You are here » Home » Companies ยป Company Overview » Krebs Biochemicals & Industries Ltd

Krebs Biochemicals & Industries Ltd.

BSE: 524518 Sector: Health care
NSE: KREBSBIO ISIN Code: INE268B01013
BSE 00:00 | 03 Feb 96.30 -3.10
(-3.12%)
OPEN

101.10

HIGH

101.10

LOW

94.10

NSE 00:00 | 03 Feb 95.20 -3.60
(-3.64%)
OPEN

98.15

HIGH

101.50

LOW

93.60

OPEN 101.10
PREVIOUS CLOSE 99.40
VOLUME 1881
52-Week high 190.00
52-Week low 94.10
P/E
Mkt Cap.(Rs cr) 208
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 101.10
CLOSE 99.40
VOLUME 1881
52-Week high 190.00
52-Week low 94.10
P/E
Mkt Cap.(Rs cr) 208
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Krebs Biochemicals & Industries Ltd. (KREBSBIO) - Auditors Report

Company auditors report

To the members of

M/s. KREBS BIOCHEMICALS & INDUSTRIES LIMITED Report on the Standalone Audit ofFinancial Statements: Opinion

We have audited the accompanying standalone financial statements of M/s. KrebsBiochemicals and Industries Limited ("the Company") which comprise theBalance Sheet as at March 312022 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year ended on that date and a summary of significant accounting policies andother explanatory information (hereinafter referred to as "the standalone financialstatements").

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 except theeffect of matter referred to in Basis for qualified opinion give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended ("IndAS") and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 312022 the profit and total comprehensive incomechanges in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the 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. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Material Uncertainty Relating to Going Concern

We draw your attention to note no. 2.21.2 to the financial statements which statesthat the Company has incurred loss before tax of Rs. 1131.39 lakhs for the quarter ended31st March 2022 and Rs. 4452.68 lakhs for the year ending 31st March 2022. As of 31stMarch 2022 the total liabilities exceeded it's total assets by Rs. 7509.32 lakhs ascompared to Rs. 4273.29 lakhs as at 31st March 2021. These factors indicate that materialuncertainty exists that may cast significant doubt on the Company's ability to continue asgoing concern and therefore the Company may be unable to realise it's assets anddischarge it's liabilities in the normal course of business. The Company's management hascarried out an assessment of the Company's financial performance and has obtained aconfirmation providing comfort of financial support from the Promoter Company if requiredto meet its obligations. There has been continued improvement in production during thecurrent year.

During the FY 2021-22 the Company has prepared strategic plan for next five years.Pursuant to the said plan the Company continues to focus on various initiatives includingcost optimisation through operational efficiency improvement initiatives rationalisationof existing operations and increase in sales volumes from the existing and new customers.With continued efforts the Company expects to address the material uncertainty in future.

Our opinion not modified in respect of this matter.

Key audit matters

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. 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 Evaluation of uncertain tax positions PRINCIPAL AUDIT PROCEDURE
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Obtained details of completed tax assessments and demands for the year ended March 31 2022 from management .Discussed with the management's underlying assumptions in estimating the tax provision and the possible outcome of the disputes. Additionally we considered the effect of new information in respect of uncertain tax positions as at March 31 2022 to evaluate whether any change was required to management's position on these uncertainties.
2 Recoverability of Income Tax Refund Receivable Principal audit procedure
As at March 312022 other non current assets include Income Tax Refund receivable amounting to Rs 240.86 lakhs out of which amount of Rs 201.60 lakhs are pending adjudication. We have verified the relavent documents and records the sustainability and likelihood of recoverability upon final resolution.

The Company's Board of Directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's 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 during the course of our audit or otherwise appears to be materially misstated.

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

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act2013 with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in Indiaincluding The Indian Accounting Standard specified under sec.133 of the act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

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.

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

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

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

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also :

• Identify and assess the risks of material misstatement of the standalonefinancial 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

2. (A) As required by Section 143(3) of the Act based on our audit we report that :

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

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

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

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March312022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312022 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(B) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous :

a) The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements.(Refer Note: 32)

b) The Company did not have any long term contracts including derivate contracts forwhich there were any material foreseeable losses.

c) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

d) i. 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 advanced orloaned 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;

ii. 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;

iii. 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.

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

(C) 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 :

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. The Ministry of CorporateAffairs has not prescribed other details under section 197(16) of the Act which arerequired to be commented upon by us.

For BHAVANI & Co.
Chartered Accountants
Firm Reg. No:012139S
(CA S KAVITHA PADMINI)
PARTNER M.No:229966
UDIN: 22229966AJKTZV9527
Place : Hyderabad
Date : 23-05-2022

With reference to Annexure A referred to in paragraph 1 in Report on Other Legal &Regulatory Requirement of our report of even date to the financial statements of theCompany for the year ended March 31 2022 we report that:

i. In respect of the Company's Property Plant and Equipment and Intangible Assets:

(a) (A) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

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

(b) The Company has a program of physical verification of Property Plant and Equipmentto cover all the assets once every three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain Property Plant and Equipment were due for verification during the year and werephysically verified by the Management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification

(c) Based on our examination of the property tax receipts and lease agreement for landon which building is constructed registered sale deed / transfer deed / conveyance deedprovided to us we report that the title in respect of self-constructed buildings andtitle deeds of all other immovable properties (other than properties where the company isthe lessee and the lease agreements are duly executed in favour of the lessee) disclosedin the financial statements included under Property Plant and Equipment are held in thename of the Company as at the balance sheet date.

(d) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the Company has not revalued any of itsProperty Plant and Equipment or intangible assets or both during the year.

(e) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company no proceedings have been initiated during theyear or are pending against the Company as at March 31 2022 for holding any benamiproperty under the Benami Transactions (Prohibition) Act 1988 (as amended in 2016) andrules made thereunder.

ii. (a) The management has conducted the physical verification of inventory atreasonable intervals. In our opinion the frequency of such verification is reasonableand procedures and coverage as followed by management were appropriate. No discrepancieswere noticed on verification between the physical stocks and book records that were morethan 10% in the aggregate of each class of inventory

(b) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company during the year the company has beensanctioned working capital limits in excess of five crore rupees in aggregate from banksor financial institutions on the basis of security of current assets; the quarterlyreturns or statements filed by the company with such banks or financial institutions arein agreement with the books of account of the Company.

iii. According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the Company has not made any investmentsprovided guarantee or security or granted any loans or advances secured or unsecured tocompanies firms Limited Liability partnerships or other parties covered in the Registermaintained under Section 189 of the Act. Accordingly paragraph 3 (iii) (a) to (f) of theOrder are not applicable.

iv. According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the Company has neither made any investmentsnor has it given loans or provided guarantee or security and therefore the relevantprovisions of Section 185 and 186 of the Companies Act 2013 are not applicable to theCompany. Accordingly clause 3(iv) of the Order is not applicable.

v. The Company has not accepted any deposits or amounts which are deemed to be depositsfrom the public.

Accordingly Clause 3(v) of the Order is not appliable.

vi. As informed to us the maintenance of Cost Records has been specified by theCentral Government under subsection (1) of Section 148 of the Act in respect of theactivities carried on by the company. We have broadly reviewed the Cost Records maintainedby the Company pursuant to the Company's (Cost Records and Audit) Rules 2014 prescribedby the Central Government and are of the opinion that prima facie the prescribed costrecords have been maintained.

vii. (a) According to the information and explanations given to us and the records ofthe company examined by us the company is regular in depositing undisputed statutory duesincluding Provident fund Employee State Insurance Income tax sales tax customs dutyGoods and Service Tax and any other statutory dues as applicable with appropriateauthorities. There were no arrears of outstanding statutory dues as on last day of thefinancial year concerned for a period of more than six months from the date on which theybecome payable.

(b) According to the information and explanation given to us the following dues of theservice tax customs duty excise duty value added tax GST Central sales tax Cess andother statutory dues which have not been deposited with appropriate authorities on accountof any dispute.

Name of the Statute Nature of Dues Period to which the amount relates Amount (in Rs.) Deposits/paid in (Rs.) Forum where the dispute is pending with
Income Tax Act1961 Income Tax AY 2002-03 (74307) - Hon'ble High Court of Telangana
Income Tax Act1961 Income Tax AY 2003-04 19728131 - Hon'ble High Court of Telangana
Income Tax Act1961 Income Tax AY 2004-05 9674080 - Hon'ble High Court of Telangana
Income Tax Act1961 Income Tax AY 2018-19 611398 - CIT (Appeals)
Customs Act1962 Interest & Penalty (DEEC Licence) FY 2004-05 14458766 3720977 Commissioner (Appeals) Customs
Customs Act1962 Custom duty & Interest (E PCG License) FY 2004-05 425662 7000 Commissioner (Appeals) Customs
Employees provident fund & Miscellaneou s provisions Act1952 Damages FY 2014-15 to FY 15-16 12993000 1750000 Court of Central Government Industrial Tribunal at Hyderabad
Employees State Insurance Act1948 Damages for the period 12/2010 to 11/2018 1829855 Hon'ble court of ESI cum Principal Senior Civil Judge Visakhapatnam
Employees State Insurance Act1948 Interest for the period 12/2010 to 0 4/2011 and 003/2012 to 11/2018 416392 Hon'ble court of ESI cum Principal Senior Civil Judge Visakhapatnam

viii. There were no transactions relating to previously unrecorded income that havebeen surrendered or disclosed as income during the year in the tax assessments under theIncome Tax Act 1961 (43 of 1961)

ix. (a) According to the records of the company examined by us the information andexplanations given to us the company has not defaulted in repayment of loans orborrowings to any financial institutions or banks as on at the balance sheet date.

(b) The Company has not been declared wilful defaulter by any bank or financialinstitution or government or any government authority.

(c) In our opinion and according to the information and explanations given to us by themanagement no term loans were obtained. Accordingly clause 3(ix)(c) is not applicable.

(d) According to the information and explanation given to us and an overall examinationof the balance sheet of the Company we report that no funds raised on short term basishave been used for long term purposes by the Company.

(e) The Company does not hold any investment in any subsidiary associate or jointventure (as defined under Companies Act 2013) during the year ended 31st March 2022.Accordingly clause 3(ix)(e) is not applicable.

(f) According to the information and explanation given to us and procedures performedby us we report that the Company has not raised loans during the year on the pledge ofsecurities held in it's subsidiaries joint ventures and associate companies (as definedunder the Act).

x. (a) The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year and hence reporting under clause3(x)(a) of the Order is not applicable.

(b) the company has made preferential allotment of non-convertible non-cumulativeredeemable Preference Shares during the year and the requirements of section 42 andsection 62 of the Companies Act 2013 have been complied with and the funds raised havebeen used for the purposes for which the funds were obtained.

xi. (a) Based on the examination of the books and records of the Company and accordingto the information and explanation given to us no fraud by the Company and no materialfraud on the Company has been noticed or reported during the year.

(b) No report under sub-section (12) of section 143 of the Companies Act has been filedin Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules 2014with the Central Government during the year and upto the date of this report.

(c) We have taken into consideration the whistle blower complaints received by theCompany during the year (and upto the date of this report) while determining the naturetiming and extent of our audit procedures.

xii. According to the information and explanation given to us the Company is not aNidhi Company and hence reporting under clause (xii) of the Order is not applicable

xiii. According to the information and explanations to us and based on our examinationof the records of the company transactions with the related parties are in compliancewith section 177 and 188 of Companies Act2013 where applicable and the details of suchtransactions have been disclosed in the 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 tothe Company during the year and till date in determining the nature timing and extent ofour audit procedures.

xv. In our opinion during the year the Company has not entered into any non-cashtransactions with its directors or persons connected with its directors. and henceprovisions of section 192 of the Companies Act 2013 are not applicable to the Company

xvi. (a) The Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly clause 3(xvi)(a) of the Order is notapplicable.

(b) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly clause 3(xvi)(b) of the Order is not applicable

(c) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India. Accordingly clause 3(xvi)(c) & 3(xvi)(d) of theOrder is not applicable.

xvii. The Company has incurred cash operating losses of Rs. 1721.61 lakhs during thefinancial year covered by our audit and Rs. 1457.48 lakhs during immediately precedingfinancial year.

xviii. There has been no resignation of the statutory auditors of the Company duringthe year. Accordingly clause 3(xviii) of the Order is not applicable.

xix. We draw attention to Note no. 2.21.2 to the financial statements which indicatesthat the Company has incurred loss before tax of Rs. 4452.68 lakhs as against loss beforetax of Rs. 2835.86 lakhs during previous year ended 31st March 2021. Company's Networthis fully eroded and that the Current liabilities exceeds it's current assets by Rs.4257.07 lakhs. On the basis of the above and according to the information andexplanations given to us and on the basis of financial ratios ageing and expected datesof realisation of financial assets and payment of financial liabilities other informationaccompanying the financial statements our knowledge of the Board of directors andmanagement plans and based on our examination of the evidence supporting the assumptionsthe aforesaid events or conditions indicate that a material uncertainty exists as on thedate of the audit report regarding whether the Company is capable of meeting it'sliabilities existing at the date of balance sheet as and when they fall due with in aperiod of one year from the balance sheet date. However M/s Ipca Laboratories Ltd.(Promoter Company) is providing comfort of financial support as and when required tomeet the Company's obligations.

xx. In our opinion and according to the information and explanation given to us thereis no unspent amount under sub-section (5) of Section 135 of the Companies Act 2013pursuant to any project. Accordingly clause 3(xx)(a) and 3(xx)(b) of the Order are notapplicable.

(Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Krebs Biochemicals and IndustriesLimited of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

Opinion

We have audited the internal financial controls over financial reporting of M/s.Krebs Biochemicals and Industries Limited

("the Company") as of March 312022 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 st March 2022 based on the internal financial controlswith reference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial reporting issued by the Institute of CharteredAccountants of India (the Guidance Note).

Management’s Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").

Auditor’s Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial control system overfinancial reporting of the Company.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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.

Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

For BHAVANI & Co.
Chartered Accountants
Firm Reg. No:012139S
Place : Hyderabad (CA S KAVITHA PADMINI)
Date : 23-05-2022 PARTNER M.No:229966
UDIN: 22229966AJKTZV9527

.