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Dr Agarwals Eye Hospital Ltd.

BSE: 526783 Sector: Health care
NSE: N.A. ISIN Code: INE934C01018
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NSE 05:30 | 01 Jan Dr Agarwals Eye Hospital Ltd
OPEN 418.00
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Buy Price 400.00
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Sell Price 418.00
Sell Qty 2.00
OPEN 418.00
CLOSE 400.00
VOLUME 165
52-Week high 446.00
52-Week low 213.00
P/E
Mkt Cap.(Rs cr) 188
Buy Price 400.00
Buy Qty 25.00
Sell Price 418.00
Sell Qty 2.00

Dr Agarwals Eye Hospital Ltd. (DRAGARWALSEYE) - Auditors Report

Company auditors report

To The Members of Dr. Agarwal's Eye Hospital Limited

Report on the Audit of the Ind AS Financial Statements

OPINION

We have audited the accompanying Ind AS financial statements of Dr. Agarwal's EyeHospital Limited ("the Company") which comprise the Balance Sheet as at 31March 2020 and the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the Statement of Changes in Equity for the year then endedand a summary of significant accounting policies and other explanatory information.

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 the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2020 and its profit total comprehensiveloss its cash flows and the changes in equity for the year ended on that date.

BASIS FOR OPINION

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Ind AS Financial Statements section of our report. Weare independent of the company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountant of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the Ind AS financial statements under the provisions ofthe Act and the Rules made there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the Ind AS financial statements.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto be communicated in our report.

S.No Key Audit Matter Auditor's Response
Impact of first time adoption of Ind AS 116 - Leases: We have performed the following procedures:
As described in Note 38 to the financial statements the Company has adopted Ind AS 116 – "Leases" effective from 1 April 2019. The standard involves certain key judgements and assumptions involving identification of lease determination of the lease term application of appropriate discount rate etc. Evaluated the design and implementation of the relevant controls over the application of the new lease accounting standard and tested the operating effectiveness of such internal controls;
In addition to the above Tested the completeness of lease data provided by the Company by agreeing them to the branch rental schedule scrutiny of ledger balances for identifying potential arrangements in the nature of lease and also made corroborative inquiries with the operations and legal teams.
There also exists a risk that the lease data which underpin the Ind AS 116 transition calculation is incomplete or inaccurate.
The standard also requires certain additional disclosures to be presented in the financial statement. Tested the accuracy of the lease data by reviewing the underlying contracts for key terms and conditions re-computation of Right of use assets and lease liabilities and agreeing them with the respective general ledger balances and disclosure in the financial statements.
The first time adoption of the standard as at 1 April 2019 resulted in the recognition of Right of use asset of Rs. 4260.65 lakhs and Lease Liabilities of Rs. 4629.53 lakhs which was very significant for the Company.
Tested the reasonableness of the assumptions used in determination of the lease term identification of the appropriate discount rate etc. by reviewing the terms and conditions in the contract assessing past trend and by agreeing the discount rate to weighted average cost of capital as applicable.
Based on the above factors the implementation of the new accounting standard on leases has been considered as a key audit matter.
Where lease terms were renegotiated due to impact of COVID 19 verified if necessary adjustments arising from re-measurement of lease liability (including corresponding adjustment to the related right of use asset) where applicable due to lease modifications/ termination is appropriately made.
Evaluated the basis of determination of for impairment indicators if any with respect to Right of Use assets.
Tested the presentation and disclosures with reference to the requirements of Ind AS.

Information Other than the Financial Statements and Auditor's Report Thereon

• The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Management Discussions andAnalysis Report Board Report but does not include the Ind AS financial statements andour auditor's report thereon.

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

• In connection with our audit of the Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Ind AS financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.

• If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.

In preparing the Ind AS financial statements management is responsible for assessingthe Company'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 Responsibility for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS 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 Ind AS financial statements.

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 Ind AS 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 financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act 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 reasonablenessof accounting estimates and related disclosures made by the 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 Ind AS 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 Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the Ind AS financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Ind AS financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Ind AS financial statements.

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 Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's 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

1. As required by Section 143(3) of the Act based on our audit 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 the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

(d.) In our opinion the aforesaid Ind AS financial statements comply with the Ind ASspecified under 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(g.) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i). The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements;

ii). The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses. iii). There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

INDEPENDENT AUDITOR'S REPORT ON AUDIT OF ANNUAL FINANCIAL RESULTS AND REVIEW OFQUARTERLY FINANCIAL RESULTS

TO THE BOARD OF DIRECTORS OF DR. AGARWAL'S EYE HOSPITAL LIMITED

OPINION AND CONCLUSION

We have (a) audited the Financial Results for the year ended 31 March 2020 and (b)reviewed the Financial Results for the quarter ended 31 March 2020 (refer ‘OtherMatters' section below) which were subject to limited review by us both included in theaccompanying "Statement of Financial Results for the Quarter and Year Ended 31 March2020" of Dr. Agarwal's Eye Hospital Limited ("the Company") ("theStatement") being submitted by the Company pursuant to the requirements ofRegulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 as amended ("the Listing Regulations").

(a) Opinion on Annual Financial Results

In our opinion and to the best of our information and according to the explanationsgiven to us the Financial Results for the year ended 31 March 2020: i. is presented inaccordance with the requirements of Regulation 33 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 as amended; and ii. gives a true and fair viewin conformity with the recognition and measurement principles laid down in the IndianAccounting Standards and other accounting principles generally accepted in India of thenet profit and total comprehensive income and other financial information of the Companyfor the year then ended.

(b) Conclusion on Unaudited Financial Results for the quarter ended 31 March 2020

With respect to the Financial Results for the quarter ended 31 March 2020 based on ourreview conducted as stated in paragraph (b) of Auditor's Responsibilities section belownothing has come to our attention that causes us to believe that the Financial Results forthe quarter ended 31 March 2020 prepared in accordance with the recognition andmeasurement principles laid down in the Indian Accounting Standards and other accountingprinciples generally accepted in India has not disclosed the information required to bedisclosed in terms of Regulation 33 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended including the manner in which it is to bedisclosed or that it contains any material misstatement.

BASIS FOR OPINION ON THE AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2020

We conducted our audit in accordance with the Standards on Auditing ("SAs")specified under Section 143(10) of the Companies Act 2013 ("the Act"). Ourresponsibilities under those Standards are further described in paragraph (a) of Auditor'sResponsibilities section below. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India ("theICAI") together with the ethical requirements that are relevant to our audit of theFinancial Results for the year ended 31 March 2020 under the provisions of the Act and theRules there under and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidenceobtained by us is sufficient and appropriate to provide a basis for our audit opinion.

MANAGEMENT'S RESPONSIBILITIES FOR THE STATEMENT

This Statement which includes the Financial Results is the responsibility of theCompany's Board of Directors and has been approved by them for the issuance. The FinancialResults for the year ended 31 March 2020 has been compiled from the related auditedfinancial statements. This responsibility includes the preparation and presentation of theFinancial Results for the quarter and year ended 31 March 2020 that give a true and fairview of the net profit and other comprehensive loss and other financial information inaccordance with the recognition and measurement principles laid down in the IndianAccounting Standards prescribed under Section 133 of the Act read with relevant rulesissued hereunder and other accounting principles generally accepted in India and incompliance with Regulation 33 of the Listing Regulations. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and the 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 Results that give a true and fairview and is free from material misstatement whether due to fraud or error.

In preparing the Financial Results the Board of Directors are responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the financial reportingprocess of the Company.

AUDITOR'S RESPONSIBILITIES

(A) AUDIT OF THE FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2020

Our objectives are to obtain reasonable assurance about whether the Financial Resultsfor the year ended 31 March 2020 as a whole is free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of this Financial Results. As part of anaudit in accordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Annual FinancialResults whether due to fraud or error design and perform audit procedures responsive tothose 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 but not for the purposeof expressing an opinion on the effectiveness of the Company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates made by the Board of Directors.

• Evaluate the appropriateness and reasonableness of disclosures made by the Boardof Directors in terms of the requirements specified under Regulation 33 of the ListingRegulations.

• Conclude on the appropriateness of the Board of Directors' use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theability of the Company to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Statement 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 Annual FinancialResults including the disclosures and whether the Annual Financial Results represent theunderlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the Annual FinancialResults of the Company to express an opinion on the Annual Financial Results.

Materiality is the magnitude of misstatements in the Annual Financial Results thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Annual Financial Results may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Annual Financial Results.

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.

(b) Review of the Financial Results for the quarter ended 31 March 2020

We conducted our review of the Financial Results for the quarter ended 31 March 2020 inaccordance with the Standard on Review Engagements ("SRE") 2410 ‘Review ofInterim Financial Information Performed by the Independent Auditor of the Entity' issuedby the ICAI. A review of interim financial information consists of making inquiriesprimarily of the Company's personnel responsible for financial and accounting matters andapplying analytical and other review procedures. A review is substantially less in scopethan an audit conducted in accordance with SAs specified under section 143(10) of the Actand consequently does not enable us to obtain assurance that we would become aware of allsignificant matters that might be identified in an audit. Accordingly we do not expressan audit opinion.

OTHER MATTERS

• As stated in Note 2 of the Statement the figures for the corresponding quarterended 31 March 2019 are the balancing figures between the annual audited figures for theyear then ended and the year to date figures for the 9 months period ended 31 December2018. We have not issued a separate limited review report on the results and figures forthe quarter ended 31 March 2019. Our report on the Statement is not modified in respect ofthis matter.

• The Statement includes the results for the Quarter ended 31 March 2020 being thebalancing figure between audited figures in respect of the full financial year and thepublished year to date figures up to the third quarter of the current financial year whichwere subject to limited review by us. Our report on the Statement is not modified inrespect of this matter.

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(REFERRED TO IN PARAGRAPH 1(F) UNDER ‘REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS' SECTION 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 Dr.Agarwal's Eye Hospital Limited ("the Company") as of 31 March 2020 inconjunction with our audit of the 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 Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and 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 exists and 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.

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 authorisations of management and directors of the company; and

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

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS 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.

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 31 March 2020 based on the criteria forinternal financial control over financial reporting established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT

(REFERRED TO IN PARAGRAPH 2 UNDER ‘REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS' SECTION OF OUR REPORT OF EVEN DATE)

(i) In respect of property plant and equipment:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

(b) The property plant and equipment were physically verified during the year by theManagement in accordance with a regular programme of verification which in our opinionprovides for physical verification of all the property plant and equipment at reasonableintervals. According to the information and explanations given to us no materialdiscrepancies were noted on such verification.

(c) The Company does not have any immovable properties of freehold or leasehold landand building which are reported under Property Plant and Equipment and hence reportingunder clause(i)(c) of the CARO 2016 is not applicable.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals. No material discrepancies were noted on thephysical verification during the year and the other discrepancies noticed have beenproperly dealt with in the books of accounts.

(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans made investments or provided guarantees and hencereporting under clause (iv) of the CARO 2016 is not applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposits during the year.

(vi) The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2016as amended and prescribed by the Central Government under sub-section (1) of Section 148of the Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been made and maintained.

(vii) According to the information and explanations given to us in respect of statutorydues:

(a) Except for certain delays in remittance of Provident fund Professional tax Taxdeducted at source and Advance tax the Company has generally been regular in depositingother undisputed statutory dues including Employees' State Insurance Customs DutyProfessional Tax Cess and other material statutory dues applicable to it with theappropriate authorities during the year.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods and Services tax Customs Duty Cess professional taxand other material statutory dues in arrears as at 31 March 2020 for a period of more thansix months from the date they became payable.

(c) Details of Income Tax which have not been deposited as at 31 March 2020 on accountof disputes are given below:

Name of the Statute Nature of dues Forum where Dispute is pending Period to which the Amount Relates (Financial Year) Amount Involved (Rs. In Lakhs) Amount Unpaid (Rs. In Lakhs)
Income Tax Act 1961 Income Tax Commissioner of Income Tax (Appeals) 2008-09 82.60 13.02
2009-10 125.58 67.31
2010-11 194.14 40.15
2011-12 164.52 21.10
2013-14 486.17 152.17

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions and banks. The Company has not taken any loans or borrowings from governmentand has not issued any debentures.

(ix) In our opinion and according to the information and explanations given to usmoney raised by way of term loans have been applied by the Company during the year for thepurposes for which they were raised other than temporary deployment pending applicationof proceeds. Further the Company has not raised moneys by way of initial public offer orfurther public offer (including debt instruments).

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid managerial remuneration in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V to the Companies Act 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause 3

(xii) of the CARO 2016 is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its holding or persons connected with him and hence provisionsof Section 192 of the Companies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.#