Punjab Communications Limited
Report on the Audit of the Standalone Financial Statements
We have audited the Standalone Financial Statements of Punjab Communications Limited("the Company") which comprise the Balance Sheet as at 31st March 2022 theStatement of Profit and Loss (including other comprehensive income) the Statement ofChanges in Equity and statement of Cash Flows for the year then ended and Notes to theStandalone financial statements including a summary of significant accounting policiesand other explanatory information
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2022 and its loss totalcomprehensive income and changes in equity and its cash flows for the year ended on thatdate.
Basis for opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thosestandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our Report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of theStandalone financial statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of Ind AS Standalone financial statements of the current period.These matters were addressed in the context of our audit of Ind AS Standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
We would like to draw the attention to the following matter:
The Company had invested a sum of Rs. 698.74 Lacs (Face Value Rs.700 Lacs) net ofcommission amounting to Rs.1.26 lacs in the Bonds of UP Co-operative Spinning MillsFederation Ltd. (UPCSMFL) for a tenure of 18 months which was duly guaranteed by theUP-State Government. The Company approached UPCSMFL for the redemption of bonds on the duedate i.e. 20th December 1999. Upon failure of UPCSMFL to redeem the bonds onthe due date the Company invoked the aforesaid Government Guarantee through a suit filedon 28" November 2001 at Lower Court Chandigarh against UPCSMFL & UP State Govt.for recovery of the aforesaid amount and the Hon'ble Lower Court passed a decree in favorof the Company vide its order dated 30thJanuary 2004.
UP State through Special Secretary filed an application under Order 9 Rule 13 forsetting aside the above said Decree being exparte on 2ndSeptember 2004 and alsoapplied for a stay of execution at the Lower Court Chandigarh. Stay application of UPState was dismissed on 13thSeptember 2004 and the application under 9/13 waskept pending.
UP State Govt filed the Revision Petition against the order of dismissal of stay bythe lower court at Hon'ble Punjab & Haryana High Court Chandigarh. In order to admittheir Revision Petition the Court ordered UP State Govt. to deposit a sum of Rs.735.63lacs (50% of the Decretal amount). The aforesaid sum of Rs.735.63 lacs was released to theCompany against furnishing of Bank Guarantee of equivalent amount on 22nd April2006.
On 12thMarch 2010 the application filed by UP State under Order 9 Rule 13was dismissed by the Lower Court Chandigarh. UP State filed an appeal in the Court of Add.Dist. Judge Chandigarh and got the stay on 21stJ u ly 2010. The application ofUP State for Stay got dismissed on 10th November 2012.
UP State filed Civil Revision against the order of Distt. Judge Chandigarh at Punjaband Haryana High Court Chandigarh. The Civil Revision filed by UP State was dismissed bythe Hon'ble Punjab and Haryana High Court on 20thSeptember 2013.
UP State Govt. filed an appeal against the aforesaid order of the Hon'ble Punjab &Haryana High Court with the Hon'ble Supreme Court through SLP. The Hon'ble Supreme Courtvide its order dated 19th January 2015 directed the company to refund theaforesaid sum of Rs 735.63 Lacs to the UP-State Government. In compliance with theaforesaid orders of the Hon'ble Supreme Court the company refunded Rs.735.63 Lacs byallowing the Hon'ble Court to invoke the Bank Guarantee of the equivalent amount submittedto the court earlier.
In view of the aforesaid order passed by the Hon'ble Supreme Court maintaining that theUP State was not a party defended before the trial court the company was constrained tofile a fresh civil suit against the state of U.P at District Court Chandigarh on 11thMarch2016 for recovery of Rs 684031048/- in order to preserve its right of huge claim. Lateron after the aforesaid invocation of the Bank guarantee of Rs 73563325/-the companyfiled a revised claim on 30thOctober 2018 to the tune of Rs.757594373/-(Rs684031046/- plus Rs73563325/-) which is pending.
UPCSMFL is presently under liquidation and the company has filed its claim with theOfficial Liquidator on 23rdMay 2016 at Kanpur later on account of invocationof Bank Guarantee a revised claim was filed on 26"September 2018 to the tune of Rs.1107501023/- with interest as on 28thAugust 2018 in order to maintain itsvaluable rights in the future. The revised claim was sent through the authorizedrepresentative of the company and was duly acknowledged by the officials of UPCSMFL. Itwas also sent through the Registered Post which has not been received back thus dulyserved.
In the light of the aforesaid orders of the Hon'ble Supreme Court the decree is notmaintainable against the State of U.P therefore the Company filed a fresh executionapplication against the principal debtor i.e UPCSMFL at the Hon'ble Lucknow Court on 30thJanuary2016 (as the Decree was issued against both the parties viz. UPCSMFL and the State of UP)
Meanwhile the Board of Directors of the company discussed that pursuant to SupremeCourt Order the litigation in this case is a prolonged one and it was decided thatbesides the ongoing litigation which the company may carry on efforts need to be made tosettle this case out of the Court at Government Level. Accordingly DO Letters were sentto the Chief Secretary of State of Uttar Pradesh and to the Secretary InterState Council.After a few correspondences through DO Letters at Chief Secretary Level and at Inter-StateCouncil Level the company received communication from UPCSMFL and after necessaryformalities a meeting was conducted between Chairman and MD PUNCOM with the AdditionalChief Secretary State of Uttar Pradesh and the MD UPCSMFL through Video Conferencing as aresult of which the State of Uttar Pradesh offered a One Time Settlement Scheme (OTS)whereby they offered an interest @ 4.50% along with the Principal of Rs. 7 Crore. The saidproposal of OTS offered by the State of Uttar Pradesh was placed in the Board Meeting ofthe company held on 12th November 2021 whereby it was suggested that an effort may bemade to improve the offer by requesting UPCSMFL to give a rate equivalent to borrowings ofthe company which is in the range of 6% to 7%. Accordingly a Counter Offer has been sentto the State of Uttar Pradesh as well as to the MD UPCSMFL and as informed the reply isawaited as on the date of the report.
The company has reflected the value of the investment in bonds at cost. Further theprincipal amount of the bond is fully guaranteed by the UP-State Government but due tothe protracted litigation the time of recovery is indeterminable. (Also refer to note 5and 42(a) of the Balance Sheet for the FY 20-21.
Emphasis of Matters
We would like to draw the attention to the following matters:
1. Accounting Policy 1(b): Regarding certain items of income and expenditurewhich have been accounted for as and when these are incurred ascertained or settled.During the year under audit no entries deviating from the accrual basis of accountingwere noticed.
2. As per the information and explanations given to us the company has been selectedfor disinvestment by the Cabinet Committee on Disinvestment Government of Punjab. Duringthe FY 2019-20 the Directorate of Public Enterprises and Disinvestment Government ofPunjab had appointed M/s Resurgent India Limited Gurgaon (Haryana) as Transaction Advisorfor Puncom Disinvestment. During the financial year 2020-21 the Government of Punjab hasclosed the submission of "Expression of interest" (EOI) by eligible bidders on 1stFebruary 2021. Further as part of the disinvestment the company was in the process ofDue Diligence activity. For this purpose DPED has approved the site visit from the period21/06/2021 onwards till 12/07/2021 i.e. within a three-week period to carry out the duediligence. Accordingly due diligence was conducted during this given period. As informedSubsequent to the site visit certain queries were raised to Puncom which have beenaddressed. Thereafter certain queries have been raised with the Director Industries andCommerce which are being replied to as informed.
3. Receivable & payable are shown in the balance sheet which significantly consistsof Trade receivable and trade payable which are subject to confirmation. (Refer to noteno. 9 & 21 of notes to accounts of Standalone financial statements)
Our opinion is not modified on the matters mentioned in Key Audit Matters and in items(1) to (3) in Emphasis of Matters hereinabove.
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 Act with respect to the preparation of these Standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for the safeguarding of 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 statement that gives a true and fair view and is free from materialmisstatement whether due 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 operation or has norealistic alternative but to do so.
The management and Board of Directors are also responsible for overseeing the company'sfinancial reporting process.
Auditor's Responsibility 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 control 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 an 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 the 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 make it probable that the economic decisions of areasonably knowledgeable user of the Standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Standalone financial statements.
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 expecte3d 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 of India in terms of sub-section (11) of section 143 ofthe Act we give in the 'Annexure A' a statement on the matters specified in paragraph 3and 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 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) In terms of GSR 463 dated 05th June 2015 issued by MCA the provisions of section164(2) of Companies Act 2013 regarding the disqualifications of Directors do not apply toGovernment Company. Hence the same is not applicable.
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".
g) 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 we report thatsection 197 does not apply to the Government companies. Hence the same is not applicable.
h) 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:
i. The Company has disclosed the impact of pending litigations on its financialposition in its notes to Standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any foreseeable losses.
iii. The company is not required to transfer any amount to the Investor Education andProtection Fund.
| ||FOR RAJ GUPTA & CO. |
| ||Chartered Accountants |
| ||FRN:000203N |
| ||CA Sandeep Gupta |
|Place: Chandigarh ||(Partner) |
|Dated:25th May2022 ||M.No.-529774 |
| ||UDIN: 22529774AJ NXYG4843 |
"ANNEXURE - A" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under "Report on Other Legal RegulatoryRequirements" section of our report of even date)
i. In respect of the Company's Property Plant and Equipment:
(a) (A) The company has maintained proper records showing full particulars includingquantitative details and the situation of Property Plant and Equipment;
(B) The company has maintained proper records showing full particulars of IntangibleAssets;
(b) The company has a regular system of verification of Property Plant and Equipmentat the end of each year which in our opinion is reasonable having regard to the size ofthe company and the nature of its assets. Pursuant to the system Property Plant &Equipment were verified by the company and no material discrepancies were noticed on suchverification;
(c) As per our examination the title deeds of all immovable properties of the companyare held in the name of the company.
(d) The company has not revalued any of its Property Plant & Equipment andIntangible Assets during the year;
(e) As per the information and explanations provided to us no proceedings have beeninitiated during the year or are pending against the Company as at March 31 2022 forholding any Benami property under the Benami Transactions (Prohibition) Act 1988 (asamended in 2016) and rules made there under.
ii. In our opinion and according to the information and explanations provided to us:
(a) The company has a regular system of verification of the inventory at the end of theyear and we are of the opinion that the coverage and procedure of such verification areappropriate having regard to the size of the company. Also no material discrepancies werenoticed in such verification.
(b) During the year the company has been sanctioned working capital limits from banksagainst a 100% margin in excess of five crore rupees on basis of the security of FixedDeposits (FDRs). Also as explained the company was not required to file any quarterlyreturns or statements with such banks.
iii. According to the information and explanations are given to us during the year thecompany has not made any investments in provided any guarantee or security or grantedany loans or advances in the nature of loans secured or unsecured to companies firmsLLPs or any other parties. Hence reporting under clause 3(iii) of the Order is notapplicable.
iv. In our opinion and according to the information and explanations given to us thecompany has not granted any loans given guarantees and securities or made investments tothe parties covered under the provisions of sections 185 and 186 of the Companies Act2013. Hence reporting under clause 3(iv) of the Order is not applicable.
v. According to the information and explanations given to us we are of the opinionthat the company has not accepted any deposit or amounts which are deemed to be depositedin pursuance of sections 73 to 76 or any other relevant provisions of the Companies Actand the rules framed there under.
vi. The company was not required to maintain cost records as per the provisions ofSection 148(1). Accordingly this clause is not applicable.
vii. According to the information and explanations given to us books and records asproduced and examined by us in respect of statutory dues:
(a) The company has generally been regular in depositing undisputed statutory duesincluding Goods and Services Tax Provident Fund Employees' State Insurance Income-taxSales Tax Service Tax the duty of Customs duty of Excise Value Added Tax Cess and anyother statutory dues with the appropriate authorities.
Further we report that no undisputed amount payable with respect to such statutorydues was outstanding as at March 31 2022 for a period of more than six months from thedate they became payable.
(b) Details of statutory dues referred to in sub-clause (a) above which have not beendeposited as on March 31 2022 on account of disputes are given below:
|Sr.No Particulars ||Tentative Amount involved ||Matter / Cases pending since ||Forum where the dispute is pending ||Current Status / Reason for pendency |
|1. Sales Tax Demand ||Rs.14.85 Lacs ||FY 2011-12 ||Sales tax Appellate Tribunal Andhra Pradesh. ||Appeal against the Sales Tax Demand for FY 2004-05 was admitted. Matter not listed for hearing yet. |
|2. Custom demand ||Rs. 60 Lacs ||FY 2012-13 ||Appeal filed before Custom Excise & Service Tax Appellate Tribunal ||Appeal against penalty admitted and stay against recovery is granted. Matter not listed thereafter. |
viii. In our opinion and according to the information and explanations given to usthere were no transactions relating to previously unrecorded income that have beensurrendered or disclosed as income during the year in the tax assessments under the IncomeTax Act 1961 (43 of 1961).
ix. In our opinion and according to the information and explanations are given to us:
(a) The Company has not taken any loans or other borrowings from any lender. Hencereporting under clause 3(ix)(a) of the Order is not applicable.
(b) The company has not been declared a willful defaulter by any bank or financialinstitution or any other lender;
(c) The Company has not taken any term loans during the year and there are nooutstanding term loans at the beginning of the year. Hence reporting under clause3(ix)(c) of the Order is not applicable.
(d) During the year the company has not taken any funds on a short-term basis.Accordingly this clause is not applicable;
(e) The company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiary;
(f) The Company has not raised any loans on the pledge of securities held in itssubsidiary during the year and hence reporting on clause 3(ix)(f) of the Order is notapplicable;
x. In our opinion and according to the information and explanations given to us:
(a) The Company has not raised moneys by way of an 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) During the year the Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully or partly or optionally) and hencereporting under clause 3(x)(b) of the Order is not applicable;
xi. In our opinion and according to the information and explanations given to us:
(a) No fraud by or on the company has been noticed or reported during the course of ouraudit;
(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 up to the date of this report;
(c) During the year no whistleblower complaints have been received by the company.
xii. The company is a manufacturing company and not a Nidhi Company. Accordingly thisclause does not apply to the Company.
xiii. In our opinion all transactions with the related parties are in compliance withsections 177 and 188 of the Act where applicable and the requisite details have beendisclosed in the Standalone financial statement etc. as required by the applicableIndian Accounting Standards.
xiv. In our opinion and according to the information and explanations given to us:
(a) The company has an internal audit system commensurate with the size and nature ofits business.
(b) The reports of the Internal Auditor for the period under audit have been consideredby us.
xv. In our opinion the company has not entered into any non-cash transactions with itsdirectors or with persons connected with him. Hence provisions of section 192 of theCompanies Act 2013 do not apply to the Company.
XVI. In our opinion:
(a) 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.
(b) There is no core investment company within the Group (as defined in the CoreInvestment Companies (Reserve Bank) Directions 2016) and accordingly reporting underclause 3(xvi)(d) of the Order is not applicable.
xvii. The company has incurred cash losses during the current financial year 2021-2022amounting to Rs. 12.93 crores and in the preceding financial year 2020-2021 amounting toRs. 11.55 crores.
xviii. There has been no resignation of the statutory auditor of the company during theyear.
xix. In our opinion and according to the information and explanations given to us andon the basis of the financial ratios ageing and expected dates of realization offinancial assets and payment of financial liabilities and other information accompanyingthe Standalone financial statements we are of the opinion that no material uncertaintyexists as on the date of the audit report indicating that company is not capable ofmeeting its liabilities existing at the date of the balance sheet as and when they falldue within a period of one year from the balance sheet date. We however state that thisis not an assurance as to the future viability of the Company. We further state that ourreporting is based on the facts up to the date of the audit report and we neither give anyguarantee nor any assurance that all liabilities falling due within a period of one yearfrom the balance sheet date will get discharged by the Company as and when they fall due.
xx. In our opinion and according to the information and explanations given to us thecompany does not meet the criteria for the applicability of Section 135 of the CompaniesAct 2013. Accordingly reporting under this clause is not applicable.
xxi. In our opinion and according to the information and explanations given to us thecompany has a fully owned subsidiary company (Punjab Digital Industrial Systems Ltd.)which has been ordered to be wound up by the order of Hon'ble Punjab & Haryana HighCourt vide order dated 20/02/2009 Due to which the financial statements of PDISL are notbeing prepared so we are unable to give our opinion on the same.
| ||FOR RAJ GUPTA & CO. |
| ||Chartered Accountants |
| ||FRN:000203N |
| ||CA Sandeep Gupta |
|Place: Chandigarh ||(Partner) |
|Dated: 25th May 2022 ||M.No.-529774 |
| ||UDIN: 22529774AJNXYG4843 |
"ANNEXURE -B" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of PunjabCommunications Limited ("the Company") as of 31stMarch 2022 inconjunction with our audit of the Standalone financial statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI').These responsibilitiesinclude the design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the orderly and efficient conduct ofits business including adherence to the company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be 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 were established and maintained and if such controls operatedeffectively 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 Standalone financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of lnternal 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 Standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitthe preparation of Standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with the authorizations of management and directors of the company; and
(3) provides reasonable assurance regarding the prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the Standalone financial statements.
Inherent 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.
In our opinion to the best of our knowledge and according to the explanation given tous the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31" March 2022 based on the internalcontrol over financial reporting 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.
| ||FOR RAJ GUPTA & CO. |
| ||Chartered Accountants |
| ||FRN:000203N |
| ||CA Sandeep Gupta |
|Place: Chandigarh ||(Partner) |
|Dated: 25th May 2022 ||M.No.-529774 |
| ||UDIN: 22529774AJNXYG4843 |