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Forbes & Company Ltd.

BSE: 502865 Sector: Engineering
NSE: FORBESGOK ISIN Code: INE518A01013
BSE 00:00 | 29 Nov 5199.50 -201.00
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NSE 05:30 | 01 Jan Forbes & Company Ltd
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VOLUME 1517
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P/E 123.92
Mkt Cap.(Rs cr) 6,707
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OPEN 5664.00
CLOSE 5400.50
VOLUME 1517
52-Week high 6002.95
52-Week low 1300.00
P/E 123.92
Mkt Cap.(Rs cr) 6,707
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Forbes & Company Ltd. (FORBESGOK) - Auditors Report

Company auditors report

To the Members of Forbes & Company Limited

Report on the audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of Forbes &Company Limited (“the Company”) which comprise the Balance Sheet as at March312020 and the Statement of Profit and Loss (including Other Comprehensive Income)Statement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanationsgiven to us 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 accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2020 and total comprehensive income(comprising of loss and other comprehensive income) changes in equity and its cash flowsfor the year then ended.

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 Auditors' 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 together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Emphasis of Matter

4. We draw your attention to Note 52 to the standalone financial statements whichdescribes the management's assessment of the impact of the outbreak of Coronavirus(Covid-19) on the business operations of the Company. The Company believes that noadditional adjustments are required in the financial statements however in view ofvarious preventive measures taken (such as complete lock-down including travelrestrictions) and highly uncertain economic environment a definitive assessment of theimpact on the subsequent periods is highly dependent upon circumstances as they evolve.Further our attendance at the physical verification of inventory carried out by themanagement was impracticable under the current lockdown restrictions imposed by thegovernment and we have therefore relied on the related alternative audit procedure toobtain comfort over the existence and condition of inventory at the year end. Our opinionis 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 standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Key audit matter How our audit addressed the key audit matter
(a) Impairment risk of investment in and receivables from a wholly owned subsidiary and (b) Financial exposure relating to guarantee given to the same subsidiary (Refer Notes 8 9 10 11 32B 39 40 and 53 to the standalone financial statements) Our procedures in relation to management's assessment of impairment risk and financial exposures included the following:
The Company has investment aggregating Rs 7650.01 Lakhs (net of impairment) in Forbes Technosys Limited (FTL) a wholly owned subsidiary and also has financial exposure by way of outstanding receivables (including inter-corporate deposits outstanding) aggregating Rs 472.25 Lakhs and financial guarantees given to FTL aggregating Rs 12962.00 Lakhs as on March 312020. • Evaluating and validating the design and operating effectiveness of the controls over determination of recoverable value of investments and receivables (including valuation model assumptions and judgements);
During the year ended March 31 2020 FTL has earned total comprehensive loss aggregating Rs 6014.92 Lakhs and FTL's current liabilities exceeded its current assets by Rs 13306.25 Lakhs. This is an indicator of potential impairment of the investments outstanding receivables and financial exposure relating to financial guarantees given. • Assessing the accuracy and reasonableness of the input data provided by the Management by way of agreeing with approved budgets;
• Analysis of past trends by comparing the historical results vis-a-vis corresponding budgets;
The Company has recognised an impairment charge of Rs 1216.29 Lakhs for the year ended March 31 2020 towards decline in the recoverable value of investments in FTL considering the recoverable value determined by management as described below after considering the present market situation including the impact of Covid-19 on FTL's future business prospects. • Evaluating management expert's independence competence capabilities and objectivity;
• Assessing along with the auditors' experts the reasonableness of the Company's process regarding impairment assessment and assumptions used in the impairment model;
The management has estimated that the balance recoverable value of FTL is sufficient to cover the cumulative carrying value of total exposure in FTL's remaining investments outstanding receivables (including inter-corporate deposits outstanding) and liability if any towards financial guarantees basis valuation performed by the management considering inputs from an independent professional valuer. • Developing independent expectations regarding the impairment testing based on our understanding of the business external industry trends and the subsidiary's historic business activity and evaluating the Company's impairment testing results against our expectations;
The recoverable value of the investment has been determined using the discounted cash flow method which involved significant estimates and judgement including earning growth rate cost escalation/savings discount rate terminal growth rate etc. and is highly dependent on the management's assumptions and management expert's inputs and assumptions and hence considered as a Key Audit Matter. • Performing sensitivity analysis and evaluating whether any reasonably foreseeable change in assumptions could lead to any additional impairment;
• Testing the mathematical accuracy of the underlying calculations; and
• Assessing the adequacy of disclosures in the financial statements.
Based on the above procedures performed the management's assessment in respect of impairment risk of investment in and receivables (including inter-corporate deposits outstanding) from a wholly owned subsidiary and financial exposure relating to guarantee is considered to be reasonable.
(b) Implementation of Revenue recognition standard (Ind-AS 115) for Real Estate Development Activities (Refer Notes 25 and 51 to the standalone financial statements) Our audit procedures included obtaining a listing of contracts with customers from the Management and carrying out a combination of testing of internal financial controls with reference to financial statements for revenue recognition over real estate projects and test of details on a sample of transactions which included:
Consequent to the implementation of Ind-AS 115 effective April 1 2018 there has been change in the Company's policy for revenue recognition in respect of its real estate development projects. • Obtaining an understanding of the process and testing key controls followed by the management over revenue recognition for real estate development projects including controls surrounding implementation of Ind-AS 115;
The determination of the period over which revenue from real estate development activities should be recognized the timing of transfer of control to the customer; and determination of whether the Company has an enforceable right to payment as per requirements of Ind-AS 115 involves significant judgement by the Management. • Evaluating existence and completeness of the list of contracts with customers and examining the mathematical accuracy thereof;
Revenue recognition for real estate development activities is considered as a key audit matter considering significance of amounts involved substantial transitional impact due to implementation of Ind-AS 115 along with related disclosures and involvement of management judgement in establishing enforceable right to payment for performance completed to date. • Obtaining evidence regarding the transfer of control considering the criteria as per Ind-AS 115 for ensuring existence of enforceability of payment for work completed to date; and
• Testing the accuracy and completeness of disclosures in the standalone financial statements.
Based on the above audit procedures performed we did not come across any significant exceptions with regard to the implementation of Ind-AS 115 in respect of real estate development activities.
(c) Assessment of Provisions and Contingent Liabilities (Refer to Notes 19A and 39 to the standalone financial statements) Our audit procedures included the following:
As at March 31 2020 in respect of certain direct and indirect tax matters and other litigations the Company has recognised provisions aggregating Rs 311.50 Lakhs and disclosed contingent liabilities aggregating Rs 15042.44 Lakhs. • Understanding and evaluating the process and controls designed and implemented by the management including testing the operating effectiveness of the relevant controls;
The Company undergoes assessment proceedings and related litigations with direct and indirect tax authorities and with certain other parties. There is a high level of management judgement required in estimating the probable outflow of economic resources and the level of provisioning and/or the disclosures required. The judgement of the management is supported by advice from independent tax and legal consultants as considered necessary by the management. Any unexpected adverse outcomes could significantly impact the Company's reported profit and financial position. • Obtaining the details of the related matters inspecting the supporting evidences and assessing management's evaluation through discussions with management on both the likelihood of outcome and the magnitude of potential outflow of economic resources;
• Understanding the current status of the direct and indirect tax assessments/ litigations;
• Reading recent orders and/ or communication received from the tax authorities and with certain other parties and management responses to such communication;
We considered the above area as the key audit matter due to associated uncertainty of the ultimate outcome and significant management judgement involved. • Where relevant reading the most recent available independent tax / legal advice obtained by management and evaluating the grounds presented therein;
• Evaluating independence objectivity and competence of the management's tax / legal consultants;
• Obtaining direct written confirmations from the Company's legal/ tax consultants (internal/ external) to confirm the status of the assessments as well as had direct discussion with them as and when required.
• Together with the auditor's tax experts assessed the likelihood of the potential financial exposures.
• Assessing the adequacy of disclosure in the standalone financial statements.
Based on the above procedures we did not identify any material exceptions relating to management's assessment of provisions and contingent liabilities.

Other Information

6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the board report and corporategovernance report but does not include the standalone financial statements and ourauditors' report thereon.

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

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

Responsibilities of management and those charged with governance for the financialstatements

7. 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.

8. In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.

Auditors' responsibilities for the audit of the financial statements

9. 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.

10. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism 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 companyhas adequate internal financial controls with reference to financial statements in placeand the 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 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

11. 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.

12. 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.

13. 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 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

14. As required by the Companies (Auditor's Report) Order 2016 (“theOrder”) issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the “Annexure B” a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March312020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.

(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 A”.

(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 on its financialposition in its standalone financial statements - Refer Notes 19A and 39 to the standalonefinancial statements;

ii. The Company has long-term contracts as at March 31 2020 for which there were nomaterial foreseeable losses and did not have any derivative contracts as at March 312020;

iii. Except as referred to in Note 18B to the standalone financial statements therehas been no delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2020.

16. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Sarah George
Partner
Place: Mumbai Membership Number: 045255
Date: July 25 2020 UDIN: 20045255AAAAGZ8605

Annexure A to Independent Auditors' Report

Referred to in paragraph 15(f) of the Independent Auditors' Report of even date to themembers of Forbes & Company Limited on the standalone financial statements for theyear ended March 31 2020

Report on the Internal Financial Controls with reference to financial statements underClause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financialstatements of Forbes & Company Limited (“the Company”) as of March 31 2020in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.

Management's Responsibility for Internal Financial Controls

2. 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the “Guidance Note”) and the Standards on Auditing deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

5. 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 systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2020 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. Also refer paragraph 4 of ourmain audit report.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Sarah George
Partner
Place: Mumbai Membership Number: 045255
Date: July 25 2020 UDIN: 20045255AAAAGZ8605

Annexure B to Independent Auditors' Report

Referred to in paragraph 14 of the Independent Auditors' Report of even date to themembers of Forbes & Company Limited on the standalone financial statements for theyear ended March 31 2020

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

(b) The fixed assets are physically verified by the Management according to a programmedesigned to cover all the items once in two years which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to theprogramme all the fixed assets have been physically verified by the Management during theyear and no material discrepancies have been noticed on such verification.

(c) The title deeds of immovable properties other than self-constructed properties asdisclosed in Notes 5 6 and 45 on fixed assets to the standalone financial statements areheld in the name of the Company except in respect of the following:

Particulars Gross Block (Cost) Net Block (WDV) Remarks
Land and building in Mumbai and Delhi 26.88 12.25 Held in the name of Gokak Patel Volkart Limited 2nd erstwhile name of the Company. (includes land cost Rs 7.80 Lakhs and WDV - Rs 4.55 Lakhs under ‘Right-of-use assets' in Note 45 - Leases and Investment Properties costing Rs 19.08 Lakhs and WDV- Rs 7.70 Lakhs reflected under Note 6 - Investment Properties).
Lease rights for land and self- constructed building at Fort Mumbai in the possession of the Company 1129.42 401.43 The property is in the name of ‘Forbes Forbes Campbell & Co. Limited' and the Company has made an application for renewal of lease for which approval is awaited from authorities. Building cost - Rs 976.95 Lakhs and WDV - Rs 347.24 Lakhs reflected under Note 6 - Investment Properties and Building costing Rs 152.47 Lakhs and WDV - Rs 54.19 Lakhs are reflected in Note 5 - Property Plant and Equipment.
Land factory building and office premises at Mumbai Thane Ahmedabad Bangalore and Chennai 1624.96 1563.79 The premises are in the name of Forbes Gokak Limited the 3rd erstwhile name of the Company (includes Building cost - Rs 7.92 Lakhs and WDV - Rs 3.83 Lakhs classified under Note 5 - Property Plant & Equipment Investments Properties costing Rs 1615 .38 Lakhs WDV - Rs 1559.28 Lakhs included in Note 6 and cost of Rs 1.65 WDV - Rs 0.68 Lakhs under ‘Right-of-use assets' in Note 45 - Lease.
Premises at Chennai 40.76 This investment property is in the name of Facit Asia Limited an entity merged with FAL Industries Limited (this entity was subsequently merged with Forbes Gokak Limited the Company's 3rd erstwhile name).
Premises at Tuticorin 27.36 12.71 This investment property is in the name of Volkart India Limited an entity merged with Patel Volkart Limited (which was subsequently amalgamated with Gokak Mills Limited the Company's 1st erstwhile name).

ii. The physical verification of inventory (excluding stocks with third parties andreal estate work-in-progress) have been conducted at reasonable intervals by theManagement during the year and subsequent to the year end. In respect of inventory lyingwith third parties these have substantially been confirmed by them. The discrepanciesnoticed on physical verification of inventory as compared to book records were notmaterial. Further in respect of real estate work-in-progress inventories (comprising ofexpenditure incurred on acquisition of development rights and other expenditure onconstruction and development thereof) have been physically verified by the managementduring the year by way of site visits and certification of extent of work completed bycompetent persons at reasonable intervals during the year and no material discrepancieswere noticed on such physical verification. Also refer paragraph 4 of our main auditreport.

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 Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii) (c) of the said Order are not applicable to the Company.

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 Companies Act 2013in respect of the loans and investments made and guarantees and security provided by it.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare 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 the Company is generally regular in depositingthe undisputed statutory dues in respect of income tax goods and service tax andprofession tax though there has been a slight delay in few cases and is regular indepositing undisputed statutory dues including provident fund employees' stateinsurance sales tax service tax duty of customs duty of excise value added tax cessand other material statutory dues as applicable with the appropriate authorities. Alsorefer Note 39 to the standalone financial statements regarding management's assessment oncertain matters relating to provident fund. Further for the period March 1 to 31 2020the Company has paid goods and service tax and filed GSTR-3B (after the due date but)within the timelines allowed by the Central Board of Indirect Taxes and Customs under theNotification Number 35/2020 - Central Tax dated April 3 2020 on fulfilment of conditionsspecified therein.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of goods and service tax which have not beendeposited on account of any dispute. The particulars of dues of income tax sales taxservice tax duty of customs duty of excise and value added tax as at March 31 2020which have not been deposited on account of a dispute are as follows:

Name of the Statute Nature of dues Amount ( Rs in Lakhs) Period to which the amount relates Forum where the dispute is pending
The Income Tax Act 1961 Income Tax 25.69 Financial Years 2000-01 and 2011-12 Commissioner of Income Tax (Appeals)
The Finance Act 1994 Service Tax (including interest and penalty as applicable) 2293.35 Financial Years 2007-08 to 2012-13 Customs Excise & Service Tax Appellate Tribunal
1038.89 Financial Year 2005-06 to 2012-13 Commissioner of Service Tax
The Customs Act 1962 Penalty 1.00 Financial Year 2012-13 Commissioner (Appeals)
100.00 Financial Year 2011-12 High Court of Kerala
The Central Excise Act 1944 Excise Duty (including interest and penalty) 2724.52 Financial Years 2005-06 and 2006-07 Customs Excise & Service Tax Appellate Tribunal
Sales Tax Laws Sales Tax (including interest and penalty as applicable) 465.98 Financial Years 1990-91 to 1994-95 1997-98 to 2006-07 2008-09 to 2009-10 and 201314. Appellate Authority - up to Sales Tax Appellate Tribunal

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any bank or dues to debenture holders as at the Balance Sheet date. The Company neitherhas any loans or borrowings from financial institutions or Government as at the BalanceSheet date therefore the provisions of Clause 3(viii) of the Order to that extent arenot applicable to the Company.

ix. In our opinion and according to the information and explanations given to us themoneys raised by way of term loans have been applied on an accrual basis for the purposesfor which they were obtained. As the Company has not raised any moneys by way of initialpublic offer and further public offer (including debt instruments) the provisions ofClause 3(ix) of the Order to that extent are not applicable to the Company.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the standalone financial statements as required underIndian Accounting Standard (Ind AS) 24 Related Party Disclosures specified under Section133 of the Act.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under audit. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Sarah George
Partner
Place: Mumbai Membership Number 045255
Date: July 25 2020 UDIN: 20045255AAAAGZ8605

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