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Choksi Laboratories Ltd.

BSE: 526546 Sector: Others
NSE: N.A. ISIN Code: INE493D01013
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NSE 05:30 | 01 Jan Choksi Laboratories Ltd
OPEN 11.72
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VOLUME 300
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Buy Price 11.73
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Sell Price 12.80
Sell Qty 500.00
OPEN 11.72
CLOSE 12.30
VOLUME 300
52-Week high 16.00
52-Week low 7.00
P/E
Mkt Cap.(Rs cr) 8
Buy Price 11.73
Buy Qty 100.00
Sell Price 12.80
Sell Qty 500.00

Choksi Laboratories Ltd. (CHOKSILABORATOR) - Auditors Report

Company auditors report

To the Members of

Choksi Laboratories Limited

Report on the Audit of the financial statements

Opinion

1. We have audited the accompanying financial statements of Choksi Laboratories Limited(“the Company”) which comprise the Balance Sheet as at 31 March 2020 theStatement of Profit and Loss (including other comprehensive income) the statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as “the financial statements”).

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 (“the Act”) in the manner so required and give a true andfair view in conformity with the Indian accounting standards prescribed under section 133of principles generally accepted in India of the state of affairs of the Company as at 31March 2020 and loss (including other comprehensive income) changes in equity and itscash flows for the year ended on that date.

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 Auditor's Responsibilities for the Audit of the financial statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India ("ICAI")together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the ICAI'sCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion on the financial statements.

Emphasis of Matter

4. We draw attention to Note 42 of the financial statements which describes thatbalance Confirmation from the suppliers customers as well as to various loans or advancesgiven have been called for but the same are awaited till the date of Audit. Thus thebalances of receivable Trade Payable as well as Loan & Advances have been taken asper Books of Accounts submitted by the Company and are subject to confirmation from therespective parties. 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 financial statements for the financial year ended 31stMarch 2020. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion on these matters and we do not providea separate opinion on these matters.

6. We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditors' responsibilities for the audit of the financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the financial statements. The results of our audit procedures includingthe procedures performed to address the matters below provide the basis for our auditopinion on the accompanying financial statements

The key audit matters How our audit addressed the key audit matter
A) Information Technology (IT) System & Control Impacting Financial Reporting
The IT Environment of the Company is complex & involves a large number of Independent & Inter Dependent IT System used in the operation of the Company for processing and recording a long volume of Transaction at numerous location. As a result there is a high degree of reliance & dependency on such IT System for the Financial Reporting Process of the Company. Appropriate IT General control and application are requested to ensure that such IT System are able to process the data as required completely accurately and consistently for reliable Financial Reporting. The accuracy & reliability of the Financial Reporting Process depends on the IT System and the related control environment including In assessing the integrity of the IT System we involved our IT Expert to obtain an understanding of the IT Infrastructure & IT System relevant to the Company's Financial Reporting Process of evaluation and testing of IT general control and IT Automated Control exist in such IT System. We also assessed the operating effectiveness of control over removal and periodical review of access right. We further tested segregation of duties including preventive control to ensure that access to change application on the operating system or database in the Production Environment were granted only to the authorized persons. We also evaluated the design and tested the operating effectiveness of key automated control within various business processes. This included testing the irregularity of the system interfaces the completeness and accuracy of data feeded and automated calculation.
i IT general control over use access management and change management accrued application network database and operating system.
i IT Automated application control.
i Due to the importance of the impact of the IT System and related control environment on the Company's Financial Reporting Process we have identified testing of such IT System and related control environment as a key Audit Matter for the Current Year Audit.
b) Allowances for credit losses
The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. Our audit procedures related to the allowance for credit losses for trade receivables included the following among others:
The Company considered current and anticipated future economic conditions and has taken into account estimates of possible effect from the pandemic relating to COVID - 19. We identified allowance for credit losses as a key audit matter because the Company exercises significant judgment in calculating the expected credit losses We tested the effectiveness of controls over the
(1) development of the methodology for the allowance for credit losses including consideration of the current and estimated future economic conditions
(2) completeness and accuracy of information used in the estimation of probability of default and
(3) Computation of the allowance for credit losses.
We tested the mathematical accuracy and Computation of the allowances by using the same input data used by the Company. As a practical expedient the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.
c) Provisions & Contingent Liabilities.
As at 31st March 2020 the Company has Guarantees issued by the Bank on behalf of the company. Our Audit Procedure tested the design and operating effectiveness key control over the estimation monitoring and disclosure of Provisions and contingent liabilities. Bank has issued guarantee of amount Rs. 19.50 lacs on behalf of company.
In accordance with Accounting Criteria set under Indian Accounting Standard 37 - Provision Contingent Liabilities and Contingent Assets significant degree of Management Judgment is involved in determining whether an obligation exists and whether a provision should be recognized as at the reporting date or it needs to be disclosed as Contingent liability.
Further Significant Judgments are also involved in measuring such obligations the most significant of which are assessment of liability. Judgment is involved in the determination of whether any outflow in respect of identified material matters are probable and can be estimated reliably.
Adequacy of Provision appropriateness of assumption and judgment used in the estimation of significant provision adequacy of disclosure of provision for liabilities and Contingent Liabilities considering the significance of the above matter to the Financial Statement and significant Auditor's attention required to test such estimate we have identified this as a key Audit matter for Current Year Audit.
d) Ind AS 16 Property Plant and Equipment & Ind AS 36 Impairment of assets
(See Note -I Point A) of the significant accounting policies to the financial statements.
The carrying amount of PPE represents 47.68% of the total assets of the company. The values in use of these PPE have been determined based on certain assumptions and estimates of future performance. In view of the significance of the matter our procedures in this area included the following :
The value in use so determined of each Cash Generating Unit (CGU) identified by the management has been used for the impairment evaluation of the PPE. Due to the significance of the value of the PPE the inherent uncertainty and judgment involved in forecasting performance and the estimates involved in discounting future cash flows we have considered these estimates to be significant to our overall audit strategy and planning. • Testing the design implementation and operating effectiveness of key controls over the impairment review process including the review and approval of forecasts and review of valuation models;
• Assessing the valuation methodology used by management and testing the mechanical accuracy of the impairment models;
• Evaluating the reasonableness of the valuation assumptions such as discount rates used by management through reference to external market data;
• Challenging the appropriateness of the business assumptions used by management such as sales growth and the probability of success ofnew products;
• Evaluating the past performances where relevant and assessing historical accuracy of the forecast produced by management;
• Enquiring with respect to and challenging the management on the commercial strategy associated with the products to ensure that it was consistent with the assumptions used in estimating future cash flows;
• Considering whether events or transactions that occurred after the balance sheet date but before the reporting date affect the conclusions reached on the carrying values of the assets and associated disclosures;
• Performing sensitivity analysis of key assumptions including future revenue growth rates costs and the discount rates applied in the valuation models;
• Evaluating the adequacy of the disclosures made in the financial statements.

Information other than the financial statements and Auditor's Report thereon

7. 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 auditors' reportthereon. Our opinion on the Financial Statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of financial statements our responsibility is to read theother information and in doing so consider whether the other information is materiallyinconsistent with the Financial Statements or our knowledge obtained in the audit orotherwise appears to be materially misstated. If based on the work we have performed weconclude that there is a material misstatement of this other information; we are requiredto report that fact. We have nothing to report in this regard.

Other matters

8. The drop in revenue is attributed due to multiple licenses / approvals that two ofthe units undergoing shift to new location are pending technical audit / approval /certification from competent authorities as well as self revocation of US FDA FEI numberas informed on 30th September 2019 to the Bombay Stock exchange Limited thereafter USFDAhas given us EIR on 25/11/2019 under VAI Category for same place to the company.

"The exceptional item represents the amount incurred of Rs. 243.07 Lacs (P.Y. -Rs. NIL) towards consultancy charges paid to consultant out of which Rs. 228.32 Lacs paidto US Consultant and Rs.14.74 lacs paid to Indian consultant because company was auditedby International Regulatory bodies ( US FDA) in Sep 2019 . Based on the observation as aprecautionary measure Company engaged consultants for submission of remediation plan tothe agencies which assisted in early resolution. The expense for the same has beenattributed to exceptional item"

Our opinion is not modified in respect of this matter.

Management's Responsibility for the financial statements

9. The Company's management and Board of Directors are responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these FinancialStatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act read with thecompanies (Indian Accounting Standards) rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the Financial Statements that give a true and fairview and are free from material misstatement whether due to fraud or error.

10. In preparing the 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 Board of Directors and management either intends to liquidatethe Company or to cease operations or has no realistic alternative but to do so. Board ofDirectors is also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the financial statements

11. Our objectives are to obtain reasonable assurance about whether the FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• 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 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 auditors'report. 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 financialstatements including the disclosures and whether the Financial Statements represent theunderlying transactions and events in a manner that achieves fair presentation.

13. 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

14. 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.

15. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the Financial Statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditors' report unless law or regulation precludes public disclosure about the matteror 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

16. The Balance Sheet and the Profit & Loss Account have been drawn up inaccordance with the provision of Section 133 of the Act read with rule 7 of the CompaniesRules 2014 (as amended).

17. As required by the Companies (Auditors' Report) Order 2016 (“the Order”)issued by the Central Government of India in terms of Section 143(11) of the Act we givein “Annexure A” a statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable.

18. With respect to the matter to be included in the Auditors' Report under section197(16) we report that In our opinion and according to the information and explanationgiven to us the remuneration paid by the Company to its directors during the current yearis in accordance with the provisions of Section 197 read with schedule V of the Act.

19. 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 and the Statement of Profit and Loss (including othercomprehensive income) statement of changes in equity and statement of cash flows dealtwith by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid Financial Statements comply with the Ind AS specifiedunder Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164(2) of the Act.

(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 B” to this report.

(g) With respect to the other matters to be included in the Auditors' 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 as at 31 March 2020 onits financial position in its 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- Refer Note- 17and 20 to the financial statements;

iii. There were no amounts which were required to be transferred to the investoreducation & protection fund by the company.

For SUBHASH CHAND JAIN ANURAG & ASSOCIATES
CHARTERED ACCOUNTANTS
FRN-004733C
(S.C. JAIN)
Date: 30th July 2020 PARTNER
Place: Indore M.NO. 072062
UDIN- 20072062AAAABO3089

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 15 under ‘Report on Other Legal and RegulatoryRequirements' section of our Report of even date)

1. In respect of its fixed assets:

• The Company is in the process of updating the fixed assets register for additionmade during the year. It has generally maintained records showing full particularsincluding quantitative details and situation of property plant and equipment. However thesame need to be fully reconciled pending updation of records.

• As explained to us all items of property plant and equipment have beenphysically verified by the management in a phased periodical manner which in our opinionis reasonable having regard to the size of the Company and nature of its assets. Furthercompany is in process of reconciling the same with the fixed assets register and we areinformed by the management that based on the reconciliation being performed discrepanciesif any are not likely to be material.

• According to the information and explanations given to us and the recordexamined by us and based on the examination of the conveyance deeds provided to us wereport that the title deeds comprising of the immovable properties of land and buildingwhich are free hold and lease hold are in the name of the company as at the balance sheetdated except the under noted properties whose title have not been still conveyed in thename of the company having total carrying value of Rs. 275.22 Lacs as at 31.03.2020.

Description of the property Status of ownership Carrying value Remark
1. Free Hold Land situated at 4/3 Manoramaganj Indore Title of the land in the name of director Shri Sunil Kumar Choksi S/o. Dhansukh bhai Choksi. 1000000/- But recorded in the books
2. Premises located at 4/3 Manoramaganj Indore Title of the premise informed as in the name of director and yet not registered in the name of the Company. 7614115/- But recorded in the books
3. Premised located at Plot No. 32 at Vibrant Industrial Park GIDC Vapi Gujarat Title of premises is in the name of Directors which is then leased in the name of company but the lease deed is not registered. 18907660/- Recorded in the books as Deferred Lease Assets & accounted on fair market value as per Ind AS Rs. 18907660/- being lease period is 10 years.

2. Inventory

According to the information and explanation furnished by the management which has beenrelied upon by us the inventories have been physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on physicalverification.

3. Loan given by company

According to the information and explanations given to us the company has not grantedany loans secured or unsecured to companies firms limited liability partnerships orother parties covered in the register maintained under Section 189 of the Companies Act2013 (“the Act”) in during the year.

4. Loan to directors and investment by the company

In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to Director of the and TheCompany does not have any current and non-current Investment during the year.

5. Deposits

According to the information and explanations given to us the Company has not acceptedany deposits under sections 73 & 76 or any other relevant provision of companies act(“the act”) and the rule framed there under. Therefore the provisions of Clause(v) of paragraph 3 of the Order is not applicable to the Company.

6. Cost records

The Central Government has not prescribed maintenance of cost records to the companypursuant to the Companies (Cost Records and Audit) Rules 2014 as amended by sub section(1) of Section 148 of the Companies Act 2013.

7. Statutory dues

• According to the information and explanations given to us there were noundisputed amounts payable in respect of Provident Fund Employees State Insurance Incometax Goods & Service Tax Customs Duty Cess and other material statutory dues whichhave remained outstanding as at 31st March 2020 for a period of more than six months fromthe date they became payable. According to the books of accounts and records examined byus and according to generally accepted auditing practices in India in our opinion thecompany has been regular in depositing undisputed statutory dues.

• According to the information and explanations given to us there are noStatutory dues which have not been deposited as on March 312020 on account of disputes.except

Particulars Period related Amount (in Rs.) Forum where dispute is pending
TDS DEMAND A.Y. 2014-15 108000/- CIT (A) on 15.03.2020 vide Ack. No. 434456621150319

8. Repayments of loans

According to the information and explanations given to us the company has notdefaulted in repayment of dues to financial institutions or banks. The Company does nothave any loans from Government and has not issued any debentures during the year.

9. Utilization of funds

During the year The Company has not raised money by way of initial public offer orfurther public offer (including debt instruments). The Term Loans availed were applied forthe purposes for which they are obtained.

10. Reporting of frauds

According to the information and explanations given to us no material fraud on or bythe Company has been noticed or reported during the year under audit.

11. Approvals of managerial remuneration

According to the information and explanations give to us and based on our examinationof the records of the Company the Company has paid / provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act.

12. Nidhi company

In our opinion the company is not a chit fund or a Nidhi mutual benefit fund/society.Therefore the provisions of clause (xii) of Para 3 of the said order are not applicableto the company.

13. Related party transaction

According to the information and explanations given to us and based on our examinationof the records of the Company transactions with the related parties are in compliancewith sections 177 and 188 of the Act where applicable and details ofsuch transactions havebeen disclosed in the financial statements as required by the applicable accountingstandards.

14. Private Placement or preferential allotment

According to the information and explanations give to us and based on our examinationof the records of the Company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year

15. Non cash transaction

According to the information and explanations given to us and based on our examinationof the records of the Company the Company has not entered into noncash transactions withits directors or persons connected with him.

16. Registration of Reserve Bank of India (RBI) act 1934

The Company is not required to be registered under section 45-IA of the Reserve Bank ofIndia Act 1934.

For SUBHASH CHAND JAIN ANURAG & ASSOCIATES
CHARTERED ACCOUNTANTS
FRN-004733C
(S.C. JAIN)
Date: 30th July 2020 PARTNER
Place: Indore M.NO. 072062
UDIN- 20072062AAAABO3089

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 17 (f) under ‘Report on Other Legal and RegulatoryRequirements' of our report of even date)

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 of ChoksiLaboratories Limited (“the Company”) as of 31st March 2020 in conjunctionwith our auditof the separate Ind AS financial statements of the Company for the yearended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

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 Reporting (the“Guidance Note”) issued by the Institute of Chartered Accountants of India(“ICAI”). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on audit of Internal financial controls over financial reporting (the "Guidance Note") and the Standards on Auditing issued by ICAI and deemed tohave been prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal financial controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.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 systemover financial reporting.

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 Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition ofthecompany's assets that could have material 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 mis statements 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 thepolicies or procedures may deteriorate.

OPINION

In our opinion to 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 31st March 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on audit of internal financialcontrols over financial reporting issued by the institute of chartered accountants ofIndia (“ICAI”) .

For SUBHASH CHAND JAIN ANURAG & ASSOCIATES
CHARTERED ACCOUNTANTS
FRN-004733C
(S.C. JAIN)
Date: 30th July 2020 PARTNER
Place: Indore M.NO. 072062
UDIN- 20072062AAAABO3089