06,507 1,34,98,921 1,24,04,826 10,94,095 2,01,681
Karnataka 4,950 4,950 15,989 (11,039) (11,039)
Kerala 5,176 5,062 - 5,062 5,176
Orissa - - 561 (561) (561)
Maharashtra 4,320 5,760 1,440 4,320 2,880
Total 11,72,84,061 12,16,90,380 12,56,46,786 (39,56,406) (83,62,724)
• It is observed that on 31-01-2018, raw material revenue in unit-1 for 21.52 tonnes ((D.C.No-701174795) amounting to Rs. 17,521/- is
accounted in books of accounts but the same is not billed to RCL. 115
Observation rating
Key Observations
• It is observed that GST input of Rs.42,242/- and output of Rs.159/- is accounted under wrong GST ledgers. Details of the same are as given in
the below annexure:
To be Actually
Month Amount
accounted in accounted in
Output to be Output actually
IGST CGST&SGST 5,141 Month Amount
January accounted in accounted in
CGST&SGST IGST -
January IGST CGST&SGST 159
IGST CGST&SGST 6,196
February
CGST&SGST IGST 63
IGST CGST&SGST 25,045
March
CGST&SGST IGST 5,797
Total 42,242
• It is observed that GST input of Rs.14,464/- is accounted under wrong locations. Details of the same are given in the below annexure:
Input-
Location Input-IGST Input-CGST Total GST
SGST
TN 423 423 846

TS 11,619 - - 11,619
116
Observation rating
Key Observations
• It is observed that GSTIN of ALPL is not found on 29 invoices and GST input is claimed. Details of the same are as given below:
Number of
CGST SGST IGST Total GST
invoices
29 21,160 21,160 1,222 43,542
• 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
(507.5) (507.5) (496)
as per books
Excess accounted
950 950 1079
as per books
Total (443) (443) (583)
• 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.
117
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. Further, in respect of input claim of GST on insurance premiums of vehicles, it is
observed that for vehicles is located in one state but the input claim is made in another state. Details of the same are as given below:
Month State Ineligible Input

SGST CGST IGST
January'18 AP - - 4,28,716
Total - - 4,28,716
TN - - 78,596
February'18
TS 2,11,728 2,11,728 763
Total 2,11,728 2,11,728 79,359
AP 736 736 85,060
March'18 TN - - 69,076
TS 46,597 46,597 -
Total 47,333 47,333 1,54,136
118
Observation rating
Return filing details
• GSTR 3B filing details: State Return Period Due date of filing Date of filing Delay in days
January'18 20-02-2018 19-02-2018 -
Andhra Pradesh February'18 20-03-2018 19-03-2018 -
March'18 20-04-2018 20-04-2018 -
January'18 20-02-2018 20-02-2018 -
Telangana February'18 20-03-2018 19-03-2018 -
March'18 20-04-2018 21-04-2018 1
January'18 20-02-2018 20-02-2018 -
Karnataka February'18 20-03-2018 19-03-2018 -
March'18 20-04-2018 20-04-2018 -
January'18 20-02-2018 20-02-2018 -
Tamil Nadu February'18 20-03-2018 19-03-2018 -
March'18 20-04-2018 20-04-2018 -
January'18 20-02-2018 20-02-2018 -
Kerala February'18 20-03-2018 19-03-2018 -
March'18 20-04-2018 20-04-2018 -
January'18 20-02-2018 20-02-2018 -
Orissa February'18 20-03-2018 19-03-2018 -
March'18 20-04-2018 20-04-2018 -
January'18 20-02-2018 19-02-2018 -
Maharashtra February'18 20-03-2018 19-03-2018 -
March'18 20-04-2018 20-04-2018 -
January'18 20-02-2018 19-02-2018 -
Goa February'18 20-03-2018 19-03-2018 -
March'18 20-04-2018 20-04-2018 -
January'18 20-02-2018 20-02-2018 -
Pondicherry February'18 20-03-2018 20-03-2018 -
March'18 20-04-2018 20-04-2018 - 119
Observation rating
Return filing details
• GSTR 1 filing details: State Return Period Due date of filing Date of filing Delay in days
January'18 10-03-2018 08-03-2018 -
Andhra Pradesh February'18 10-04-2018 09-04-2018 -
March'18 10-05-2018 08-05-2018 -
January'18 10-03-2018 06-03-2018 -
Telangana February'18 10-04-2018 09-04-2018 -
March'18 10-05-2018 08-05-2018 -
January'18 10-03-2018 06-03-2018 -
Karnataka February'18 10-04-2018 09-04-2018 -
March'18 10-05-2018 08-05-2018 -
January'18 10-03-2018 06-03-2018 -
Tamil Nadu February'18 10-04-2018 09-04-2018 -
March'18 10-05-2018 08-05-2018 -
January'18 10-03-2018 06-03-2018 -
Kerala February'18 10-04-2018 09-04-2018 -
March'18 10-05-2018 08-05-2018 -
January'18 10-03-2018 06-03-2018 -
Orissa February'18 10-04-2018 09-04-2018 -
March'18 10-05-2018 08-05-2018 -
January'18 10-03-2018 06-03-2018 -
Maharashtra February'18 10-04-2018 09-04-2018 -
March'18 10-05-2018 08-05-2018 -
January'18 10-03-2018 06-03-2018 -
Goa February'18 10-04-2018 09-04-2018 -
March'18 10-05-2018 08-05-2018 -
January'18 10-03-2018 06-03-2018 -
Pondicherry February'18 10-04-2018 09-04-2018 -
March'18 10-05-2018 08-05-2018 - 120
Observation rating
7.5 Remittance of TDS HIGH MED LOW
Key Observations
• During the Period from 1st Jan 2018 to 31st Mar 2018 charges are paid to RCL for unloading of Return Load at the factory amounting to `
8,36,137/-. Tax has not been deducted on the same amounting to ` 14,172/- and Interest for Non-deduction of TDS amounting to ` 1,084/-
Also, GST is being charged by RCL, the input of which is not claimed.
• An amount of ` 3,02,279/- from January’18 to March’18 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.
121
Observation rating
7.6 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 :
Unit 1 Unit 2 Unit 3 Unit 4 Unit 7
126
8.Finance & Accounts
12
123
3
Observation rating
8.1 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 1st
June, 2018. 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:
 Late Delivery Charges

 Late Delivery charges of Rs.29,09,322/- had been paid to RCL towards delay in delivery of goods for the period from April 2017 to March
2018 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.
124
Observation rating
8.2 Accounting for Revenue HIGH MED LOW
Key Observations
• The following scheme of entries is followed for recognition of revenue:
Revenue Recognition(automatic entry from web portal) Billing to Customer:
Provision for Freight Income A/c Dr; Customer A/c Dr
To Revenue A/c To Provision for Freight Income A/c
• It is observed there are manual entries amounting to ` 11.39 Crores are passed in the provision for Freight Income ledger. The
adjustment entries are on account of short/excess posting of revenue. Also in many cases the closing balance in the provision ledger is
transferred to RCL/Other Customer’s account. The tripwise/DC wise details are not available for the same and could not be verified.
• Summary of revenue booked, bills raised and adjustment entries from April 2017 to March 2018 is as given below. The adjustment
entries passed are given in the annexure below.
Opening Revenue Adjustment Closing

Particulars Bills Raised Difference
Balance booked Entries Passed Balance
Cement Freight - 2,29,15,96,674 (2,30,32,65,990) (1,16,69,316) 1,16,69,316 -
Raw Material & Return load Freight - 51,03,59,427 (54,76,68,633) (3,73,09,206) 3,73,09,206 -
Return Load Market Freight - 18,22,21,362 (14,56,98,923) 3,65,22,439 (3,65,22,440) (1)
DRDS Freight 5,495 18,39,86,121 (15,56,36,364) 2,83,49,757 (2,83,55,253) -
125
Observation rating
8.2 Accounting for Revenue HIGH MED LOW
Potential impact/ Risk(s) faced
• Revenue leakage in instances of short posting of revenue from the web portal and manual entries being passed for the same.
Recommendations
• To ensure that correct entries are posted for revenue from Web portal.
• To reconcile the provision ledger and necessary workings be maintained for all the adjustment entries passed.
126
Observation rating
Key Observations
• Sundry Debtors having Credit Balances: It is observed that few sundry debtors are having credit balances. These are advances received for
which income is yet to be booked or these amounts are to be refunded. Details of such debtors along with ageing is given in the annexure
below:
Oustanding for
Particulars 30 days - 120 More than
days 120 days
Amount in ` 1,12,200 -
No of Debtors 1 -
• Sundry Creditors having Debit Balances: It is observed that few sundry creditors(other than drivers) are having debit balances. These are
advances given for which expense is yet to be booked or these amounts are to be received. Details of such creditors along with ageing is given
in the annexure below:
Oustanding for
Particulars Less than 30 30 days - 120 More than
days days 120 days
Amount in ` 1,93,312 8,60,204 5,97,880
No of Creditors 14 15 42
127
Observation rating
Key Observations
• Staff Advances Outstanding: It is observed that few employee accounts are having debit balances outstanding for more than 90 days as on
31st March, 2018. Details are given below:
Oustanding for
Vendor Outstanding More
Vendor Code Vendor Name Below 30 30 days - Remarks(Text mentioned in SAP)
Category from than 120
days 120 days
days
T RAMENH CEMENT BAGS AMT CQ RET
EM00011824 T RAMESH SCEM 14-12-2016
- - 1,38,600 ON 14.12.16
EM00011789 M M.SREENIVASULU SCEM 20-05-2017
- - 5,909
EM00012383 P ANTHONY SCEM 03-04-2017 PATRICK ANTHONY-ADV PAYMENT
- - 10,000
128
9.Unit Visit
12
129
9
9.1 Unit Visit - Kodad Observation rating
HIGH MED LOW
Key Observations
• We have made a surprise visit to Unit-1 Kodad on 12-June -2018. Following are our observations:
• We have physically verified the cash on hand, the differences noted are as below:
Balance as per Physical Cash Difference

Date and Time Remarks Snapshots
Books Balance [(Short)/Excess]
12th Jun 2018,

` 4,07,982/- ` 4,07,964/- (18)/- -
10:22:00 AM
• We have also carried physical verification of stock held at stores. We have verified 141 items and no discrepancies were found.
• We have also carried out physical verification of tyres and no discrepancies were observed.
• On verifying the diesel stock at the unit, we had noted a short stock of 6202.58 Ltrs. Details are given in the annexure below.
130
9.2 Unit Visit - Peapully Observation rating
Key Observations HIGH MED LOW
• We have made a surprise visit to Unit-2 Peapully on 11-June-2018. Following are our observations:
• We have physically verified the cash on hand, the differences noted are as below:
Balance as per Physical Cash Difference
Date and Time Remarks Snapshots
Books Balance [(Short)/Excess]
11th June 2017,

` 1,65,228/- ` 1,65,228/- - -
12:20:00 AM
• We have also carried physical verification of stock held at stores. We have verified 153 items and noted differences in 7 items. The
details are given in the annexure below.
• We have also carried out physical verification of tyres 72 tyres were found short. Reconciliation of the same is attached below.
On verifying the diesel stock at the unit, we had noted an short stock of 1,582.86 Ltrs. Details are given in the annexure below.
131
9.3 Unit Visit – Tyre Retreading Plant Observation rating
HIGH MED LOW
Key Observations
• We have made a visit to Tyre retreading plant on 9th -June-2018. We have identified some differences in stock as per books and physical stock,
the details are given in the annexure below:
Particulars `
Excess Short 47,373

Short stock (67,172)
• We have also carried out physical verification of Tyres and no discrepancies were noted.
132
10.Other Areas Covered
13
133
3
Observation rating
10.1 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 January to March 2018 is as follows.
Eligible but not

Unit Not eligible but paid Eligible and Short paid
paid
UNIT-1, KODAD 12,500 (500) 1,250
UNIT-2, PEAPULLY 11,000 - -
UNIT-4, HOSUR 500 (3,000) 500
UNIT5-ANAKAPALLY - - 1,500
HEAD OFFICE 22,000 - -

RMC-TELLAPUR 1,000 - -
VISHAKAPATNAM - (750) -
Total 47,000 (4,250) 2750
134
Observation rating
10.1 HEMM Incentives HIGH MED LOW
Key Observations
• HEMM Incentives: HEMM Incentives are paid todrivers supplied to RCL Factory based on their performance. Details of eligible amount
is received from RCL and the same is paid to the drivers. However the dumper operator-wise details of HEMM - 1 based on which the
incentives are calculated are not available, therefore could not be verified. Incentives paid to HEMM – 2 have been verified and we
have observed the following:
a. Payments made to Excavator workers: As per the circular, only dumper operators are only eligible for incentives, where as
incentives are being paid for excavator workers also. The Summary of payment made during the quarter ended March 2018 is
shown below.
Employee ID Employee Name Designation January February March
2050 SM BASHA EXE.OPTR 665 1,149 870
2068 T.SRI HARI(2068) EXE.OPTR 466 1,010 1,005
2190 K.CHANDRA(2190) EXE.OPTR 808 1,386 1,185
2224 M.CHANDRASEKHAR(2224) EXE.OPTR 862 1,042 973
2234 S.MAQBUL(2234) EXE.OPTR 894 1,056 822
2310 S HUSSAINVALI(2310) EXE.OPTR 504 695 992
2385 S.K.KHADRI(2385) EXE.OPTR 924 1,036 951
2443 SK.RIYAZ BASHA(2443) EXE.OPTR 989 374 638
Total 6,112 7,748 7,436
b. Discrepancies in payments made to the operators: The differences (excess)/Short payments noticed are annexed herewith.
(Excess) Paid Short Paid Net of Short/ (Excess)

(2,338) 985 (1,353) 135
Observation rating
10.1 Relief and Vigilance Incentives HIGH MED LOW
Key Observations
• Relief & Vigilance : Vigilance incentives are paid to vigilance officers and corresponding recoveries are made from the drivers. These
incentives and recoveries are made based on the report with the Relief and vigilance department. Vigilance incentives and
corresponding recoveries were verified for the months of January to March based on the data given to us by the Vigilance department
and it was found that in 1 instance short incentive is given to vigilance officer amounting to ` 7500/- for which details are given in the
following annexure.
• Instance of Short payment of Incentive:
Vigilance Employee Incentive Incentive Short/(Excess)

S.no Date Time Remarks
officer code Eligible paid incentive
1 09-03-2018 11:45 PM B Kantha Rao EM00012666 7,500 - 7,500 Driver Drunken driving
136
Observation rating
10.1 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:
Closing stock as per
Closing stock as per Difference
Month Own -bunks Certification copy
books(Ltrs) Excess/(Short) Ltrs
received from units(Ltrs)
Unit -1 25,305 24,941 (364)
Unit -2 22,500 22,829 329
Jan Unit -3 32,189 32,189 -
Unit- 4 35,232 35,117 (115)
Unit -7 11,759 11,758 (1)
Unit -1 32,004 31,924 (80)
Unit -2 26,872 26,747 (125)
Feb Unit -3 39,396 39,396 (0)
Unit -4 22,092 26,902 4,810
Unit -7 14,720 14,720 -
Unit -1 9,896 9,881 (15)
Unit -2 38,333 38,774 441
March Unit -3 14,977 14,977 -
Unit -4 36,800 36,684 (116)
Unit -7 16,915 16,915 -
137
Observation rating
10.1 Diesel Reconciliation HIGH MED LOW
Key Observations
• Diesel Reconciliation of stock : It is observed that there are discrepancies in closing stock of diesel in own bunks as per books of accounts
and as per physical dip balances in certified copies received from the units as on 31/03/2018 (F.Y-2017-18), the same are to be adjusted in
books of accounts . Details of the same are as given below:
Actual stock(ltrs) as per Difference

Own - Closing stock as
Dip verification(Physical Excess/(Short)
bunks per books (Ltrs)
verification) (ltrs)
Unit -1 9,896 6,529 3,367
Unit -2 38,333 38,530 (197)
Unit -3 14,977 15,256 (279)
Unit -4 36,800 37,112 (312)
Unit -7 16,915 15,385 1,530
• Diesel Reconciliation of Consumption ledger: Upon the verification of own bunks diesel consumption ledgers, the consumption in Unit-2 for
the month of January’18 as per books is 2,38,434 ltrs and as per certification copies received from unit is 2,38,548 ltrs resulting in short
consumption of 113 ltrs .
138
Observation rating
10.1 Other areas covered HIGH MED LOW
Key Observations
During the course of our audit we have covered the following other areas:
• Incentive Payments made to RMC Plant Employees: An amount of ` 62,776/- was paid as incentives to employees working at Tellapur
RMC plant for which no circular is available on record with regards to the amount to be paid to employees vis-à-vis their designation.
Therefore we could not verify the amounts to be paid to the employees. Detailed statement is annexed herewith.
• Tyre Incentives: Targets have not been achieved during any month of the quarter, hence no incentive payment has been made.
• RCL Ledger Reconciliation : No discrepancies were noted.
• Driver Settlements: We have verified the accounts of all the removed, resigned and forfeited drivers till 31.03.2018. The balances
receivable/payable to the drivers as on 14.07.2018 is given in the following annexures.
Number of Drivers Amount payable Annexure
400 11,83,330
139

Arunachala Logistics Private Limited

Transféré par

Informations du document

Description originale:

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Arunachala Logistics Private Limited

Transféré par

Droits d'auteur :

Formats disponibles

Arunachala Logistics Private Limited

Internal Audit Report

Kodad 6,139 6,139 100.00%

Peapully 3,437 3,437 100.00%

Puttur 2,270 2,270 100.00%

Hosur 3,714 3,714 100.00%

Coimbatore 776 776 100.00%

Total 16,336 16,336 100.00%

No of Trips Verified 5% Kodad

Unit No of Slips generated No of Slips Verified Percentage of Verification

Kodad 876 876 100.00%

Peapully 594 594 100.00%

Puttur 358 358 100.00%

Hosur 553 553 100.00%

Coimbatore 160 160 100.00%

Total 2,541 2,541 100.00%

1.1 Excess/short diesel recoveries & incentives HIGH MED LOW

Key Observations Key Observations

 Summary of variances noted upon verification are given in the

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

 The consumption of diesel for the trip undertaken is computed

 The actual consumption of diesel is determined on the strength of

1.1 Excess/short diesel recoveries & incentives HIGH MED LOW

34,44,379 34,51,881 1,502 35,34,055 35,45,334 (11,279)

Excess Recovery made 33,878 Short Incentive paid 12,960

1.1 Excess/short diesel recoveries & incentives HIGH MED LOW

Key Observations - Kodad

10,86,513 10,98,847 12,335 21,29,968 21,35,981 (6,012)

Kodad Break Up Break Up

Link to Driver-Wise summary

1.1 Excess/short diesel recoveries & incentives HIGH MED LOW

Key Observations – Peapully

9,81,454 9,65,850 (15,604) 6,67,284 6,72,842 (5,198)

Link to Driver-Wise summary

1.1 Excess/short diesel recoveries & incentives HIGH MED LOW

Key Observations - Puttur

Key Observations - Hosur

Link to Driver-Wise summary

1.1 Excess/short diesel recoveries & incentives HIGH MED LOW

Key Observations - Coimbatore

Link to Driver-Wise summary

1.1.1 Excess/short diesel recoveries HIGH MED LOW

Kodad 8,024 7,029 995 7,904 6,909

Peapully 64,385 22,416 41,968 34,744 (7,225)

Hosur 5,173 4,857 316 5,173 4,857

Coimbatore 4,462 4,462 - 3,244 3,244

Total 82,044 38,764 43,279 51,065 7,785

1.1.1 Excess/short diesel recoveries HIGH MED LOW

Hosur 6,144 7,792 - (1,648) (1,648) 1,648

1.1.1 Excess/short diesel recoveries HIGH MED LOW

Non Updation of KMPL in portal

Kodad 8,402 10,791 2,390

Peapully 637 (449) (1,086)

Coimbatore 1,475 1,801 326

Total 10,514 12,143 1,630

1.1.1 Excess/short diesel recoveries HIGH MED LOW

Kodad 1,837 - 1,837 88.5 (1,748) 1,748

Peapully 6,899 - 6,899 304 (6,595) 6,595

Puttur 8,460 6,592 1,868 204 (1,665) 1,665

Hosur 4,527 - 4,527 3,971 (556) 556

Total 21,769 6,592 15,177 4567.5 (10,610) 10,610

1.1.1 Excess/short diesel recoveries HIGH MED LOW