You are here » Home » Companies » Company Overview » Power Mech Projects Ltd

Power Mech Projects Ltd.

BSE: 539302 Sector: Engineering
NSE: POWERMECH ISIN Code: INE211R01019
BSE 00:00 | 09 Dec 2303.65 -70.85
(-2.98%)
OPEN

2381.80

HIGH

2400.55

LOW

2200.10

NSE 00:00 | 09 Dec 2314.70 -56.70
(-2.39%)
OPEN

2375.00

HIGH

2404.45

LOW

2200.20

OPEN 2381.80
PREVIOUS CLOSE 2374.50
VOLUME 8869
52-Week high 2410.00
52-Week low 805.15
P/E 20.79
Mkt Cap.(Rs cr) 3,435
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2381.80
CLOSE 2374.50
VOLUME 8869
52-Week high 2410.00
52-Week low 805.15
P/E 20.79
Mkt Cap.(Rs cr) 3,435
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Power Mech Projects Ltd. (POWERMECH) - Auditors Report

Company auditors report

To the Members of

POWER MECH PROJECTS LIMITED

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying Standalone financial statements ofPOWER MECH PROJECTS LIMITED ("the Company") which comprise the Balance Sheet asat 31st March 2022 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 the significant accounting policies andother explanatory information (hereinafter referred to as "the financialstatements").

In our opinion and to the best of our information and according to theexplanations given to us the accompanying Standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the State of affairs of the Company as at 31stMarch 2022 the Profit and total comprehensive Income changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the Standalone financial statements under the provisions of theAct and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the Standalonefinancial 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.

Sl No Key Audit matter How the matter was addressed in our audit
1 Revenue recognition of long term contracts As part of our audit we obtained an understanding of the methodology applied the internal process and controls used for determination of the physical proportion of work completed. We evaluated the process and systems used to record the quantum of work completed against which invoices were raised.
The Company has revenue from construction contracts and long term operating and maintenance agreements. In respect of construction projects we obtained work completion certificates measurement work sheets from project engineers and also obtained certificate of confirmations of work completed from customers to assess the appropriateness of management estimates of the physical proportion of work completed.
Revenue related to these construction contracts is recognised using the percentage completion method where progress is determined with reference to completion of physical proportion of the work to the extent of work certified by the customer and revenue is also recognised in case of works pending certification as on date of balance sheet. The Company raised invoices on monthly basis based on the physical proportion of the work completed. Further we also examined the payment advices received subsequent to the balance sheet date which confirms the extent of work completed and certified for which revenue was recognised.
We focussed this area because of significant management judgement required in: In case of those works which were pending certification as on date of balance sheet we obtained payment advices from the customers related to the said works post balance sheet date.
Estimation of the physical proportion of the contract work completed for the contracts and particularly in case of those works which were pending for certification by the customer as on date of balance sheet which may lead to over or understatement of revenues and profit.
2 Trade receivables
The Company has significant amount of trade Our audit procedures in relation to the recoverability of trade receivables included
receivables (Including retention and security deposits) and their recoverability requires management judgement due to the specific risks associated with these receivables. • Understood and tested the Company's credit control procedures and tested key controls over granting credit to customers.
There is an element of management judgement in assessment of extent of the recoverability of long outstanding trade receivables after the end of the contractual credit period. • Tested ageing of trade receivables at the year ended on a sample basis.
Management assessed the recoverability of trade receivables by reviewing customers ageing profile credit history nature and ownership of organisation and status of subsequent settlements and determined whether an impairment provision is required. • Obtained list of long outstanding receivables and identified any debtors with financial difficulty through discussion with management.
We considered this matter to be significant to our audit due to the quantum of the receivables and their period of outstanding. • Assessed the recoverability of these outstanding receivables through our discussion with management and with reference to detailed receivables listings for the subsequent period. • Also examined the arrangements/correspondences with customers to assess the payment arrangement agreed with the customers and assessed the recoverability of the significant outstanding receivables.
• Assessed the recoverability of the balances by comparing the outstanding amounts as at year end against subsequent recoveries.
• The status and their organisational structure was also examined with reference to the credit risk and their creditability in making payments since most of the customers are public sector organisations. Considering all these we found that the judgment made by the management in assessment of recoverability of receivables are found to be appropriate.

Information Other than the Standalone Financial Statements andAuditor's Report thereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the Standalone financial statements and our auditor's report thereonwhich are expected to be made available to us at a later date.

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 which is not available to us as onthe date of this report. In the absence of the said other information we are unable tocomment upon whether the other information is materially misstated or not.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these Standalone financialstatements 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 India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the Standalone 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.

The Board of Directors are responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether theStandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted 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 financial statements.

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 the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Standalone 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 theStandalone financial statements including the disclosures and whether the Standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the Standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the Standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the Standalone financialstatements.

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 precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit wereport 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 ouraudit.

b) In our opinion proper books of accounts as required by law havebeen kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid Standalone financial statements complywith the Ind AS specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of the written representations received from thedirectors as on 31st March 2022 taken on record by the Board of Directorsnone of the directors is disqualified as on March 31 2022 from being appointed as adirector in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure-B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.

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 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 in its Standalone financial statements.

ii. The Company has made provision as required under the applicablelaw or accounting standards for material

foreseeable losses if any on long-term contracts including derivativecontracts.

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

iv. (a) The Management has represented

that to the best of its knowledge and belief no funds (which arematerial either individually or in the aggregate) have been advanced or loaned or invested(either from borrowed funds or share premium or any other sources or kind of funds) by theCompany to or in any other person or entity including foreign entity("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall whether directly or indirectly lend or invest inother 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 knowledgeand belief no funds (which are material either individually or in the aggregate) havebeen received by the Company from any person or entity including foreign entity("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries;

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

v. No dividend was declared by the company during the financial year2021-22 relating to the final dividend for the previous financial year or interim dividendfor the current financial year.

2. As required by the Companies (Auditor's Report) Order 2022("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure-A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For K.S. Rao & Co
Chartered Accountants
(Firm Registration No. 003109S)
Gopikrishna Chowdary Manchinella
Partner
Place: Hyderabad Membership No. 235528
Date: 21.05.2022 UDIN:22235528AJJJTU2200

ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in paragraph 2 under "Report on otherlegal and regulatory requirements" section of our report to the members of POWER MECHPROJECTS LIMITED ("Company") for the year ended March 31 2022.

We report that:

1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment. Howeverthe Property Plant and Equipment register has not been updated with the location ofassets when there is a change in movement of asset from one location to other. Howeverthe said movement of assets has been noted in the registers maintained by the concerneddepartments.

b) The Company has maintained proper records showing full particularsof intangible assets.

c) The Company has a programme of physical verification to cover allitems of property plant and equipment in a phased manner which in our opinion isreasonable having regard to the size of the Company and nature of its business. Pursuantto the programme some of the property plant and equipment were physically verified bythe management during the year and according to the information and explanations given tous no material discrepancies have been noticed on such verification.

d) 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.

e) The Company has not revalued any of its Property Plant andEquipment and intangible assets during the year.

f) No proceedings have been initiated during the year or are pendingagainst the Company as at 31st March 2022 for holding any benami propertyunder the Benami Transactions (Prohibition) Act 1988 (as amended in 2016) and rules madethereunder.

2. In respect of its inventories:

a) According to the information and explanations furnished to us theCompany has physically verified its inventories of Stores and consumables covering nearly93% value and no material discrepancies were noticed on such verification. In our opinionthe frequency of verification to the extent carried out during the year is reasonable.

b) In respect of statement of current assets as submitted by thecompany to its bankers in respect of working capital loans availed the following materialdiscrepancies were noticed between the amounts disclosed in the returns submitted andbooks of accounts. In our opinion and according to the information and explanations giveto us the quarterly returns and statements comprising stock statements payables andreceivables(including retention and security deposit amounts) filed by the company withthe banks are in agreement with the unaudited books of the company of the respectivequarters and no material discrepancies have been noticed.

3) According to the information and explanations given to us theCompany has made investments in or granted unsecured loans to the companies during theyear. However no guarantees or securities has been provided to any of the companiesfirms LLP or any other parties.

a) The following are the details of aggregate amount of loans grantedduring the year and outstanding as on date of balance sheet with respect to SubsidiariesJoint ventures and associates and other than the said parties.

Particulars Loans granted (In ' Cr)
Aggregate amount of loans provided during the year
- Subsidiaries* 17.00
- Joint Venturers 0.08
- Associates -
- Others -
Balance outstanding as on 31.3.2022
- Subsidiaries 32.83
Particulars Loans granted (In ' Cr)
- Joint Venturers 0.64
- Associates -
- Others -

* including expenses paid on their behalf

b) The loans given by the Company and investments made are prima-facienot prejudicial to the interests of the Company considering the relationship and businessexpedience of the companies.

c) In the absence of terms of schedule of repayment and absence ofpayment of Interest the reporting requirements in terms of clause 3(iii) (c)(d) and (e)of the Order does not apply during the year under report.

d) The loans granted during the year and outstanding as on date ofbalance sheet without specifying terms or period of repayment the aggregate amount of thetotal loans granted and the aggregate amount of loans granted to related parties asdefined u/s 2(76) of the Act is as follows.

(In ' Cr)
Particulars All parties Promoters Related parties
Aggregate amount of loans as on 31.3.2022
- Repayable on demand (A) Nil Nil Nil
- Agreement does not specify any terms or period of repayment (B) 33.47 Nil 33.47
Total (A+B) 33.47 Nil 33.47
% of loans to the total loans 100% Nil 100%

4) 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 theAct with respect to the grant of loans investments made and providing guarantees asapplicable.

5) The Company has not accepted any deposits from the public within themeaning of section 73-76 of the Act and therefore the provisions of clause 3(V) of theOrder are not applicable to the Company.

6) The central government has not prescribed the maintenance of costrecords under section 148(1) of the Act read with Companies (Cost Records and Audit)Rules 2014 and hence the reporting requirements in terms of clause 3(vi) of the Orderdoes not apply.

7) a) According to the information furnished to us the Company madedelays in remittance of its statutory dues such as TDS GST and is regular in depositingthe other statutory dues.

b) There were no undisputed statutory dues in arrears in respect of PFESI Customs duty GST Income-tax and other material statutory dues as at the date of theBalance Sheet under report for a period of more than six months from the date they becamepayable.

c) According to the information and explanations furnished to us thefollowing amounts of Value added tax have been disputed by the Company and hence were notremitted to the authorities concerned at the date of the Balance Sheet under report.

Name of the Statute Nature of Dues Amount In ' Cr (net of amounts paid under protest) Period to which it relates Forum where dispute is pending
Bihar VAT Act VAT 1.26 Cr (net of payment of 0.54 Cr) 2014-15 Joint Commissioner of Commercial taxes Patna

8) There were no transactions relating to previously unrecorded incomethat have been surrendered or disclosed as income during the year in the tax assessmentsunder the Income Tax Act 1961.

9) (a) In our opinion and according to the information and explanationsfurnished to us by the Company there were no defaults in repayment of loans or otherborrowings or in the payment of interest thereon to the lenders.

(b) The Company has not been declared as willful defaulter by any bankor financial institution or government or any government authority.

(c) The term loans obtained by the company from the banks were appliedfor the purpose for which they were obtained.

(d) On an overall examination of the financial statements of theCompany funds raised on short-term basis have prima facie not been used during the yearfor long-term purposes by the Company.

(e) The company has not taken any funds from any entity or person tomeet the obligations of its subsidiaries associates and Joint Ventures and hence thereporting under clause 3(ix)(e) of the Order is not applicable.

(f) The company has not raised any loans on pledge of its securitiesheld in subsidiaries associates and Joint ventures and hence reporting under clause3(ix)(f) of the Order is not applicable.

10. (a) The Company has not raised moneys by way of initial publicoffer or further public offer (including debt instruments) during the year and hencereporting under clause 3(x)(a) of the Order is not applicable.

(b) During the year the Company has not made any preferentialallotment or private placement of shares or convertible debentures (fully or partly oroptionally) and hence reporting under clause 3(x) (b) of the Order is not applicable.

11. (a) No fraud by the Company and no material fraud on the Companyhas been noticed or reported during the year.

(b) No report under sub-section (12) of section 143 of the CompaniesAct has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit andAuditors) Rules 2014 with the Central Government during the year under report.

(c) According to the information and explanations furnished to us bythe company no whistle blower complaints has been received by the Company during theyear.

12. The Company is not a Nidhi Company and hence reporting under clause(xii) of the Order is not applicable.

13. In our opinion the Company is in compliance with Section 177 and188 of the Companies Act 2013 with respect to applicable transactions with the relatedparties and the details of related party transactions have been disclosed in the financialstatements as required by the applicable accounting standards.

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

(b) We have considered the internal audit reports for the year underaudit issued to the Company during the year in determining the nature timing and extentof our audit procedures.

15. In our opinion the Company has not entered into any non-cashtransactions during the year with its Directors or persons connected with its directorsand hence provisions of section 192 of the Companies Act 2013 are not applicable to theCompany.

16. (a) In our opinion the Company is not required to

be registered under section 45-IA of the Reserve Bank of India Act1934. Hence reporting under clause 3(xvi)(a) (b) and (c) of the Order is not applicable.

(b) In our opinion there is no core investment company within theGroup (as defined in the Core Investment Companies (Reserve Bank) Directions 2016) andaccordingly reporting under clause 3(xvi)(d) of the Order is not applicable.

17. The Company has not incurred cash losses during the financial yearcovered by our audit but incurred in the immediately preceding financial year.

18. There has been no resignation of the statutory auditors of theCompany during the year.

19. On the basis of the financial ratios ageing and expected dates ofrealization of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report indicating that Company is notcapable of meeting its liabilities existing at the date of balance sheet as and when theyfall due within a period of one year from the balance sheet date. We however state thatthis is not an assurance as to the future viability of the Company. We further state thatour reporting is based on the facts up to the date of the audit report and we neither giveany guarantee nor any assurance that all liabilities falling due within a period of oneyear from the balance sheet date will get discharged by the Company as and when they falldue.

20. (a) There are no unspent amounts towards Corporate SocialResponsibility (CSR) on other than ongoing projects requiring a transfer to a Fundspecified in Schedule VII to the Companies Act in compliance with second proviso tosub-section (5) of Section

135 of the said Act. Accordingly reporting under clause 3(xx)(a) ofthe Order is not applicable for the year.

(b) The company is not carrying on any CSR activities towards ongoingprojects and hence the reporting under clause (3)(xx)(b) of the order is not applicablefor the year under report.

For K.S. Rao & Co
Chartered Accountants
(Firm Registration No. 003109S)
Gopikrishna Chowdary Manchinella
Partner
Place: Hyderabad Membership No. 235528
Date: 21.05.2022 UDIN:22235528AJJJTU2200

Annexure "B" to the Independent Auditors' Report

Report on the Internal Financial Controls over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of POWER MECH PROJECTS LIMITED ("the Company") as of 31stMarch 2022 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of directors of the Company is responsible for establishingand maintaining 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 and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its 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 Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") issued by ICAI and the Standards onAuditing prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A Company's internal financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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.

Limitations of Internal Financial Controls Over Financial Reporting

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 to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2022based on 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.S. Rao & Co
Chartered Accountants
(Firm Registration No. 003109S)
Gopikrishna Chowdary Manchinella
Partner
Place : Hyderabad Membership No. 235528
Date : 21. 05.2022 UDIN: 22235528AJJJTU2200

.