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Ashok Leyland Ltd.

BSE: 500477 Sector: Auto
NSE: ASHOKLEY ISIN Code: INE208A01029
BSE 00:00 | 23 Oct 81.85 2.60
(3.28%)
OPEN

79.40

HIGH

83.50

LOW

78.55

NSE 00:00 | 23 Oct 81.80 2.55
(3.22%)
OPEN

79.55

HIGH

83.50

LOW

78.55

OPEN 79.40
PREVIOUS CLOSE 79.25
VOLUME 4630204
52-Week high 87.50
52-Week low 33.70
P/E
Mkt Cap.(Rs cr) 24,027
Buy Price 81.60
Buy Qty 9496.00
Sell Price 81.70
Sell Qty 180.00
OPEN 79.40
CLOSE 79.25
VOLUME 4630204
52-Week high 87.50
52-Week low 33.70
P/E
Mkt Cap.(Rs cr) 24,027
Buy Price 81.60
Buy Qty 9496.00
Sell Price 81.70
Sell Qty 180.00

Ashok Leyland Ltd. (ASHOKLEY) - Auditors Report

Company auditors report

To the Members of Ashok Leyland Limited

Report on the audit of the Standalone Ind AS financial statements

Opinion

1. We have audited the accompanying Standalone Ind AS financial statements of AshokLeyland Limited ("the Company") which comprise the Balance Sheet as at March31 2020 and the Statement of Profit and Loss (including Other Comprehensive Loss)Statement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2020 and TotalComprehensive Income (comprising of profit and other comprehensive loss) changes inequity and its cash flows for the year then ended.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditors' Responsibilities for the Audit of the Standalone Ind ASFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of theStandalone Ind AS financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

4. We draw your attention to Note 3.19 of the Standalone Ind AS financial statementwhich explains the uncertainties and the management's assessment of the financial impactdue to lockdowns and other restrictions and conditions related to the COVID - 19 pandemicsituation for which a definitive assessment of the impact in the subsequent period ishighly dependent upon circumstances as they evolve.

Our opinion is not modified in respect of this matter.

Key audit matters

5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind As financial statements of the currentperiod. These matters were addressed in the context of our audit of the Standalone Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Key audit matter description How our audit addressed the key audit matter
I. Impairment
a. Carrying value of Investments in equity instruments of subsidiaries joint ventures and associates As part of our audit our procedures included the following:

(Refer to Note 1B.17 Note 1B.11 and Note 1C to the Standalone Ind AS financial statements regarding the recognition valuation and disclosure methods of equity instruments in subsidiaries joint ventures and associates ‘Impairment Losses' and ‘Critical accounting judgements and key sources of estimation uncertainty' respectively)

• We obtained an understanding and assessed the design implementation and operating effectiveness of management's relevant internal controls to identify whether there are any indicators of impairment and where such indicators exists the method by which the recoverable amount is determined by the management. Specifically we focused on management controls to conclude on the appropriateness of future cash flows (including terminal cash flow) and key assumptions used in arriving at the recoverable amount and fair value as applicable.

In the Standalone Ind AS financial statements of the Company the gross carrying value of equity investments in subsidiaries joint ventures and associates is Rs. 3452.51 crores against which a cumulative provision for impairment of Rs. 1025.29 crores is outstanding as at March 31 2020. • We evaluated the following:
Determination of carrying value of investments is a key audit matter as the amounts are significant to the financial statements and the determination of recoverable value and/or impairment assessment involves significant management judgement. - terminal growth rate by comparing with the long-term outlook based on the relevant macroeconomic outlook for the geography in which the entities are operating.
The key inputs and judgements involved in the model for impairment assessment of investments include future cash flows of the respective entities the discount rate and the long-term growth rates used. - discount rate by comparing it with an independently calculated discount rate.
- budgets considering growth and other cash flow projections provided by the Company's management and compared these with the actual results of earlier years to assess the appropriateness of forecast.
- the competence capabilities and objectivity of the management's expert involved in the valuation process.

 

b. Fair value of investment in other equity instruments • We along with the auditors' experts evaluated the appropriateness of the measurement model and reasonableness of key assumptions like terminal growth rate discount rate.
(Refer to Note 1B.17 and Note 1C to the Standalone Ind AS financial statements regarding the recognition valuation and disclosure methods of equity instruments in others' and ‘Critical accounting judgements and key sources of estimation uncertainty' respectively) • We performed sensitivity tests on the model by analysing the impact of using other possible growth rates and discount rates within a reasonable and foreseeable range.
In the Standalone Ind AS financial statements of the Company equity investments in others is Rs. 203.21 crores valued at fair value on a recurring basis and where no listed price in an active market is available. • We evaluated the adequacy of the disclosures made in the Standalone Ind AS financial statements.
The valuation of these other equity instruments is a key audit matter as the determination of fair value involves significant management judgement as no active market observable inputs are available. • Based on the above procedures performed we did not identify any significant exceptions in the management's assessment in relation to the carrying value of equity investments in subsidiaries joint venture and associates; carrying value of net assets of LCV business; and that of fair value of investment in other equity instruments.
The key inputs and judgements involved in the model for fair value assessment of investments include future cash flows of the respective entities the discount rate and the long-term growth rates used.
c. Carrying value of the net assets of cash generating unit (including goodwill) of Light Commercial Vehicle business
(Refer to Note 1B.11 and Note 1C to the Standalone Ind AS financial statements regarding the ‘Impairment Losses' and ‘Critical accounting judgements and key sources of estimation uncertainty' on the recognition valuation and disclosure methods respectively)
In the Standalone Ind AS financial statements of the Company the carrying value of net assets of cash generating unit (including goodwill) of the Light Commercial Vehicle business (‘LCV') is Rs. 690.65 crores as at March 31 2020.
As per Ind AS 36 Impairment of Assets the Company is required to assess annually impairment of goodwill acquired in business combination.
The carrying value of net assets of cash generating unit (including goodwill) of LCV business is a key audit matter due to the amount involved and the underlying complexity of the measurement model.
The key inputs and judgements involved in the carrying value assessment of LCV business include future cash flows of the business the discount rate and the long-term growth rates used.
II. Assessment of provision for warranty obligations
(Refer to Note 1B.14 Note 1.20 Note 1.29 and Note 1C to the Standalone Ind AS financial statements regarding the ‘Provisions– Warranties' for recognition and valuation methods Non-Current Provisions and Current Provisions respectively and ‘Critical accounting judgements and key sources of estimation uncertainty – Provision for product warranty' respectively) As part of our audit our procedures included the following:
• We obtained an understanding and assessed the design implementation and operating effectiveness of management's relevant internal controls with regards to the appropriateness of recording of warranty claims provisioning of warranty and the periodic review of provision created.
In the Standalone Ind AS financial statements the Company has recognised a provision of Rs. 312.76 crores for warranty obligations as on March 31 2020. • We also involved our auditors' specialist to verify the appropriateness of the process and controls around IT systems as established by the management. Specifically we focused on controls around periodic review of warranty provision and that around the appropriateness and adequacy of provision.

 

We determined this matter as key audit matter since the product warranty obligations and estimations thereof are determined by management using a model which incorporates historical information on the type of product nature frequency and average cost of warranty claims the estimates regarding possible future incidences of product failures and discount rate. Changes in estimated frequency and amount of future warranty claims can materially affect warranty expenses. • We evaluated the model used by the management for provisioning of warranty to evaluate on the appropriateness of the methodology followed by the management and the mathematical accuracy of the model. To this effect we evaluated the following:
- the inputs to the model were verified on a sample basis with historical cost inputs on actual claims incurred and historical sales data of the Company.
- we compared the amount of provisions from prior year with actual claims processed during the period in order to verify the reasonableness of the forecast.
- the discount rate used for arriving at the present value of obligation was verified for reasonableness and the mathematical accuracy of the present value of the obligation was verified.
Based on the above procedures performed we consider the provision for warranty obligations to be reasonable.

III. Capitalisation of Internally Generated Intangible Assets (ITA) and IntangibleUnder Development (ITUD):

(Refer to Note 1B.10 Note 1B.11 and Note 1C to the Standalone Ind AS financial statements regarding the recognition amortisation of Intangible Asset ‘Impairment Losses' and ‘Critical accounting judgements and key sources of estimation uncertainty' respectively) As part of our audit our procedures included the following:
The Company has capitalised Rs. 655.37 crores of intangibles (developed technical knowhow) during the year and has an amount of Rs. 173.17 crores under development as at March 31 2020 for new vehicle technology relating to design emission and other intangible assets. • We obtained an understanding and assessed the design implementation and operating effectiveness of relevant internal controls with regard to the classification of development expenditure and their capitalisation and evaluation of impairment for internally generated intangible assets;
The appropriateness of ITA and ITUD capitalised is a key audit matter due the judgement involved in assessing if the cost meets the capitalisation criteria dependency of the business on the assets capitalised/ under capitalisation and key assumptions used in the measurement model for impairment. • We confirmed that the development projects for intangible assets and its impairment assessment were approved by the committee appointed by the Board;
The measurement model used for review of impairment of these ITA depends largely on management's assessment with regard to the appropriateness of estimated future cash flows and the discount rates used. Hence there are significant estimates and judgements involved in determining the above. • Tested the capitalisation of project related expenses incurred during the year with underlying documents relating to material costs directly attributable overheads designing cost software expenses testing charges and employee hours incurred to verify existence and appropriateness of classification of research and development;
• With regard to the impairment assessment model we evaluated the following:
- discount rate by comparing it with an independently calculated discount rate;
- budgets considering growth and other cash flow projections provided by the Company's management;
- the competence capabilities and objectivity of the management personnel involved in the valuation process;
• We along with the auditors' experts evaluated the appropriateness of the measurement model and reasonableness of key assumption like discount rate.
• We performed sensitivity tests on the model by analysing the impact of using other possible growth rates and discount rates within a reasonable and foreseeable range.
• We evaluated the adequacy of the disclosures made in the Standalone Ind AS financial statements.
• Based on the above procedures performed we did not identify any significant exceptions in the management's assessment in relation to the capitalisation of ITA and ITUD.

Other Information

6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report (i.e. Board's reportReport on Corporate Governance and Management Discussion and Analysis Report) but does notinclude the Standalone Ind AS financial statements and our auditor's report thereon.

Our opinion on the Standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the Standalone IndAS financial statements

7. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Standalone Ind AS financialstatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

8. In preparing the Standalone Ind AS financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the Company's financial reporting process.

Auditors' responsibilities for the audit of the Standalone Ind AS financial statements

9. Our objectives are to obtain reasonable assurance about whether the Standalone IndAS financial statements as a whole are free from material misstatement whether due tofraud or error and to issue an auditors' report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Ind AS financialstatements.

10. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to Standalone Ind AS financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Standalone Ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors' report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the Standalone IndAS financial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

11. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

12. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

13. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the Standalone Ind ASfinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on other legal and regulatory requirements

14. As required by the Companies (Auditors' Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the Annexure B a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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

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

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveloss) the Statement of Changes in Equity and Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid Standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure A".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS financial statements– Refer Note 3.9 to theStandalone Ind AS financial statements;

(ii) The Company has long-term contracts including derivative contracts as at March 312020 for which there were no material foreseeable losses;

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;

(iv) The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2020.

16. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

For Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number: 304026E/E-300009 Chartered Accountants

ANNEXURE A TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 15 [f] of the Independent Auditors' Report of even date to themembers of Ashok Leyland Limited on the Standalone Ind AS financial statements as of andfor the year ended March 31 2020

Report on the Internal Financial Controls with reference to financial statements underClause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financialstatements of Ashok Leyland Company ("the Company") as of March 31 2020 inconjunction with our audit of the Standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing deemedto be prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditors'judgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2020 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. (Also refer paragraph 4 of theIndependent Auditors' Report)

ANNEXURE B TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 14 of the Independent Auditors' Report of even date to themembers of Ashok Leyland Limited on the Standalone Ind AS financial statements as of andfor the year ended March 31 2020

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets (Property plant and equipment andIntangible Assets).

(b) The Property plant and equipment are physically verified by the Managementaccording to a phased programme designed to cover all the items over a period of threeyears which in our opinion is reasonable having regard to the size of the Company andthe nature of its assets. Pursuant to the programme a portion of the property plant andequipment has been physically verified by the Management during the year and no materialdiscrepancies have been noticed on such verification.

(c) According to the information and explanations given to us and the records examinedby us the title deeds of immovable properties as disclosed in Note 1.1 on Propertyplant and equipment and Note 1.1A on Right-of-use asset to the Standalone Ind AS financialstatements are held in the name of the Company except for as stated in Sub Notes 1 2and 7 to Note 1.1 and in Note 1.1A to the Standalone Ind AS financial statements.

ii. The physical verification of inventory excluding stocks with third parties havebeen conducted at reasonable intervals by the Management during the year. In respect ofinventory lying with third parties these have substantially been confirmed by them.

The discrepancies noticed on physical verification of inventory as compared to book andrecords were not material and have been appropriately dealt with in the books of accounts.

iii. The Company has granted unsecured loans to a subsidiary and to a company coveredin the register maintained under Section 189 of the Act. The Company has not granted anysecured/ unsecured loans to firms /LLPs/ other parties covered in the register maintainedunder Section 189 of the Act.

(a) In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prejudicial to the Company's interest.

(b) In respect of the aforesaid loans the schedule of repayment of principal andpayment of interest has been stipulated and the parties are repaying the principalamounts as stipulated and are also regular in payment of interest as applicable.

(c) In respect of the aforesaid loans there is no amount which is overdue for morethan ninety days.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of the loans and investments made and guarantees and security provided by it.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingthe undisputed statutory dues including provident fund employees' state insuranceincome tax sales tax service tax duty of customs duty of excise value added taxcess goods and service tax and other material statutory dues as applicable with theappropriate authorities. Also refer note 3.9 to the financial statements regardingmanagement's assessment on certain matters relating to provident fund.

Further for the period March 1 2020 to March 31 2020 the Company has paid Goods andService Tax and filed GSTR 3B (after the due date but) within the timelines allowed by(Central Board of Indirect Taxes and Customs (CBEC) under the Notification Number. 31/2020dated April 03 2020 on fulfilment of conditions specified therein.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income-tax and goods and service tax whichhave not been deposited on account of any dispute. The particulars of dues of sales taxservice tax duty of customs duty of excise value added tax as at March 31

2020 which have not been deposited on account of a dispute are as follows:

Name of Statute Nature of Dues Amount (in crores) Period to which the amount relates Forum where the dispute is pending
State and Central Sales Tax Act Sales tax and Value added 335.93 Various periods from 1985 - 2017 Appellate Authority - upto Commissioner Level
111.49 Various periods from 1987 - 2013 Appellate Authority - Tribunal
1.09 Various periods from 2006 - 2011 High Court
Central Excise Act 1944 Excise duty and Cess thereon 0.13 Various periods from 1993 - 2016 Appellate Authority - upto Commissioner Level
3.15 Various periods from 1996 - 2014 Appellate Authority - Tribunal
0.45 Various periods from 1996 - 2014 High Court
Customs Act 1962 Customs Duty 0.02 Various periods from 2006 - 2007 Appellate Authority - Tribunal
Service Tax - Finance Act 1994 Service Tax and and Cess thereon 58.50 Various periods from 2009 - 2016 Appellate Authority - Tribunal
4.14 Various periods from 2007 - 2016 Appellate Authority- upto Commissioner Level

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders as at thebalance sheet date.

ix. In our opinion and according to the information and explanations given to us themoneys raised by way of term loans have been applied for the purposes for which they wereobtained. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments).

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The Company has paid / provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting Standard (Ind AS) 24 Related Party Disclosures specified under Section 133 ofthe Act.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

.