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Bajaj Hindusthan Sugar Ltd.

BSE: 500032 Sector: Agri and agri inputs
NSE: BAJAJHIND ISIN Code: INE306A01021
BSE 00:00 | 24 Jun 13.37 0.73
(5.78%)
OPEN

12.84

HIGH

13.46

LOW

12.75

NSE 00:00 | 24 Jun 13.35 0.70
(5.53%)
OPEN

12.90

HIGH

13.45

LOW

12.75

OPEN 12.84
PREVIOUS CLOSE 12.64
VOLUME 632500
52-Week high 24.75
52-Week low 11.31
P/E
Mkt Cap.(Rs cr) 1,708
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 12.84
CLOSE 12.64
VOLUME 632500
52-Week high 24.75
52-Week low 11.31
P/E
Mkt Cap.(Rs cr) 1,708
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bajaj Hindusthan Sugar Ltd. (BAJAJHIND) - Auditors Report

Company auditors report

To the Members of

Bajaj Hindusthan Sugar Limited

Report on the Audit of the Standalone Financial Statements Qualified Opinion

We have audited the standalone financial statements of Bajaj Hindusthan Sugar Limited("the Company") which comprise the standalone balance sheet as at March 312021 and the standalone statement of Profit and loss (including other comprehensiveincome) the standalone statement of changes in equity and standalone statement of cashflows for the year then ended and notes to the standalone financial statements includinga summary of significant accounting policies and other explanatory information(Collectively referred to as ‘standalone financial statements').

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion section of our report the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 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 (_nancial position) of the Company as at March 31 2021and its loss (_nancial performance including other comprehensive income) changes inequity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We draw attention to Note No. 35(I)(e) to the standalone financial statementsregarding the non-provision of contractual obligation related to premium payable onOptionally Convertible Debentures (OCDs) at the time of redemption of OCDs issued tolenders pursuant to the Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme)which stipulates that the yield to maturity (YTM) being the difference between weightedaverage interest and coupon rate payable as redemption premium at the time of redemptionof OCDs redeemable in 13 equal instalments commencing from the Financial year 2024-25. TheCompany considers such YTM/redemption premium as contingent liability and has not providedfor the same in the books of account for the year ended March 31 2021 amounting to Rs461.10 crore. The aggregate liability for such YTM from the date of allotment of OCDs tillyear ended March 31 2021 is Rs 1390.12 crore from date of allotment of OCDs. Had suchinterest been provided the reported net loss for the year ended March 2021 would havebeen Rs 740.70 crore and Net worth of the Company would have been Rs 1550.79 crore.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of the Companyin accordance 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 financial statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our qualified opinion on thestandalone financial statements.

Material Uncertainty related to Going Concern

As stated in Note No. 48 of the standalone financial statements the Company during thelast few years has incurred losses due to high raw material cost and lower price offinished goods resulting into reduction of net worth of the Company. The Company has duespayable to farmers for sugar cane purchases at year end. The Company is continuouslystriving for improvement in the operational efficiency in other parameters. The abovefactors indicate a material uncertainty which may cast significant doubt about theCompany's ability to continue as a going concern. The Company continues to operate atoptimum levels and expects improvement in the operational efficiency in the form ofimprovement in sugar recovery reduction of overheads finance and other costsmonetisation of certain non-core assets etc. The debt restructuring as per RBI's S4AScheme would result into improved liquidity during the next 7 years and the Governmenthas taken different measures to improve the financial health of sugar industry. All thesemeasures are expected to turnaround the operations of sugar industry on sustainable basis.The Company also expects to receive accrued Benefits under the Sugar Industries PromotionPolicy 2004 for which it is entitled to. In view of the above the management expects togenerate positive cash flow from operation and accordingly the financial statements arecontinued to be presented on going concern basis which contemplates realisation of assetsand settlement of liabilities in the normal course of business.

Our opinion is not Modified in respect of the above matter.

Emphasis of Matter

a) As stated in Note No. 44 to the standalone financial statements the Company hasexposure aggregating to Rs 1683.35 crore in its three wholly-owned subsidiaries and Rs598.04 crore in other companies aggregating to Rs 2281.39 crore by way of investmentsloans accumulated interest on these loans and receivables. Management is of the viewthat sufficient efforts are being undertaken to revive the said subsidiaries in theforeseeable future so as to recover carrying value of the investments loans receivablesand the diminution/provisions if any exists is only of temporary nature. Furthermanagement believes that the investments made loans given and receivable due from othercompanies are also considered good and recoverable / realizable based on the futurebusiness plan of these companies and on-going efforts towards obligation casted on theCompany and its promoters to recover the outstanding loans in phased manner andaccordingly no provision other than those already accounted for has been considerednecessary.

b) We draw your attention to Note No. 47 to the standalone financial statements whichexplain the uncertainties and the management's assessment of the financial impact due tothe lockdowns and other restrictions and conditions related to COVID-19 pandemicsituation for which a definitive assessment of the impact in the subsequent period ishighly dependent upon the circumstances as they evolve.

Our opinion is not Modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

We have determined the matter described below to be key audit matters to becommunicated in our report.

The Key Audit Matters How the matter was addressed in our audit
Impairment assessment for Investments loans and interest on loan and receivables
The Company has exposure aggregating to Rs 1683.35 crore in its three wholly-owned subsidiaries and Rs 598.04 crore in other companies aggregating to Rs 2281.39 crore by way of investments loans accumulated interest on these loans and receivables. We focussed on this area due to magnitude of the carrying value of investments loans accumulated interest on loan and receivables related to subsidiary companies other companies related to group and other companies which comprise 16.68% of the total assets as at March 31 2021 and are subject to annual impairment assessment.
Such investments / loans / receivables individually assessed for impairment as per Ind AS 36 - Impairment of Assets. Our audit procedures in respect of testing impairment assessment in case of investments loans given interest accrued on loans and receivables included the following:
- Obtained understanding of the process evaluated the effectiveness of controls in respect of impairment assessment of investments.
- Held discussions with management regarding appropriate implementation of policy on impairment.
Evaluated the future business plan and available valuation report.
- Confirmations for above exposure.
- Validated the S4A Restructuring Scheme clause related to obligation on the Company to recover the loan amount.
- We evaluated the impairment assessment performed by management taking into account the requirements of Ind AS 36 Impairment of Assets
Physical Verification of inventory
Physical verification of closing inventory done by the management as on March 31 2021 was not attended by us and subsequent to the year-end we have done alternative procedures due to the restrictions imposed on account of COVID-19. We have carried out following procedures with respect to the existence of Inventory at the yearend:
- Evaluated the design and implementation of the controls over physical verification of inventory and tested the operating effectiveness of these controls during the interim periods.
- Obtained reports of the internal auditor of the Company for inventory verification process.
- Verified the instructions provided by the management to those independent firms. Evaluated the differences identified by these internal auditor during their physical verification of inventories and it was noted that there were no major deviations found.
- Verified the memorandum register related to stock maintained by the stock departments and signed by the person in charge as on the date of the verification.

Other Information

The Company's management and Board of Directors is responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance (including other comprehensive income) changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (‘Ind AS')specified 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 financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error. Inpreparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to in_uence the economic decisions of userstaken on the basis of these financial statements.

As part of an audit in accordance with Standards on Auditing (‘SAs') we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial 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 financial statements in place andthe 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 financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest Benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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

a. We have sought and except for the matter described in Basis for Qualified Opinionsection obtained all the information and explanations which to the best of our knowledgeand belief were necessary for the purposes of our audit.

b. Except for the possible effects of the matter described in the Basis of Qualifiedopinion paragraph above in our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

c. The Standalone Balance Sheet the Standalone Statement of Profit and Loss (includingother comprehensive income) the Standalone Statement of Changes in Equity and theStandalone Cash Flow Statement dealt with by this Report are in agreement with the booksof account.

d. In our opinion except for the matter described in Basis for Qualified Opinionsection the aforesaid standalone financial statements comply with the Indian AccountingStandards prescribed under Section 133 of the Act read with Companies (Indian AccountingStandard) Rules 2016.

e. The matters described in ‘Basis for Qualified Opinion' paragraph and the Goingconcern matter described under Material Uncertainty related to Going Concern paragraphabove in our opinion may have an adverse effect on the functioning of the Company.

f. On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct.

g. The reservation relating to maintenance of accounts and other matters connectedtherewith are as stated in the Basis for Qualified opinion paragraph. h. With respect tothe adequacy of the internal financial controls with reference to financial statements ofthe Company and the operating effectiveness of such controls refer to our separate Reportin "Annexure B".

i. With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act: In our opinion and according to the information and explanations givento us the Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by provisions of section 197 read with Schedule V to the Act.The Ministry of Corporate Affairs has not prescribed other details under section 197(16)of the Act which are required to be commented upon by us.

j. 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 financial statements – Refer note 35 to the standalone financialstatements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any 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.

For R S Dani & Co
Chartered Accountants
Firm Registration No. 000243C
C P Kothari
Partner
Membership No. 072229
Ajmer
Dated: June 08 2021

Annexure ‘A'

Annexure referred to in paragraph 1 under the heading "Report on other legal andregulatory requirements" of our report of even date

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) As explained to us the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.

(c) According to the information and explanations given to us the immovable propertiesof the Company have been mortgaged with the lenders and the original title deeds aredeposited with the lender's trustee. Based on the confirmation given by the trustee andverification of the copies of the title deeds / lease deeds in respect of immovableproperties of free hold land buildings and immovable properties of land that have beentaken on lease and disclosed as fixed assets in the financial statement are held in theCompany's name or in the Company's erstwhile name or in the name of companies amalgamatedwith the Company in past.

(ii) The Inventories of finished goods stores spare part and raw materials have beenphysically verified by the management. In our opinion the frequency of verification isreasonable. On the basis of our examination of the records of inventory we are of theopinion that the discrepancies noticed on verification between the physical stocks andbook records were not material and have been properly dealt with in the books of accounts.

(iii) The According to the information and explanations given to us the Company hasnot granted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us theCompany has not advanced loans to directors / to a company in which the Director isinterested to which provisions of section 185 of the Act apply and hence not commentedupon. In our opinion and according to the information and explanations given to usprovisions of section 186 of the Act in respect of loans and advances given investmentsmade and guarantees and securities given have been complied with by the Company to theextent applicable to it.

(v) According to the information and explanations given to us the company has notaccepted any deposit from the public within the meaning of section 73 to 76 of the Act andthe rules framed thereunder. Therefore the provision of clause 3(v) of the Order is notapplicable to the Company.

(vi) To the best of our knowledge and as explained the Company has maintained the costrecords specified under Companies (Cost Records and Audit) Rules 2014 issued under subsection (1) of Section 148 of the Act in respect of Company's products to which saidrules are made applicable and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. We have however not made a detailedexamination of the records with a view to determine whether they are accurate.

(vii) (a) According to records of the Company the Company has been generally regularin depositing with appropriate authorities undisputed statutory dues including ProvidentFund Employees' State Insurance Income-tax Sales-tax Service-tax Goods and Servicetax Custom Duty Excise Duty Value Added tax Cess and other statutory dues to theextent applicable to it.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-tax Service taxGoods and Service tax Sales-tax Customs Duty Excise Duty Value Added tax Cess andother material statutory dues were outstanding at the year end for a period of more thansix months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofincome tax sales-tax service tax Goods and Service tax customs duty excise duty andvalue added tax which have not been deposited with the appropriate authorities on accountof any dispute except as shown below:

( Rs in crore)
Name of the Act Nature of dues Amount under disput Period to which the amount relates (Financial year) Forum where dispute is pending
Central Sales Tax Act 1956 and Sales Tax Act /VAT Act of various states & GST Act Sales Tax VAT and Entry Tax GST 1.38 Various year from 2011-12 to 2019-20 Commissioner of Sales Tax/VAT
47.21 Various year from 1982-83 to 2013-14 Sales Tax Appellate Tribunal
3.36 Various year from 1990-91 to 2010-11 High Court
Central Excise Act 1944 Appellate Tribunal Excise and Service Tax 0.01 Various year from 2009-10 to 2017-18 Commissioner of Central Excise (Appeals)
0.07 1981-82 Central Excise and Service Tax
5.59 Various year from 2004-05 to 2005-06 Supreme Court

(viii) In our opinion and according to the information and explanations given to usthe Company has delayed in repayment of dues to financial institutions and banks duringthe year related to principal loans amount and interest on loans and to debenture holdersfor interest on debenture. The lender-wise details of the delays made by the Company as onMarch 31 2021 is tabulated as under: -

Name of Bank / Institution No. of Days (Range) Principal Amount (Rs in crore) (Range)
Min Max Min Max
Bank of Baroda 4 54 0.04 1.73
Bank of India 5 54 0.02 1.73
Bank of Maharashtra 5 59 0.00 4.35
Canara Bank 5 55 0.02 4.35
Central Bank of India 3 50 0.01 3.00
IDBI Ltd 5 42 0.00 4.45
Indian Bank (er- Allahabad Bank) 5 57 0.27 4.69
Indian Overseas Bank 5 41 0.06 2.62
Punjab National Bank 5 40 0.08 3.28
Punjab National Bank (er- OBC) 5 51 0.20 3.81
State Bank of India 1 30 0.01 4.03
UCO Bank 12 49 0.50 3.90
Union Bank (er-Corporation Bank) 5 50 0.10 2.24
Bank of Baroda 1 23 0.01 0.50
Bank of India 1 23 0.00 0.27
Bank of Maharashtra 1 28 0.03 1.35
Canara Bank 1 23 0.00 1.00
Central Bank of India 1 28 0.01 0.93
IDBI Ltd 1 26 0.01 1.32
Indian Bank (er- Allahabad Bank) 1 26 0.00 1.31
Indian Overseas Bank 1 23 0.01 0.42
Punjab National Bank 1 27 0.05 2.08
Punjab National Bank (er- OBC) 1 31 0.02 0.61
State Bank of India 1 3 0.01 4.35
UCO Bank 1 31 0.00 0.64
Union Bank (er-Corporation Bank) 4 26 0.01 0.36

(ix) The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments) or term Loan during the year and hence clause (ix) ofparagraph 3 of the Order is not applicable to the Company.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud on or by the officers and employees ofthe Company has been noticed or reported during the year.

(xi) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that the managerial remuneration has been paid /provided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Act.

(xii) In our opinion the Company is not a chit fund or a nidhi / mutual Benefit fund /society. Therefore the provisions of clause 3(xii) of the Order are not applicable to theCompany and hence not commented upon.

(xiii) Based on our audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and according to the information andexplanations given by the management transactions with the related parties are incompliance with section 177 and 188 of Act where applicable and the details have beendisclosed in the notes to the standalone financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence not commented upon.

(xv) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withdirectors or persons connected with him.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For R S Dani & Co
Chartered Accountants
Firm Registration No. 000243C
C P Kothari
Partner
Membership No. 072229
Ajmer
Dated: June 08 2021

Annexure ‘B'

Annexure to the independent auditor's report of even date on the Standalone FinancialStatements of Bajaj Hindusthan Sugar Limited Report on the Internal Financial Controlsunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct") Qualified Opinion

We have audited the internal financial controls with reference to financial statementsof Bajaj Hindusthan Sugar Limited ("the Company") as of March 31 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

According to the information and explanations given to us and based on our audit thefollowing material weakness has been identified as at March 31 2021: The Company has notprovided the premium payable on Optionally Convertible Debentures (OCDs) at the time ofredemption of OCDs as a contractual obligation.

A ‘material weakness' is a deficiency or a combination of deficiencies ininternal financial control with reference to financial statements such that there is areasonable possibility that a material misstatement of the Company's annual or interimfinancial statements will not be prevented or detected on a timely basis.

We have considered material weakness identified and reported above in determining thenature timing and extent of audit tests applied in our audit for the year ended March31 2021 and these material weaknesses affect our opinion on financial statements of theCompany for the year ended March 31 2021.

In our opinion except for the effects / possible effects of the material weaknessdescribed above under Qualified Opinion paragraph on the achievement of the objectives ofthe control criteria the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls were operating effectively as on March 31 2021 based on the internalfinancial control with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India ("the Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and Board of Directors are responsible for establishing andmaintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors' Responsibility

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 and the Standards on Auditing issued by ICAI anddeemed to be prescribed under Section 143(10) of the Act to the extent applicable to anaudit of internal financial controls with reference to financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements was established and maintainedand whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's Judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial control 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 control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements

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 control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

For R S Dani & Co
Chartered Accountants
Firm Registration No. 000243C
C P Kothari
Partner
Membership No. 072229
Ajmer
Dated: June 08 2021

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