To the Members of CELEBRITY FASHIONS LIMITED Report on the Audit of the StandaloneFinancial Statements
We have audited the accompanying standalone financial statements ofCELEBRITYFASHIONS LIMITED ("the Company") which comprise the Balance Sheet as atMarch 31 2020 the Statement of Profit and Loss (including Other Comprehensive Income)
Statement of Changes in Equity and the Statement of Cash Flows for the year ended onthat date and notes to the financial statements including a summary of significantaccounting policies and other explanatory information In our opinion and to the best ofour information and according to the explanations given to us the aforesaid Standalonefinancial statements give the information required by the Companies Act 2013 ("theAct") in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in at SDF - IV & C 2 Third India includingIndian Accounting Standards (Ind AS') specified under Section 133 of the Act of thestate of affairs of the Company as at March 31 2020 and its profit total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under those
. Standards are further described in the Auditor's Responsibilities for the Audit ofthe
Standalone Financial Statements section of our report. We are independent of the
Company in accordance with the Code of Ethics issued by the Institute of Chartered
Accountants of India together with the ethical requirements that are relevant to ouraudit of the Standalone Financial Statements under the provisions of the Companies Act2013 and the Rules there under and we have fulfilled our other ethical responsibilitiesin accordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Emphasis of Matter
We draw attention to Note No. 41 to the financial statements which describes theuncertainties and the impact of the Covid-19 pandemic on the Company's operations andresults as assessed by management. The actual results may differ from such estimatesdepending on future developments.
Our opinion is not modified in respect of this matter
Material Uncertainty Related to Going Concern
The Company has significant accumulated losses as at the date of the Balance Sheet.These events or conditions along with other matters indicate that a material uncertaintyexists that may cast significant as a going concern. We have evaluated the appropriatenessof the going concern' concept in accordance with SA-570 based on such evaluationin our opinion and on the basis of the information and explanations given to us we reportthat we have obtained sufficient evidence to establish the continuance of the Company as agoing concern. The financial statements of the Company have been prepared on a goingconcern basis. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These mattersis neither an assurance were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
a) Revenue recognition (Ind AS 115)
The application of the new standard on recognition of revenue involves significantjudgment and estimates made by the management which includes identification of performanceobligations contained in contracts determination of the most appropriate method forrecognition of revenue relating to the identified performance obligations assessment oftransaction price and allocation of the assessed price to the individual performanceobligations.
Audit procedure involved review of the Company's Ind AS 115 implementation process andkey judgments made by management evaluation of customer contracts in light of Ind AS 115on sample basis and comparison of the same with management's evaluation and assessment ofdesign and operating effectiveness of internal controls relating to revenue recognition.
Based on the procedures performed it is concluded that management's judgments withrespect to recognition and measurement of revenue in light of IND AS 115 is appropriate.
Furthermore the appropriateness of the disclosures made in Note 26 & 1.5 to thefinancial statements was assessed.
b) Existence and impairment of Trade Receivables
Trade Receivables are significant Collectability of trade receivables is a key elementof the Company's working capital management which is managed on an ongoing basis by itsmanagement. Due to the nature of the Business and the requirements of customers variouscontract terms are in place which impacts the timing of revenue recognition. Given themagnitude and judgment involved in the impairment assessment of trade receivables we haveidentified this as a key audit matter.
We performed audit procedures on existence of trade receivables which includedsubstantive testing of revenue transactions obtaining trade receivable externalconfirmations and testing the subsequent payments received. Assessing the impact of tradereceivables requires judgement and we evaluated management's assumptions in determiningthe provision for impairment of trade receivables by analyzing the ageing of receivablesassessing significant receivables and specific local risks combined with the legaldocumentations where applicable.
In calculating the Expected Credit Loss as per Ind AS 109 "FinancialInstruments" the Company has also considered the estimation of probable futurecustomer default and has taken into account an estimation of possible effect from thepandemic relating to Covid-19.
We tested the timing of revenue and trade receivables recognition based on the termsagreed with the customers. We also reviewed on a sample basis terms of the contract withthe customers invoices raised etc. as a part of our audit procedures.
Furthermore we assessed the appropriateness of the disclosures made in Note
1.17 to the financial statements.
c) Assessment of Provisions for taxation litigations and claims:
As at March 31 2020 Celebrity Fashions Limited had a provision in respect of possibleor actual taxation disputeslitigation and claims to the tune of Rs. 2903868. Theseprovisions are estimated using a significant management judgment in interpreting thevarious relevant rules regulations and practices and in considering precedents in variousforums
The Audit addressed this Key Audit Matter by assessing the adequacy of tax Provisionsby reviewing correspondence with tax Authorities Discussing significant litigations andclaims with the
Obtaining Letters from Celebrity Fashions External Advisors including their viewsregarding the likely outcome and magnitude of and exposure to the relevant litigation andclaims
Reviewing previous judgments made by relevant tax Authorities and opinions given byCompany's advisors. Assessing the reliability of the past estimates of the management.Based on the procedures performed it is concluded that the management's assessment of theoutcome of pending litigations and claims is appropriate.
Furthermore the appropriateness of the disclosures made in note 46 to the financialstatements was assessed.
d) Recognition and measurement of deferred taxes
The recognition and measurement of deferred tax items requires determination ofdifferences between the recognition and the measurement of income and expenses inaccordance with the Income Tax Act and other applicable tax laws including application ofICDS and financial reporting in accordance with
This involves significant calculations tax laws.
The key matter was addressed by performing audit procedures which involved assessmentof underlying process and evaluation of internal financial controls with respect tomeasurement of deferred tax and re-performance of calculations and assessment of the itemsleading to recognition of deferred tax in light of prevailing tax laws and applicablefinancial reporting standards on sample basis. The audit procedures performed did not leadto identification of any material misstatement with respect to recognition and measurementof deferred taxes. Furthermore the appropriateness of the disclosures made in note 1.8.2to the financial statements was assessed.
e) Accuracy on valuation of Inventory to the Company's financial statements. TheManagement judgment is required to establish the carrying value of inventory particularlyin relation to determining the appropriate level of provisions in relation to obsolete andSurplus items.
The judgment reflects that inventory is held to support Company's operations whichresults in the Company holding inventory for extended periods before utilization. In casesof disputes with land owners we have relied on Management Representation.
Physical Verification of Inventory to lock down accordingly necessary Alterative AuditProcedures have been conducted to conclude thatoverdueindividualtrade inventory is free ofmaterial misstatements. With respect to the Net Realizable value of Inventory the Companyhas provided Management Representations that there is no significant Covid as allcontracts are based on fixed prices.
Audit procedures include testing the inventory provisions we assessed the managementcontrol and estimation of inventory provisions and their appropriateness. Futuresalability of inventory was assessed based on past track records.
Based on the audit procedure performed no material discrepancies were identified.
f) Adoption of IND AS 116 Leases
As described in Note 5 to the financial statements the Company has adopted Ind AS 116- Leases (Ind AS 116) in the current year. The application and transition to thisaccounting standard is complex and is an area of focus in our audit. Ind AS 116 introducesa new lease accounting model wherein lessees are required to recognize a right-of-use(ROU) asset and a lease liability arising from a lease on the balance sheet. The leaseliabilities are initially measured by discounting degree of future lease payments duringthe lease term as per the contract/ arrangement.
Adoption of the standard involves significant determination of the discount rates andthe lease term. Additionally the standard mandates detailed disclosures in respect oftransition. Refer Note No. 5 & 23 of financial statements.
Our audit procedures on adoption of Ind AS 116 include:
Assessed and tested new processes and controls in respect of the lease accountingstandard (Ind AS 116).
Assessed the Company's evaluation on the identification of leases based on thecontractual agreements and our knowledge of the business;
Evaluated the reasonableness of the discount rates applied in determining the leaseliabilities.
Upon transition as at 1 April 2019:
Evaluated the method of transition and related adjustments;
Tested completeness of the lease data by reconciling the Company's operating leasecommitments to data used in computing ROU asset and the lease liabilities. On astatistical sample we performed the following procedures: liabilities assessed the keyterms and conditions of each lease with the underlying lease contracts; and
evaluated computation of lease liabilities and challenged the key estimates suchas discount rates and the lease term.
Assessed and tested the presentation and disclosures relating to Ind AS 116 includingdisclosures
Information Other than the Standalone Financial Statements and Auditors' Report Thereon
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sAnnual Report but does not include the financial statements and our report thereon. Ouropinion on the Standalone Financial Statements does not cover the other information and wedo not express any form of assurance conclusion thereon. In connection with our audit ofthe financial statements our responsibility is to read the other information and indoing so consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
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 havenothing to report in this regard.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone financial statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance withthe accounting principles generally accepted in
India including the accounting Standards specified under section 133 of the Act readwith the rule 3 of the companies (Indian Accounting Standards) Rules 2015 and companies(Indian Accounting Standards Amendment Rules 2016). This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate implementation andmaintenance of accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative 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 influence the economic decisions of userstaken on the basis of these Standalone financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3) (i) ofthe Companies Act 2013 we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the Standalone financialstatements. We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
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 financial statements of for thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 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 Companies Act 2013 we give in the Annexure A' a statement on the mattersspecified in paragraphs 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 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 ComprehensiveIncome Statement of changes in the equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account
(d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Indian Accounting Standards) Rules 2015 and Companies (Indian AccountingStandards) Amendment Rules2016
(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) oftheAct.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
(g) With respect to the matter to be included in the Auditors' Report under section197(16) of the Act as amended: In our opinion and to the best of our information andaccording to the explanations given to us the remuneration paid by the Company to itsdirectors during the year is in accordance with the provisions of section 197 of the Act.
(h) 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. TheCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statementsas referred to in Note No. 46 to the Standalone Financial Statements;ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts iii. There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company.
For SRSV & Associates Chartered Accountants
V. Rajeswaran Partner
Membership No. 020881 UDIN NO. : 20020881AAAADX1824
Date : 25th June 2020 Place: Chennai
Annexure A to the Independent Auditor's Report
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Celebrity Fashions Limited of evendate)
i. In respect of its Fixed assets:
(a) The Company has maintained proper records showing full particulars Tax includingquantitativedetailsandsituationoffixed . assets
(b) The Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on suchverification.
(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds / registered sale deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freeholdare held in the name of the Company as at the balance sheetdate. In respect of immovable properties of land and building that have been taken onlease and disclosed as fixed assets in the financial statements the lease agreements arein the name of the Company. ii. Physical verification of inventory has been conducted atreasonable intervals by the management and no material discrepancies were noticed on suchverification. However as on 31st March 2020 the physical verification was not conductedowing to Covid 19 lock down the Company has employed necessary cut off procedures in thisregard. Accordingly necessary alternative Audit Procedures have been conducted toconclude that inventory is free of material misstatement.
iii. In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act. (Based on the above para matters referred in clause iii(a)iii(b) and iii(c) of paragraph 3 of Companies (Auditors Report) Order 2016 are notapplicable).
iv. In our opinion and according to the explanations given to us there are no loansinvestments guarantees and securities provided by the Company as specified under Sections185 and 186 of the Companies Act 2013. Therefore the provisions of the paragraph 3(iv)of the order are not applicable to the Company.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of Sections 73 to76 or any other relevant provisions of the Act and rules framed thereunder.
vi. To the best of our knowledge and as explained to us the Central Government has notprescribed the maintenance of cost records under Section 148(1) of the Companies Act 2013for any of the products / services manufactured /rendered by the Company.
vii. Undisputed and disputed taxes and duties a) According to the records of theCompany and information and explanations given to us the Company is regular in depositingundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax wealth tax service tax duty of customs duty of excise valueadded tax Goods and service tax cess and any other statutory dues with the appropriateauthorities. There are no undisputed statutory dues outstanding for more than six months.
b) As at March 31 2020 according to the records of the Company the following are theparticulars of the disputed dues on account of sales tax income tax customs duty wealthtax service tax and cess which have not been deposited on account of dispute:
|Name of the Statue ||Nature of Dues ||Assessment Year to which the amount relates ||Forum where the dispute is pending ||Amount (in Rs) |
|Income Tax Act 1961 ||Income Tax ||2003-04 ||Pending before the Assessing Officer ||526669* |
|Income Tax Act 1961 ||Income Tax ||2004-05 ||Pending before the Assessing Officer ||961087* |
|Income Tax Act 1961 ||Fringe Benefit Tax ||2007-08 ||Pending for rectification before the Assessing ||699860 |
|Income Tax Act 1961 ||Fringe Benefit ||2008-09 ||Officer Pending for rectification before the Assessing ||601600 |
| || || ||Officer Pending for rectification before the Assessing || |
|Income Tax Act 1961 ||Income Tax ||2011-12 ||Officer and appeal before the Commissioner of Income Tax Appeals Chennai ||114652 |
|Total || || || ||2903868 |
* Relating to Income Tax dues of Partnership Firm Celebrity Connections
viii. Based on our audit procedures and according to the information and explanationsgiven to us by the management we are of the opinion that the Company has not defaulted inrepayment of loans or borrowings to a financial institution bank Government or debentureholders.
ix. To the best of our knowledge and according to the information and explanationsgiven to us the Company has not raised any money by way of initial public offer orfurther public offer (including debt instruments). In our opinion and according to theinformation and explanations given to us the Company has utilized the monies raised byway of term loans for the purpose for which they were raised.
x. In our opinion and according to the information and explanations given to us nofraud on or by the Company by its officers or employees has been noticed or reportedduring the financial year.
xi. In our opinion and according to the information and explanations given to usmanagerial remuneration has been provided in accordance with the requisite approvalsmandated by Section 197 read with Schedule V of the Companies Act 2013.
xii. In our opinion the Company is not a Nidhi Company. Accordingly clause xii ofPara 3 of Companies (Auditors Report) Order 2016 is not applicable.
xiii. In our opinion and according to the information and explanation given to us alltransactions with the related parties are in compliance with sections 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the FinancialStatements as required by the applicable accounting standards.
xiv. According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year. Accordingly clause xiv of Para 3 of Companies(Auditors Report) Order 2016 is not applicable.
xv. In our opinion and according to the information and explanations given to us theCompany has not entered into any non - cash transactions with directors or personsconnected with the Directors. Accordingly clause
xv of Para 3 of Companies (Auditors Report) Order 2016 is not applicable.
xvi. In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-lA of the Reserve Bank of IndiaAct 1934. Accordingly clause xvi of Para 3 of Companies (Auditors Report) Order 2016 isnot applicable.
For SRSV & Associates Chartered Accountants
V. Rajeswaran Partner
Membership No. 020881 UDIN NO. : 20020881AAAADX1824
Date : 25th June 2020 Place: Chennai
Annexure B to the Independent Auditor's Report
(Referred to in paragraph 2 (f) under Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Celebrity Fashions Limited of evendate)
Report on the Internal Financial Controls over Financial Reporting under Clause(i) OfSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting ofCELEBRITYFASHIONS LIMITED ("the Company") as of March 31 2020 in conjunction withour audit of the Standalone Financial Statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. 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 respective Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. 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 over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness existsand testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is provide a basis for our auditopinion on the internal financial controls system over financial reporting of the Company.
Meaning of Internal Financial Controls Over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting 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 authorizations of management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinionto the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at over financial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal
Financial Controls Over Financial Reporting issued by the Institute of Chartered
For SRSV & Associates Chartered Accountants
F.R. No. 015041S
V. Rajeswaran Partner
Membership No. 020881 UDIN NO. : 20020881AAAADX1824
Date : 25th June 2020 Place: Chennai