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Flexituff Ventures International Ltd.

BSE: 533638 Sector: Industrials
NSE: FLEXITUFF ISIN Code: INE060J01017
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VOLUME 4021
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OPEN 28.40
CLOSE 29.85
VOLUME 4021
52-Week high 43.95
52-Week low 16.55
P/E
Mkt Cap.(Rs cr) 72
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Flexituff Ventures International Ltd. (FLEXITUFF) - Auditors Report

Company auditors report

To the Members of

Flexituff Ventures International Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the standalone financial statements of Flexituff Ventures InternationalLimited (“the Company”) which comprise the Balance Sheet as at 31st March 2022and the Statement of Profit and Loss Statement of Changes in Equity and Statement of CashFlows for the year then ended and notes tothe standalonefinancial statements including asummary of significant accounting policies and other explanatory information. In ouropinion and to the best of our information and according to the explanations given to usexcept for the effects of the matter described in the Basis for Qualified Opinion sectionof our report the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (“the Act”) in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amendedand other accounting principles generally accepted in India of the state of affairs ofthe Company as at March 31 2022 and its loss changes in equity and its cash flows forthe year ended on that date.

Basis for Qualified Opinion

a. The Company has recognized deferred tax asset (net) of Rs. 739.98 million on itscarried forward accumulated losses (including unabsorbed depreciation) and other temporarydifferences. In accordance with Ind AS 12 on Income Taxes a deferred tax asset shall berecognised only to the extent that it is probable that taxable profit will be availableagainst which the deductible temporary differences and unused tax losses can be utilised.Due to the financial difficulties experienced by the Company as stated in Note22(d) andNote 24(c)to the standalone financial statements and significant uncertainty stated inNote 54 to the standalone financial statement we are unable to comment on therecoverability of deferred tax asset and consequential impact if any on the standalonefinancial statements. Had the Deferred tax asset not been created the net loss and totalcomprehensive loss for the year ended March 31 2022 would have been higher by Rs. 739.98million and other equity as on that date would have been lower by the same amount.

b. The Company's Cash Generating Unit (“CGU”) viz. Kashipur Cluster has acarrying value of Rs. 3379.38 million as on March 31 2022 comprising of tangible andintangible assets. The Company has performed an impairment assessment of the CGU asrequired under Ind AS 36- Impairment of Assets. The Company is undergoing financialdifficulties as stated in Note 22(d) and Note 24(c) to the standalone financial statementsand there is significant uncertainty as cited in Note 54 to the standalone financialstatements in respect of the Company's plan to monetize its assets secure funding fromthe bankers/investors restructure its liabilities and normalize its operation We areunable to comment on the appropriateness of the assumptions for the projections used inthe impairment assessment and consequential impairment provision if any to be made inthe standalone financial statements with regard to the CGU.

c. The Company has not provided for interest charge (including penal interest)amounting to Rs. 183.29 million; Rs 171.44 million and Rs 203.07 million for the yearended March 31 2020; March 31 2021 and March 31 2022 respectively on loans outstandingto certain lenders; this constitutes departure from the accrual basis of accountingstipulated under Ind AS 1 - Presentation of Financial Statements. Accordingly interestdue to lenders (gross of TDS deduction) the interest cost and loss during the year endedMarch 31 2020 March 31 2021 and March 31 2022 is understated by Rs 183.29 million Rs.171.44 million and Rs 203.07 million respectively. In the absence of sufficientappropriate audit evidence we are unable to comment upon the consequential impact if anythat may arise from this matter. Refer Note 53 to the standalone financial statements.

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 Standalone FinancialStatements section of our report.

We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (“ICAI”) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ourqualified opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note no. 54 of the standalone financial statements which statesthat the Company has incurred net losses of Rs. 943.96 million during the year ended March31 2022 and has a net current liability position of Rs. 4372.53 million as on that dateand describes certain loans for which the Company is in default. Further the Company'sability to meet its future obligations is dependent on restructuring of its loans. Theseconditions indicate significant doubt on the Company's ability to continue as goingconcern. The Company is in the process of executing an Inter Creditor Arrangement andproposing a resolution plan to the lenders. In view of the above the standalone financialstatements of the Company has been prepared on a going concern basis.

Our opinion is not modified in respect of this matter.

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

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone financial statements and our auditor's report thereon. The Annual Report isexpected to be made available to us after the date of this auditor's report.

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. When we read theAnnual Report if we conclude that there is a material misstatement therein we arerequired to communicate the matter to those charged with governance.

Key Audit Matters

We have determined that there are no key audit matters to communicate in our report.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 standalone financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

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

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

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

We give in “Annexure A” a detailed description of Auditor's responsibilitiesfor Audit of the Standalone Financial Statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2020 (“the Order”)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the “Annexure B” a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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

a). We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit (except asmentioned in the para ii (b) of Annexure B of this report).

b). Except for the effects of the matters described in the Basis of Qualified Opinionsection above in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books.

c). The Balance Sheet the Statement of Profit and Loss the Statement of Changes inEquity and the Statement of Cash Flow dealt with by this Report are in agreement with thebooks of account.

d). Except for the matter described in the Basis of Qualified Opinion section above inour opinion the aforesaid standalone financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e). The matter described in Material Uncertainty Related to Going Concern section ofour report in our opinion may have an adverse effect on the functioning of the Company.

f). On the basis of the written representations received from the directors and takenon record by the Board of Directors none of the directors is disqualified as on March 312022 from being appointed as a director in terms of Section 164 (2) of the Act.

g). The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion above.

h). With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in “Annexure C”.

With respect to the other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:

The Company has disclosed the impact of pending litigations on its financial positionas at March 31 2022 in its standalone financial statements Refer Note 39 to thestandalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at March 31 2022;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March 312022;

iv. (1). The Management has represented that to the best of it's knowledge and beliefno funds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the company to or in any other person(s)/ entity(ies) including foreign entities ('Intermediaries') with the understandingwhether recorded in writing or otherwise that the Intermediary has whether directly orindirectly lend or invest in other persons or entities identified in any manner whatsoeverby or on behalf of the Company (“Ultimate Beneficiaries”) or provide anyguarantee security or the like on behalf of the Ultimate Beneficiaries;

(2). The Management has represented that to the best of it's knowledge and belief nofunds have been received by the Company from any person(s) / entity(ies) includingforeign entities that the company has directly or indirectly lend or invest in otherpersons or entities identified in any manner whatsoever by or on behalf of the FundingParty (“Ultimate Beneficiaries”) or provide any guarantee security or the likeon behalf of the Ultimate Beneficiaries; and

(3). Based on our audit procedures which we have considered reasonable and appropriatein the circumstances and according to the information and explanations provided to us bythe Management in this regard nothing has come to our notice that has caused us tobelieve that the representations made by the Management under sub-clause (1) and (2)contain any material misstatement.

v. The Company has neither declared nor paid any dividend during the year.

3. As required by The Companies (Amendment) Act 2017 in our opinion according toinformation explanations given to us the remuneration paid by the Company to itsdirectors is within the limits laid prescribed under Section 197 of the Act and the rulesthereunder.

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT ON EVEN DATE ON THE STANDALONE

FINANCIAL STATEMENTS OF FLEXITUFF VENTURES INTERNATIONAL LIMITED

Auditor's Responsibilities for the Audit of the 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 therisks of material misstatement of the financial statements whether due to fraud or errordesign and perform audit procedures responsive to those risks and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resultingfrom error as fraud may involve collusion forgery intentional omissionsmisrepresentations 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) of theAct we are also responsible for expressing our opinion on whether the company hasinternal financial controls with reference to financial statements in place and theoperating effectiveness 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.

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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 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 of such communication.

ANNEXURE B TO

INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE

FINANCIAL STATEMENTS OF FLEXITUFF VENTURES INTERNATIONAL LIMITED FOR THE YEAR ENDEDMARCH 31 2022

[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'in the Independent Auditors' Report]

i.(a). (1). The company has maintained proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment.

(2). The Company has maintained proper records showing full particulars of intangibleassets.

(b). All the Property Plant and Equipment have not been physically verified by themanagement during the year but there is a regular programme of verification which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification.

According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties (otherthan properties where the company is the lessee and the lease agreements are duly executedin favour of the lessee) as disclosed in the financial statements are held in the name ofthe Company. (d). According to the information and explanations given to us the Companyhas not revalued its property plant and Equipment (including Right of Use assets) and itsintangible assets. Accordingly the requirements under paragraph 3(i)(d) of the Order arenot applicable to the Company.

(e). According to the information and explanations given to us no proceeding has beeninitiated or pending against the Company for holding benami property under the BenamiTransactions (Prohibition) Act 1988 and rules made thereunder. Accordingly theprovisions stated in paragraph 3 (i) (e) of the Order are not applicable to the Company.

ii.(a). The inventory (excluding stocks with third parties) has been physicallyverified by the management during the year. In respect of inventory lying with thirdparties these have substantially been confirmed by them. In our opinion the frequencycoverage and procedure of such verification is reasonable. No material discrepancies werenoticed on verification between the physical stocks and the book records. (b). The companyhas been sanctioned working capital limits in excess of five crore rupees in aggregatefrom banks or financial institutions on the basis of security of current assets. Howeverthe Company has not provided us with the quarterly Returns or statements filed by theCompany to the banks or financial institutions. Accordingly in the absence of requiredinformation we are unable to comment on whether the quarterly returns or statements filedby the company with such banks or financial institutions are in agreement with the booksof account of the Company or not.

iii.(a). According to the information explanation provided to us the Company has notprovided advances in the nature of loans or provided security to any other entity.However the Company has provided loans or given guarantee to any other entity. Thedetails of such loans and guarantees are as follows:

(Amount in Rs million)

Guarantees Loans
Aggregate amount granted/provided during the year
- Subsidiaries Nil 1.78
- Others Nil Nil
Balance Outstanding as at balance sheet date in respect of above cases
- Subsidiaries Nil 246.83
- Others 950.20 Nil

(b). In relation to investments guarantees provided securities given according tothe information and explanations given to us and based on the audit procedures performedby us we are of the opinion that the terms and conditions of the loans and advancesprovided are not prejudicial to the interest of the Company.

In case of the loans and advances in the nature of loan schedule of repayment ofprincipal and payment of interest have not been stipulated. In the absence of stipulationof repayment terms we are unable to comment on the regularity of repayment of principaland payment of interest.

(d). There are no amounts overdue for more than ninety days in respect of the loangranted to Company/ Firm/ LLP/ Other Parties.

(e). According to the information explanation provided to us the loan or advance inthe nature of loan granted has not fallen due during the year. Hence the requirementsunder paragraph 3(iii) (e) of the Order are not applicable to the Company.

(f). According to the information explanation provided to us the Company has grantedloans/advances in the nature of loans repayable on demand or without specifying any termsor period of repayment. The details of the same are as follows:

All Parties Promoters Related Parties
Aggregate amount of loans/advances in nature of loans - Repayable on demand (A) 246.83 Nil 246.83
- Agreement does not specify any terms or period of repayment (B) Nil Nil Nil
Total (A+B) 246.83 Nil 246.83
Percentage of loans/advances in nature of loans to the total loans 100% - 100%

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act in respect ofloans investments guarantees and security made. v. In our opinion and according to theinformation and explanations given to us the Company has not accepted any deposits fromthe public within the meaning of Sections 73 74 75 and 76 of the Act and the rulesframed there under.

vi. We have broadly reviewed the books of account relating to materials labour andother items of cost maintained by the Company pursuant as specified by the CentralGovernment for the maintenance of cost records under subsection (1) of section 148 of theAct and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have not however made a detailed examination of the recordswith a view to determine whether they are accurate or complete.

vii.(a). According to the information and explanations given to us and the records ofthe Company examined by us in our opinion undisputed statutory dues including duty ofcustoms have been regularly deposited with the appropriate authorities; howeverundisputed statutory dues including profession tax and goods and service tax have beengenerally regularly deposited with the appropriate authorities though there has beenslight delays in few cases and undisputed statutory dues including provident fundemployees' state insurance and income-tax have not been regularly deposited with theappropriate authorities and there have been serious delays in large number of cases.

Statutory dues which were outstanding as at March 31 2022 for a period of more thansix months from the date they became payable are as follows:

Name of the statute Nature of the dues Amount (In Rs. Million) Period to which the amount relates Due Date Date of Payment Remarks if any
Income Tax Act 1961 Tax Deducted at Source (TDS) 1.56 August 2021 September 07 2021 Unpaid

(b). According to the information and explanation given to us and examination ofrecords of the Company the outstanding dues of income-tax goods and service tax customsduty cess and any other statutory dues on account of any dispute are as follows:

Name of the statute Nature of dues Amount Demanded (Rs. Million) Amount Paid (Rs. Million) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax penalty and interest thereon 19.12 18.44 FY 2004-05 to FY 2006-07; FY 2009-10 FY 2012-13 to FY 2013-14 and FY 2015-16 to FY 2017-18 Commissioner of Income Tax (Appeals)
0.81 0.81 FY 2011-12 Income Tax Appellate Tribunal
Central Sales Tax Act 1956 Sales Tax 32.29 9.33 FY 2009-10 to 2014-15 Appellate Authority - Commissioner's Level Haldwani
M.P. Commercial Tax Act 1994 Sales Tax 2.91 0.87 FY 2011-12 2013-14 and 2016-17 Appellate Authority - Additional Commissioner of Commercial Tax Indore Division
M.P. Entry Tax Act 1976 Entry Tax 13.52 6.01 FY 2006-07 to FY 2009-10 Appellate Board M.P. Tax Tribunal Bhopal
0.38 0.09 FY 2010-11 Appellate Authority - Additional Commissioner of Commercial Tax Indore Division
Uttarakhand VAT Act 2005 Sales Tax 11.20 9.79 FY 2012-13 to FY 2014-15 Appellate Authority - Commissioner's Level - Haldwani
Customs Act 1962 Custom Duty penalty and interest thereon 0.96 0.35 FY 2004-05 Custom Excise and Service Tax Appellate Tribunal Kandla
Central Excise Act 1944 Excise Duty penalty and interest thereon 11.82 1.18 FY 2015-16 Custom Excise and Service Tax Appellate Tribunal New Delhi
20.13 - FY 2005-06 to FY 2007-08 Honorable Madhya Pradesh High Court
Central Goods and Service Tax 2017 & State Goods and Service Tax Act 2017 Integrated Goods and Service Tax Act 2017 Service Tax penalty and interest thereon IGST penalty and interest thereon CGST and SGST penalty and interest thereon 0.36 - FY 2017-18 Appellate Authority - Commissioner's Level
1.12 - FY 2017-18 to FY 2019-20 Appellate Authority - Commissioner's Level
455.54 FY 2017-18 to FY 2019-20 Honorable Uttrakhand High Court

viii. According to the information and explanations given to us there are notransactions which are not accounted in the books of account which have been surrenderedor disclosed as income during the year in Tax Assessment of the Company. Also there areno previously unrecorded income which has been now recorded in the books of account.Hence the provision stated in paragraph 3(viii) of the Order is not applicable to theCompany. ix.

(a). In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to except in the following cases detailsof which are as follows:

Particulars Amount of default as at March 31 2022 (Rs. Millions) Period of default since
Principal Interest @
Name of the lenders in case of:
i) Financial Institution:
1. IFCI Limited 400.37 174.25 July 2019
2. Tata Capital Financial Services Limited 17.60 1.68 October 2020
3. International Finance Corporation 682.26 159.99 January 2019
4. TPG Growth II SF Pte Ltd 1279.25 500.35 June 2019
ii) Bank:
1. Punjab National Bank # 872.68 - December 2021
2. Bank of Baroda # 496.86 - January 2020
3. Central Bank of India # 154.14 - December 2021

# The Company has over utilized the cash credit facilities based on drawing powersanctioned by banks in February 2022 due to devolvement of Letter of Credit issued bybanks.

@ The interest cited in above table is gross of interest not accrued as mentioned inNote 53 of the standalone financial statements.

(b). According to the information and explanations given to us and on the basis of ouraudit procedures we report that the company has not been declared wilful defaulter by anybank or financial institution or government or any government authority.

In our opinion and according to the information explanation provided to us no moneywas raised by way of term loans. Accordingly the provision stated in paragraph 3(ix)(c)of the Order is not applicable to the Company.

(d). In our opinion according to the information explanation provided to us there areno funds raised on short term basis. Accordingly the provision stated in paragraph3(ix)(d) of the Order is not applicable to the Company.

(e). According to the information explanation given to us and on an overall examinationof the standalone financial statements of the Company we report that the company has nottaken any funds from an any entity or person on account of or to meet the obligations ofits subsidiaries associates or joint ventures.

(f). According to the information and explanations given to us and procedures performedby us we report that the Company has not raised loans during the year on the pledge ofsecurities held in its securities joint ventures or associate companies.

x. (a). The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Accordingly the provisionsstated in paragraph 3 (x)(a) of the Order are not applicable to the Company.

(b). According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully partly or optionally convertibledebentures during the year. Accordingly the provisions stated in paragraph 3 (x)(b) ofthe Order are not applicable to the Company.

xi.(a). During the course of our audit examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company.

(b). We have not come across of any instance of material fraud by the Company or on theCompany during the course of audit of the standalone financial statement for the yearended March 31 2022 accordingly the provisions stated in paragraph (xi)(b) of the Orderis not applicable to the Company. As represented to us by the management there are nowhistle-blower complaints received by the Company during the course of audit. Accordinglythe provisions stated in paragraph (xi)(c) of the Order is not applicable to company.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the provisions stated in paragraph 3(xii) (a)to (c) of the Order are not applicable to the Company. xiii. According to the informationand explanations given to us and based on our examination of the records of the Companytransactions with the related parties are in compliance with sections 177 and 188 of theAct where applicable and details of such transactions have been disclosed in thestandalone financial statements as required by the applicable accounting standards. xiv.

(a). In our opinion and based on our examination the Company has an internal auditsystem commensurate with the size and nature of its business.

(b). We have considered internal audit reports issued by internal auditors during ouraudit. xv. According to the information and explanations given to us in our opinionduring the year the Company has not entered into non-cash transactions with directors orpersons connected with its directors and hence provisions of section 192 of the Act arenot applicable to company. Accordingly the provisions stated in paragraph 3(xv) of theOrder are not applicable to the Company. xvi.

(a). In our opinion the Company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions stated in paragraphclause 3 (xvi)(a) of the Order are not applicable to the Company. (b). In our opinion theCompany has not conducted any Non-Banking Financial or Housing Finance activities withoutany valid Certificate of Registration from Reserve Bank of India. Hence the reportingunder paragraph clause 3 (xvi)(b) of the Order are not applicable to the Company.

The Company is not a Core investment Company (CIC) as defined in the regulations madeby Reserve Bank of India. Hence the reporting under paragraph clause 3 (xvi)(c) of theOrder are not applicable to the Company. (d). The Company does not have CIC as a part ofits group.

Hence the provisions stated in paragraph clause 3 (xvi)(d) of the Order are notapplicable to the Company. xvii. Based on the overall review of standalone financialstatements of the Company has incurred cash losses in the current financial year and inthe immediately preceding financial year. The details of the same are as follows:

(Amount in Rs million)

Particulars March 31 2022 March 31 2021
Cash Losses 490.29 786.37

xviii.There has been no resignation of the statutory auditors during the year. Hencethe provisions stated in paragraph clause 3 (xviii) of the Order are not applicable to theCompany. xix. According to the information and explanations given to us and based on ourexamination of financial ratios ageing and expected date of realisation of financialassets and payment of liabilities other information accompanying the standalone financialstatements our knowledge of the Board of Directors and management plans we are of theopinion that a material uncertainty exists as on the date of audit report. (Refer para:Material Uncertainty Related to Going Concern in audit report) xx. According to theinformation and explanations given to us the provisions of section 135 of the Act are notapplicable to the Company. Hence the provisions of paragraph (xx)(a) to (b) of the Orderare not applicable to the Company.

xxi. There are no Qualifications/adverse remarks by the respective auditors in theCompanies (Auditor's Report) Order (CARO) Reports of the companies included in theconsolidated financial statements. Accordingly the provisions stated in paragraph clause3 (xxi) of the Order are not applicable to the Company.

ANNEXURE C TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF FLEXITUFF VENTURES INTERNATIONAL LIMITED

[Referred to in paragraph 2 (h) under 'Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (the Act)

We have audited the internal financial controls with reference to standalone financialstatements of Flexituff Ventures International Limited (“the Company”) as ofMarch 31 2022 in conjunction with our audit of the standalone financial statements of theCompany for the year ended 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 with reference to standalone financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI) (the“Guidance Note”). 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 Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingissued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether internal financial controls with reference tostandalone financial statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to standalone financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to standalonefinancial statements included obtaining an understanding of internal financial controlswith reference to standalone financial statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thestandalone 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 withreference to standalone financial statements.

Meaning of Internal Financial Controls with Reference to Standalone FinancialStatements

A Company's internal financial control with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A Company's internalfinancial control with reference to standalone financial statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; 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 standalone financial statements.

Inherent Limitations of Internal Financial Controls with Reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects internal financial controlswith reference to standalone financial statements and such internal financial controlswith reference to standalone financial statements were operating effectively as at March31 2022 based on the internal control with reference to standalone financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note.

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