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K G Denim Ltd.

BSE: 500239 Sector: Industrials
NSE: KGDENIM ISIN Code: INE104A01012
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NSE 05:30 | 01 Jan K G Denim Ltd
OPEN 33.95
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VOLUME 2568
52-Week high 74.00
52-Week low 29.75
P/E
Mkt Cap.(Rs cr) 85
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 33.95
CLOSE 33.25
VOLUME 2568
52-Week high 74.00
52-Week low 29.75
P/E
Mkt Cap.(Rs cr) 85
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

K G Denim Ltd. (KGDENIM) - Auditors Report

Company auditors report

TO THE MEMBERS OF K G DENIM LIMITED

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS Opinion

1. We have audited the accompanying standalone financial statements ofKG Denim Limited (‘the Company') which comprise the standalone Balance sheet as at31st March 2022 the standalone statement of profit and loss (including OtherComprehensive Income) the standalone Statement of Cash Flow and the Standalone Statementof changes in Equity for the year then ended and a summary of the significant accountingpolicies and other explanatory information.

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid standalone financial statements ("thefinancial statements") give the information required by the Companies Act 2013(‘the Act') in the manner so required and give a true and fair view in conformitywith the Indian Accounting Standards (‘Ind AS') specified under Section 133 of theAct read with the Companies (Indian Accounting Standards) Rules 2015 and other accountingprinciples generally accepted in India of the state of affairs of the Company as at 31 stMarch 2022 and its loss (including other comprehensive loss) its cash flows and thechanges in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditingspecified under Section 143(10) of the Act. Our responsibilities under those standards arefurther described in the "Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements" section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (‘ICAI') together with the ethical requirements that are relevant to our auditof the financial statements under the provisions of the Act and the rules thereunder andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the standalone financial statementsof the current period. These matters were addressed in the context of our audit of thefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr.No Key Audit Matter Auditor?s Response
1. Litigations - Contingencies Principal Audit Procedures
The Company has ongoing litigations with various authorities and third parties which could have a significant impact on the results if the potential exposures were to materialise. Our audit approach was a combination of test of internal controls and substantive procedures including:
The amounts involved are significant and the application of accounting standards to determine the amount if any to be provided as a liability or disclosed as a contingent liability is inherently subjective. Assessing the appropriateness of the design and implementation of the Company's controls over the assessment of litigations and completeness of disclosures. Supporting documentation are tested for the positions taken by the management meetings are conducted with in-house legal counsel and/or legal team and minutes of Board to confirm the operating effectiveness of these controls.
Claims against the Company not acknowledged as debts are disclosed in the Financial Statements by the Company after a careful evaluation of the facts and legal aspects of the matters involved. The outcome of such litigation is uncertain and the position taken by management involves significant judgment and estimation to determine the likelihood and/or timing of cash outflows and the interpretation of preliminary and pending court rulings. Involving our direct and indirect tax specialists to assess relevant historical and recent judgements passed by the appropriate authorities in order to challenge the basis used for the accounting treatment and resulting disclosures.
Refer Note 41 to the Financial Statements

Information other than the Financial Statements and Auditor?sReport thereon

5. The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Board'sReport Corporate Governance Report Management Discussion and Analysis but does notinclude the standalone financial statements and our auditor's report thereon. The Board'sReport Corporate Governance Report Management Discussion and Analysis are expected to bemade available to us after the date of this auditor's report.

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

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

When we read the Board's report Corporate Governance ReportManagement Discussion and Analysis if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

6. The accompanying standalone financial statements have been approvedby the Company's Board of Directors. The Company's Board of Directors are responsible forthe matters stated in section 134(5) of the Act with respect to the preparation andpresentation of these standalone financial statements that give a true and fair view offinancial position financial performance including other comprehensive income changes inequity and cash flows of the Company in accordance with the Ind AS specified under section133 of the Act 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 of 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

7. In preparing the financial statements the Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless Board of Directors either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.

8. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor?s Responsibilities for the Audit of the StandaloneFinancial Statements

9. Our objectives are to obtain reasonable assurance about whether thefinancial 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 Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

10. As part of an audit in accordance with Standards on Auditingspecified under Section 143(10) of the Act we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system with reference tofinancial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of Board of Directors' use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

11. We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

12. We also provide those charged with governance with a statement thatwe have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

13. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

14. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of section 143(11) of the Act we give in the "Annexure A" 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 based on our audit wereport the extent applicable that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of our auditof the accompanying standalone financial statements.

(b) in our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

(c) the standalone financial statements dealt with by this report arein agreement with the books of account;

(d) in our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standards specified under Section 133 of the Act readwith relevant rules issued thereunder;

(e) on the basis of the written representations received from thedirectors as on 31st March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2022 from being appointed as a director interms of Section 164 (2) of the Act;

(f) With respect to the adequacy of internal financial controls withreference to financial statements of the Company as on 31st March 2022 and theoperating effectiveness of such controls refer to our report in "Annexure B".

(g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended inour opinion and to the best of our information and according to the explanations given tous the remuneration paid by the company to its directors during the year is in accordancewith the provisions of and limits laid down under section 197 of the Act.

(h) with respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 (asamended) in our opinion and to the best of our information and according to theexplanations given to us:

i. the Company has disclosed the impact of pending litigations on itsfinancial position as at 31st March 2022 in the standalone financialstatements;

ii. the Company did not have any long-term contracts includingderivatives contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company during the yearended 31st March 2022.

iv. a) The management has represented that to the best of itsknowledge and belief no funds have been advanced or loaned or invested (either fromborrowed funds or securities premium or any other sources or kind of funds) by the Companyto or in any other person(s) or entity(ies) including foreign entities ("theIntermediaries") with the understanding whether recorded in writing or otherwisethat the Intermediary shall whether directly or indirectly lend or invest in otherpersons or entities identified in any manner whatsoever by or on behalf of the Company("the Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries.

(b) The management has represented that to the best of its knowledgeand belief no funds have been received by the Company from any person(s) or entity(ies)including foreign entities ("the Funding Parties") with the understandingwhether recorded in writing or otherwise that the Company shall whether directly orindirectly lend or invest in other persons or entities identified in any mannerwhatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on such audit procedures performed as considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the management representation under sub-clauses (a) and (b) above containsany material misstatement.

v. In our opinion and according to the information and explanationsgiven to us the dividend declared during earlier years and unpaid dividend paid duringthe year by the Company is in compliance with Section 123 of the Act.

For Mohan & Venkataraman
Chartered Accountants
Firm Regn. Number: 007321S
V. Karthikeyan
Partner
Membership No.208828
UDIN: 22208828AJSUCF5847
Place: Coimbatore
Date: 27.05.2022

Referred to in paragraph 14 of the Independent Auditors? Report ofeven date to the members of K G Denim Limited on the standalone financial statements forthe year ended March 31 2022.

i. (a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipmentand relevant details of right to use assets.

(B) The Company does not have any intangible assets and hence clause(i) (a) (B) of the order is not applicable.

(b) The property plant and equipment are physically verified by theManagement according to a phased programme designed to cover all the items over a periodof three years which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the programme a portion of theproperty plant and equipment has been physically verified by the Management during theyear and no material discrepancies have been noticed on such verification.

(c ) In our opinion and according to the information and explanationsgiven to us and on the basis of our examination of property tax receipts registered saledeed / transfer deed / conveyance deed and the records of the Company provided to us wereport that title in respect of self-constructed buildings and the title deeds of all theimmovable properties (other than properties where the Company is the lessee and the leaseagreements are duly executed in favour of the lessee) disclosed in the financialstatements included under Property Plant and Equipment are held in the name of theCompany as at the balance sheet date.

(d) The Company has not revalued its property plant and Equipment(including Right of Use assets) or intangible assets or both during the year.

(e) In our opinion and according to the information and explanationsgiven to us and on the basis of our examination of the records of the Company noproceedings have been initiated or are pending against the Company for holding any benamiproperty under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) and rules madethereunder.

ii. (a) The inventories (except for stocks held with third parties)were physically verified during the year by the Management at reasonable intervals. In ouropinion and based on information and explanations given to us the coverage and procedureof such verification by the Management is appropriate having regard to the size of theCompany and the nature of its operations. For stocks held with third parties at theyear-end written confirmations have been obtained. The discrepancies noticed onverification between the physical stocks and the book records were not exceeding 10% inthe aggregate for each class of inventory and have been properly dealt with in the booksof account.

(b) According to the information and explanations given to us theCompany has been sanctioned working capital limits in excess of Rs.5 Crore in aggregateduring the year from banks on the basis of security of current assets. In our opinion andaccording to the information and explanations given to us the quarterly returns orstatements (comprising stock statements statements on ageing analysis of the debtors /other receivables and other stipulated financial information) filed by the Company withsuch banks are not in agreement with the

unaudited book of account of the company of the respective quarters asgiven hereunder. (Amount Rs.in Lakhs)

Quarter Ended as on Stocks as per stock statement Trade Debtors as per Stock Statement Stocks as per Books of accounts Trade Debtors as per Books of accounts
30.06.2021 12126.61 13826.14 12888.34 9563.53
30.09.2021 11539.68 10285.85 12184.25 10182.77
31.12.2021 12891.36 8436.73 13398.88 10755.11
31.03.2022 13619.17 7870.06 15405.32 9373.17

iii. (a) In our opinion and according to the information andexplanations given to us during the year the Company has not made investments inprovided any guarantee or security or granted any loans or advances in the nature ofloans secured or unsecured to companies firms Limited Liability Partnerships or anyother parties except corporate guarantee of 500 lakhs to its subsidiary Trigger ApparelsLimited.

(b) In our opinion and according to the information and explanationsgiven to us the investments made guarantees provided and terms and conditions of theguarantees provided (including in earlier years) are not prejudicial to the Company'sinterest.

(c) The company has not granted any loans and advance in the nature ofloans and hence paragraph 3 iii (c ) (d) (e) and (f) of the order is not applicable.

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 185 and 186 of theCompanies Act 2013 in respect of loans investments made and the guarantees andsecurities provided as applicable.

v. In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits or there is no amount which hasbeen considered as deemed deposit with the meaning of Sections 73 to 76 of the Act and theRules framed there under. Accordingly reporting under clause 3(v) of the Order is notapplicable to the company.

vi. The company has maintained the cost records prescribed by theCentral Government under Section 148 (1) of the Act however we have not made detailedexamination of such records.

vii. According to information and explanation given to us in respectof statutory dues

(a) the Company has been regular in depositing undisputed statutorydues including Goods and Services tax Provident Fund Employees' State Insurance IncomeTax Sales Tax Service Tax duty of Customs duty of Excise Value Added Tax Cess andother material statutory dues applicable to it with the appropriate authorities.

There were no undisputed amounts payable in respect of Goods andService tax Provident Fund Employees' State Insurance Income Tax Sales Tax ServiceTax duty of Customs duty of Excise Value Added Tax Cess and other material statutorydues in arrears as at March 312022 for a period of more than six months from the datethey became payable.

(b) According to the information and explanations given to us and therecords of the Company examined by us there are no due which have not been deposited withthe appropriate authorities on account of any dispute except for the following;

Name of Statute Nature of Dues Amount Rs. in Lakhs Period to which the amount relates Forum where the dispute is pending
Customs Act Custom Duty 7.49 FY 2006-07 Customs Excise and Service Tax
0.33 FY 2008-09 Appellate Tribunal Chennai.
112.61 FY 2013-14 Out of this
Rs.112.61 lakhs was stayed by CESTAT Chennai.
Customs Act Custom-Duty Draw back and 247.74 01st April 2005 to 30th September 2006 High Court of Madras (Madurai Bench)
Scheme
Income Tax Act Income Tax 855.86 FY 2016-17 CIT Appeals

viii. According to the information and explanations given to us notransactions were surrendered or disclosed as income during the year in the taxassessments under the Income Tax Act 1961 (43 of 1961) which have not been recorded inthe books of accounts.

ix (a) According to the information and explanation given to us theCompany has not defaulted in repayment of its loans or borrowings or in the payment ofinterest thereon taken from banks and financial institutions. The Company has not takenloans from Government.

(b) According to the information and explanations given to us and onthe basis of our audit procedures we report that the Company has not been declared wilfuldefaulter by any bank or financial institution or government or any government authorityor any other lender.

(c) In our opinion and according to the information and explanationsgiven to us the Company has utilized the money obtained by way of term loans for thepurposes for which they were obtained.

(d) According to the information and explanations given to us and theprocedures performed by us and on an overall examination of the financial statements ofthe Company we report that no funds raised on short term basis have been used forlong-term purposes by the Company.

(e) According to the information and explanations given to us and on anoverall examination of the financial statements of the Company we report that the Companyhas not taken any funds from any entity or person on account of or to meet the obligationsof its subsidiaries associates or joint ventures.

(f) According to the information and explanations given to us wereport that the Company has not raised loans during the year on the pledge of securitiesheld in its subsidiaries joint ventures or associate companies.

x. (a) The Company did not raise money by way of initial public offeror further public offer (including debt instruments) during the year. Accordinglyreporting under clause 3(x)(a) of the order is not applicable to the Company.

(b) The Company has not made any preferential allotment or privateplacement of shares or (fully partly or optionally) convertible debentures during theyear. Accordingly reporting under clause 3 (x) (b) of the Order is not applicable to theCompany.

xi. (a) To the best of our knowledge and according to the informationand explanations given to us no fraud by the Company or no material fraud on the Companyhas been noticed or reported during the period covered by our audit.

(b) No report under Section 143 (12) of the Act has been filed with theCentral Government for the period covered by our audit.

(c) As represented to us by the management there are no whistle blowercomplaints received by the Company during the year.

xii. (a) In our opinion and according to the information andexplanations given to us the Company is not a Nidhi company. Accordingly reporting underclause 3(xii) of the Order is not applicable to the Company.

xiii In our opinion and according to the information and explanationsgiven to us all transactions entered into by the Company with the related parties are incompliance with Sections 177 and 188 of the Act wherever applicable. Further the detailsof such related party transactions have been disclosed in the standalone financialstatements as required under Indian Accounting Standards.

xiv. (a) In our opinion and based on our examination the Company hasan internal audit system commensurate with the size and nature of its business.

(b) We have considered the reports issued by the internal Auditors ofthe Company issued till date for the period under audit.

xv. According to the information and explanations given to us theCompany has not entered into any non-cash transactions with its directors or personsconnected with its them and accordingly provisions of section 192 of the Act 2013 arenot applicable to the Company.

xvi. According to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly reporting under clause 3(xvi) of the Order is not applicable tothe Company.

xvii. The Company has not incurred any cash losses in the currentfinancial year covered by our audit and in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors duringthe year.

xix. According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realization of financialassets and payment of financial liabilities other information accompanying the standalonefinancial statements our knowledge of the Board of Directors and management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report that the Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.

xx. In the absence of average net profits in the immediately threepreceding years there is no requirement for the company to spend any amount under section135 of the Act. The Company has fully spent the required amount up to previous yearfinancial years towards Corporate Social Responsibility (CSR) and there are no unspent CSRamount for the year requiring a transfer to a Fund specified in Schedule VII to theCompanies Act or special account in compliance with provision of sub- section (6) ofsection 135 of said Act. Accordingly reporting under clause (xx) of the order is notapplicable for the year.

xxi. The reporting under clause (xxi) is not applicable in respect ofaudit of standalone financial statements of the Company.

Annexure - B to the Independent Auditors? Report

Independent Auditor?s Report on the Internal Financial Controlswith reference to the standalone financial statements under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")

1. In conjunction with our audit of the standalone financial statementsof KG Denim Limited ("the Company") as at and for the year ended 31st March2022 we have audited the internal financial controls with reference to standalonefinancial statements of the Company as at that date.

Responsibilities of Management and Those charged with Governance forInternal Financial Controls

2. The Company's Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting (the "GuidanceNote") issued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of the company's business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditors? Responsibility for the Audit of the Internal FinancialControls with Reference to Standalone Financial Statements

3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to standalone financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theICAI prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements and theGuidance Note issued by the ICAI. Those standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to standalonefinancial statements were established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls with reference to standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to standalone financial statements includes obtaining anunderstanding of such internal financial controls 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 thefinancial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to standalone financial statements.

Meaning of Internal Financial Controls with Reference to StandaloneFinancial Statements

6. A Company's internal financial controls with reference to standalonefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A Company'sinternal financial control with reference to standalone financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the Company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of theCompany are being made only in accordance with authorisations of management and directorsof the Company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the Company's assets thatcould have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with reference toStandalone Financial Statements

7. Because of the inherent limitations of internal financial controlswith reference to standalone financial statements including the possibility of collusionor improper management override of controls material misstatements due to error or fraudmay occur and not be detected. Also projections of any evaluation of the internalfinancial controls with reference to standalone financial statements to future periods aresubject to the risk that 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

8. In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchcontrols were operating effectively as at 31st March 2022 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote issued by the ICAI.

For Mohan & Venkataraman
Chartered Accountants
Firm Regn. Number: 007321S
V.Karthikeyan
Partner
Membership No.208828
UDIN: 22208828AJSUCF5847
Place: Coimbatore
Date: 27.05.2022

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