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Kirloskar Electric Company Ltd.

BSE: 533193 Sector: Engineering
NSE: KECL ISIN Code: INE134B01017
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OPEN 40.00
PREVIOUS CLOSE 38.65
VOLUME 9837
52-Week high 49.35
52-Week low 16.65
P/E 3.85
Mkt Cap.(Rs cr) 269
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 40.00
CLOSE 38.65
VOLUME 9837
52-Week high 49.35
52-Week low 16.65
P/E 3.85
Mkt Cap.(Rs cr) 269
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kirloskar Electric Company Ltd. (KECL) - Auditors Report

Company auditors report

To the Members of KIRLOSKAR ELECTRIC COMPANY LIMITED BENGALURU

Report on the Audit of the Standalone Financial Statements QualifiedOpinion

We have audited the accompanying Standalone Ind AS financial statementsof KIRLOSKAR ELECTRIC COMPANY LIMITED ("the Company") which comprise theBalance Sheet as at March 31 2022 and the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and Statement of Cash Flows for theyear then ended and Notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us except for the effects of the matter described in the Basis forQualified Opinion paragraph below the aforesaid Standalone Ind AS financial statementsgive the information required by the Companies Act 2013 as amended ("the Act")in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2022 and its Profit including other comprehensive income its cash flows and thechanges in equity for the year ended on that date.

Basis for Qualified Opinion

Attention of the Members is invited to note 36(19) to the StandaloneInd AS financial statements regarding the amounts due to the Company from certainsubsidiaries towards part consideration receivable on sale/assignment of certain immovableproperties receivables interest charged and expenses reimbursed. The amounts due fromthe said subsidiaries aggregates to Rs 11762.42 lakhs (Rs 11771.86 lakhs as at March 312021). Pending disposals/realization of assets by the subsidiaries relying on theManagement Representation provision of Rs 8400.77 lakhs as at March 31 2022 isrecognized. Any shortfall in the realization of the amount outstanding (net of provision)if any could not be ascertained.

We conducted our audit in accordance with Standards on Auditing (SAs)specified under section 143(10) of the Companies Act 2013. Our responsibilities underthose Standards are further described in the ‘Auditor's Responsibilities for theAudit of the Financial Statements' section of our report. We are independent of theCompany in accordance with the ‘Code of Ethics' issued by the Institute ofChartered Accountants of India together with the ethical requirements that are relevant toour audit of the financial statements under the provisions of the Companies Act 2013 andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our qualified opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Ind AS financial statements forthe financial year ended March 31 2022. These matters were addressed in the context ofour audit of the Standalone Ind AS financial statements as a whole and in forming ouropinion thereon and we do not provide a separate opinion on these matters. We havedetermined the matters described below to be the key audit matters to be communicated inour report. For each matter below our description of how our audit addressed the matteris provided in that context.

a. Going Concern Assessment - Effect of erosion in net worth of thecompany

Note 36(20) of the Standalone Ind AS financial statements - Thedirectors have detailed the reasons for preparing these Standalone Ind AS financialstatements on a going concern basis though the Company/Group (consisting of the Companyits subsidiaries and associate) has accumulated losses and their net worth (afterexcluding revaluation reserve) has been eroded. There are certain overdue payments tocreditors and overdue payment of Rs 7.26 Crores payable to a bank. During the year theCompany has repaid all the term loans including the loan assigned to Asset ReconstructionCompany India Limited (ARCIL) which was restructured under JLF mechanism.

We have relied on the representations made by the Company and theappraisal of the restructuring plan including monetization of few non-core assetsprojection of increase in turnover and infusion of funds in the near future. Theappropriateness of the said basis of Going Concern is subject to the Company adhering tothe restructuring plan and infusion of requisite funds. Hence we are of the opinion thatthere is no existence of material uncertainty that may cast a significant doubt on theCompany's ability to continue as a going concern. Our opinion is not modified inrespect of this matter.

Emphasis of Matter

a. Attention of the members is invited to note 36(21) of the StandaloneInd AS financial statements which sets out that the Company has filed Special LeavePetition in respect of demand of resale tax penalty of Rs 527 lakhs before the HonourableSupreme Court of India. Management has represented to us that it is not probable thatthere will be an outflow of economic benefits and hence no provision is required to berecognized in this regard. We have relied on this representation. Our opinion is notmodified in respect of this matter.

Other Information

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the annual reportbut does not include the Standalone Ind AS financial statements and our auditor'sreport thereon. Our opinion on the Standalone Ind AS financial statements does not coverthe other information and we do not express any form of assurance conclusion thereon. Inconnection with our audit of the Standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. As described in the Basis forQualified Opinion section above we were unable to obtain sufficient appropriate auditevidence regarding the quantification of shortfall in realization of considerationreceivable from certain subsidiaries pending disposals/realization of assets by thesubsidiaries. Accordingly we are unable to conclude whether or not the other informationin relation to this is materially misstated with respect to this matter.

Responsibility of Management and Those Charged with Governance forFinancial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these Standalone Ind AS financial statements that give a true and fairview of the financial position financial performance changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the accounting Standards specified under section 133 of the Act. 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 judgments and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Standalone Ind AS financial statements management isresponsible 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 management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the company's financial reporting process.

Auditor's Responsibilities for the Audit of the FinancialStatements

Our objectives are to obtain reasonable assurance about whether theStandalone Ind AS financial statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurancebut is not a guarantee that anaudit conducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Ind AS financialstatements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of thegoing 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'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause 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 standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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.

We also provide those charged with governance with a statement that wehave 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.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matters

1. We did not audit the financial statements/information of one branchthe Kuala Lumpur office of the Company included in the financial statements of theCompany forthe quarter ended and year ended March 312022 whose financial statements/information reflect total assets of Rs 217.10 lakhs as at March 31 2022 and totalrevenues of Rs 0.52 lakhs for the year ended on that date. The financialstatements/information of the said branch has been audited by the Branch Auditors whosereport has been furnished to us. So to the extent the amounts have been derived from suchfinancial statements is based solely on the report of the Branch auditor. Our report isnot modified in respect of this matter.

2. We did not audit the financial statement/information of one branchthe Dubai Office of the Company included in the financial statements of the Company forthe quarter ended and year ended March 31 2022 whose financial statements/ informationreflect total assets of Rs 56.09 lakhs as at March 31 2022 and total revenues of Rs505.98 lakhs for the year ended on that date. The financial statements/information of thesaid branch has been prepared and submitted to us by the Management and our opinion to theextent they have been derived from such financial statements is based solely on thefinancial statements/information provided to us by the Management. Our report is notmodified in respect of this matter.

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 in terms of sub-section (11) ofsection 143 of the Act we give in the "AnnexureA"a statement on the mattersspecified in paragraphs 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 purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books and proper returns adequatefor the purposes of our audit have been received from the branches not visited by us;

c. The report on the accounts of the Kuala Lumpur office in Malaysia of the Companyaudited under Section 143(8) of the Act by the branch auditors have been forwarded to usand have been duly dealt with by us while preparing this report;

d. The Balance Sheet the Statement of Profit and Lossincluding Other ComprehensiveIncome the Statement of Cash Flows and the Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account;

e. In our opinion the aforesaid Standalone Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant rules asamended;

f. On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164 (2) of theAct;

g. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure S";

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

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

i. 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 have disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 36(1a) to theStandalone Ind AS financialstatements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses under applicable laws or accountingstandards;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented that to the best of its knowledge and beliefno funds (which are material either individually or in the aggregate) have been advancedor loaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other person or entity including foreignentity ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediary shall whether directly or indirectly lend or investin other persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;

(b) The Management has represented that to the best of its knowledge and belief nofunds (which are material either individually or in the aggregate) have been received bythe Company from any person or entity including foreign entity ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and(b) above contain any material misstatement.

(d) The Company has not declared or paid any Dividend during the year.

For K N Prabhashankar& Co.
Chartered Accountants
Firm Reg. No. 004982S
A. Umesh Patwardhan
Partner
Place: Bengaluru M. No. 222945 UDIN:22222945AJUUFX8639
Date: May 28 2022

Annexure ‘A' to the Auditors' Report

The Annexure referred to in our report to the members of KirloskarElectric Company Limited for the year ended March 312022. We report that:

i) a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property plant and equipment(PPE).

(B)The Company has maintained proper records showing full particularsof Intangible Assets.

b) Management has physically verified these PPE in various units as pera phased program of physical verification which is at reasonable intervals. Thediscrepancies noticed on such verification were not material however the same has beenproperly dealt with in the books of account.

c) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.

d) The Company has not revalued its Property Plant and Equipment andIntangible Assets during the year.

e) According to the information and explanations given to us there areno proceedings which has been initiated or pending against the Company for holding anybenami property under Benami Transactions (Prohibition) Act 1988. Hence reportingwhether the Company has appropriately disclosed in the financial statements or not doesnot arise.

ii) a) With regard to inventory physical verification has beenconducted by the management at reasonable intervals and certain mistakes noticed in theinventory records have been corrected to the extent identified based on physicalverification taken from time to time. No material discrepancies were noticed.

b) As per the explanations provided to us and records verified by usthe Company has been sanctioned working capital limits in excess of Five crores inaggregate from bankson the basis of security of current assets during the financial yearand the quarterly returns/ statements filed by the company with the banks are in agreementwith the books of account of the Company and no material discrepancies were noticed.

iii) a) The Company has made investments but has not provided anyguarantee or security or granted any advances in the nature of loans secured orunsecured to companies firms Limited Liability Partnerships or any other parties duringthe year.

Since the Company has not provided any loans or advances in the natureof loans or stood guaranteeor provided security to any other entity during the yearreporting under clause 3(iii)(a) (c) (d) (e) & (f) of the Order are not applicable.

b) In our opinion the investments made during the year are primafacie not prejudicial to the Companies' Interest.

iv) In our opinion and according to the information and explanationsgiven to us the company has not granted any loans or provided any guarantees or securityto the parties covered under section 185 of the Companies Act 2013. In our opinion andaccording to the information and explanations given to us the company has complied withthe provisions of section 186 of the Companies Act 2013 in respect of investments made orguarantees given to the wholly owned subsidiaries covered under section 186 of theCompanies Act 2013. There were no loans given nor securities provided to wholly ownedsubsidiaries covered under section 186 of the Companies Act 2013.

v) In our opinion and according to the information and explanationsgiven to us the Company has complied with the directives issued by the Reserve Bank ofIndia and the provisions of sections 73 to 76 of the Companies Act 2013 or any otherrelevant provisions of the said Act and the rules framed there under with regard todeposits accepted from the public. There were no delays in repayment of deposits duringthe financial year ended March 31 2022 and the management has represented to us thatthere are no deposits unpaid as laid down in section 74 and other relevant provisions ofthe Companies Act 2013. Further and according to the informationby the Company no orderhas been passed by the Company Law Board or National Company Law Tribunal or Reserve Bankof India or any Court or any other Tribunal.

vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under sub-section (1) of section 148 of the Act and read with paragraph 2 aboveregarding inventory records we are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not carried out adetailed examination of such records.

vii) a) The Company has been regular in depositing undisputed statutorydues including Provident fund Employees' State Insurance Income-tax Goods andServices Tax Duty of Customs Cess and any Other Statutory Dues barring delays in fewcases in certain months in respect of provident fund. According to the information andexplanations given to us there are no undisputed amounts payable in respect ofabove-mentioned statutory dues which were in arrears as at March 31 2022 for a period ofmore than six months from the date they became payable except in respect of dues ofProvident fund amounting to Rs 942.98 lakhs.

b) According to the information and explanations given to us thefollowing dues of Sales Tax Value Added Tax and Income Tax had not been deposited as atMarch 31 2022 with the relevant authorities on account of disputes.

(Rs In lakhs)

Name of the statue Nature of the dues Amount (Rs in Lakhs.) Period to which the amount relates Forum where dispute is pending
Karnataka Sales Tax Act 1957 Resale tax demanded 228.90 2003 - 2005 Supreme Court
The Central Sales Tax Act 1956 & The Bombay Sales Tax Act 1959 Sales tax demand 684.92 1995-96 to 1999-00 2002-03 to 2008-09 & 2011-12 Joint Commissioner of Commercial Taxes
Income Tax Act 1961 Income Tax Demand 3174.13 AY 2013-2014 & AY 2014-2015 CIT(A)

viii) As per the information and explanations given to us there wereno such transactions relating to previously unrecorded income that have been surrenderedor disclosed as income during the year in the tax assessments under the Income Tax Act1961 (43 of 1961).

ix) a) In our opinion and according to the information and explanationsgiven to us there were no loans taken by the Company from the Government or from thedebenture holders. The Company has not defaulted in repayment of loans or borrowings tobanks and financial institutions except for the following instances of delay/default inrepayment of principal amount and interest in the below table.

(Rs in lakhs)

Lender's Name As at March 31 2022 Period of delay
Principal Interest Total
Corporation Bank 726.92 - 726.92 More than 365 days
Total 726.92 - 726.92

b) As per the information and explanations given to us the Company is not a declaredwilful defaulter by any bank or financial institution or other lender.

c) In our opinion and according to the information and explanations given to us theterm loans were applied for which the loans were obtained.

d) According to the information and explanations given to us and the proceduresperformed by us and on an overall examination of the financial statements of the companywe report that no funds raised on short-term basis have beenused for long-term purposes bythe company.

e) As per the information and explanations given to us and on the basis of ourexamination of books and records the Company has not taken any funds from any entity orperson on account of or to meet the obligations of its subsidiaries associates or jointventures.

f) As per the information and explanations given to us and on the basis of ourexamination of books and records the company has not raised loans during the year on thepledge of securities held in its subsidiaries joint ventures or associate companies.

x) a) The Company has not raised any money byway of initial public offer or furtherpublic offer (including debt instruments) during the year.Hence reporting under clause3(x)(a) of the Order is not applicable

b) The Company has not made any preferential allotment or private placement of sharesor convertibledebentures (fully partially or optionally convertible) during the year.Hence reporting on the compliance under Section 42 and Section 62 of the Companies Act2013 does not arise.

xi) a) According to the information and explanation given to us and on the basis ofexamination of books and records there were no frauds by the Company or on the Companythat has been noticed or reported during the year.

b) As there were no frauds noticed or reported during the year filing of report undersub-section (12)of section 143 of the Companies Act by the auditors in Form ADT-4 asprescribed under rule 13 ofCompanies (Audit and Auditors) Rules 2014 with the CentralGovernment does not arise.

c) According to the information and explanation given to usand basis of ourexaminations of books and records there were no Whistle-blower complaints received duringthe year.

xii) The Company is not a Nidhi Company. Hence reporting under clause (xii) of thesaid Order does not apply.

xiii) In our opinion and according to the information and explanation given to us andas represented to us by the management all transactions with the related parties are incompliance with section 177 and 188 of Companies Act 2013 and the details have beendisclosed in the Standalone Ind AS financial statements as required by the applicableaccounting standards.

xiv) a) In our opinion the Company has an adequate Internal audit system commensuratewith the size and the nature of its business.

b) We have considered the internal audit reports for the year under audit issued to theCompany in determining the nature timing and extent of our audit procedures.

xv) According to the information and explanations given the Company has not enteredinto any non-cash transactions with its Directors or persons connected with its directorsand hence provision of Section 192 of the Companies Act 2013 are not applicable to thecompany.

xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Hence reporting under clause 3(xvi)(a) (b) and (c) of the Orderis not applicable

xvii) The Company has not incurred cash losses during the financial year covered by ouraudit but has incurred cash losses in the immediately preceding financial year.

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

xix) On the basis of the financial ratios ageing and expected dates of realisation offinancial assets and payment of financial liabilities other information accompanying thefinancial statements and as per our knowledge of the Board of Directors and Managementplans we are of the opinion that no material uncertainty exists as on the date of theaudit report indicating that Company is not capable of meeting its liabilities existing atthe balance sheet as and when they fall due within a period of one year from the balancesheet date.

xx) Since the Company does not come within the purview of Section 135 of the CompaniesAct 2013reporting under this clause does not apply.

xxi) Being reporting on Standalone Company reporting on adverse remarks included inthe Consolidated financial statements does not arise.

For K N Prabhashankar& Co.
Chartered Accountants
Firm Reg. No. 004982S
A. Umesh Patwardhan
Partner
Place: Bengaluru M. No. 222945 UDIN:22222945AJUUFX8639
Date: May 28 2022

Annexure ‘B' to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the

Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Kirloskar Electric Company Limited of the Company") as of March 31 2022in conjunction with our audit of the Standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting 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'). 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 offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting isa process 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 controlover financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2022 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For K N Prabhashankar& Co.
Chartered Accountants
Firm Reg. No. 004982S
A. Umesh Patwardhan
Partner
M. No. 222945
Place: Bengaluru UDIN:22222945AJUUFX8639
Date: May 28 2022

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