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PVP Ventures Ltd.

BSE: 517556 Sector: Infrastructure
NSE: PVP ISIN Code: INE362A01016
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OPEN 5.10
CLOSE 5.03
VOLUME 4574
52-Week high 10.05
52-Week low 4.18
P/E
Mkt Cap.(Rs cr) 129
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

PVP Ventures Ltd. (PVP) - Auditors Report

Company auditors report

To the Members of PVP Ventures Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the standalone financial statements of PVP Ventures Limited ("theCompany") which comprise the Balance Sheet as at 31st March 2021 and the Statementof Profit and Loss (including Other Comprehensive Income) the Statement of Cash Flows andthe Statement of Changes in Equity for the year then ended and notes to the financialstatements including a summary of the significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effect of the matter described in Basis of QualifiedOpinion paragraph below the aforesaid 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 accounting principlesgenerally accepted in India including Indian Accounting Standards ('Ind AS') specifiedunder section 133 of the Act of the state of affairs of the Company as at 31st March2021 and its loss including other comprehensive income its changes in equity and cashflows for the year ended on that date.

Basis for Qualified Opinion

1. Attention is invited to note no. 34 of standalone financial statements in relationto investment in equity shares including deemed investment in three subsidiaries. Thecarrying value is Rs. 58098.85 lakhs. This is after provision of Rs. 35160.16 lakhs fordiminution in value. The Board is of the view that considering the market value of theassets and expected cash flows in future from the business of these subsidiary companiesthe provision for diminution already made is adequate. However considering erosion in thenet worth of the subsidiary companies and their dependence on the holding company tocontinue as a going concern absence of cash inflow delay in commencement of projects andother related factors indicate the existence of material uncertainty in the ability of thecompany to make progress.

Therefore we are of the view that the carrying amounts of the investments (includingdeemed investment) shall be restated for their realisability by making additionalprovision taking cognizance of erosion in the net worth of the investee/loanee companiesand also taking into consideration their inability to continue as a going concern.However it is difficult to measure the extent of further diminution and fair value. Theprovision short made on this score is also not ascertainable.

2. The Company has mortgaged its land situated at Perambur Chennai as a security andalso furnished corporate guarantee to a bank for the borrowings made by PVP CapitalLimited Chennai (i.e. wholly owned step-down subsidiary company) amounting to Rs. 10000lakhs. The outstanding amount as per the books of accounts as on March 31 2021 includinginterest due is Rs 20012.67 lakhs. The loanee i.e. PVP Capital Limited has not adheredto repayment schedule of principal and interest dues to its bank consequent to which thebank filed for recovery of its dues before the Debt Recovery Tribunal (DRT) and alsoinitiated recovery proceedings against the company under Securitization and Reconstructionof Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI Act 2002).Further the lender bank has taken possession of mortgaged lands and issued sale noticefor e-auction of the property given by the ultimate holding company as corporateguarantee but there were no bidders. We were informed by the Board that the subsidiaryviz. PVP Capital Limited is in negotiation with the said bank for one time settlement(OTS). The Board of PVP Ventures Ltd also asserts that no provision is required to be madeto the carrying value as it is confident that the payment obligation by the PVP CapitalLimited will be met in due course. But in our view the carrying value of the relevantmortgaged assets is dependent on the repayment of the loan by the PVP Capital Limited.Under these circumstances we are unable to express our view whether the company isjustified in carrying the assets that have been mortgaged where the loanee has alreadydefaulted and similarly whether the company is justified in not taking cognizance offinancial obligation that may devolve on the company in case the corporate guarantee isinvoked. Accordingly the company should have considered carrying value of the said assetand/ or guarantee furnished as an obligation as per Ind AS 109 while preparing thefinancial statements.

On the basis of above facts the loss for the year ended March 31 2021 is understatedto this extent. However it is difficult to measure the extent of understatement of lossin the circumstances obtaining. (Refer Note No. 46(ii)(a))

In addition to the above we invite attention to point no. (f) under report on otherLegal and Regulatory requirements

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 theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our Qualified Opinion.

Material uncertainty related to Going Concern

Attention is invited to note no.32 & 33 to the standalone financial statementswhich indicates that the company's current liabilities exceeded its current assets and thecompany was unable to honour its obligation towards repayment of principal and interest toits debenture holders and non- current investments are to be impaired significantly.Further the impact of outbreak of Coronavirus (COVID -19) on the business operationsespecially considering the prevalent situation in real estate sector in which the companyhas significant exposure and along with the other matters as stated in said noteindicates that there exists a material uncertainty that may cast doubt on the company'sability to continue as a going concern.

Our audit opinion is 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. In addition to the matter described in the Basis forQualified Opinion section we have determined the matters described below to be the keyaudit matters to be communicated in our Report.

Contingent Liabilities in relation to Tax Litigations and Other Statutory Litigations

Key Audit Matter Auditor's Response
The Company has received demand relating to direct tax matters pertaining to various assessment years from Income Tax Department. The company is contesting these demands (refer note no. 39 to the standalone financial statements). Our audit procedures included the following:
There is high level of judgment required in estimating the level of provisioning. The management's assessment is supported by the facts of matter their own judgment and advices from legal and independent consultants wherever considered necessary. Accordingly unexpected adverse outcomes may significantly impact the management's reported loss and the Balance Sheet. • Understanding the current status of the litigations/ tax assessments and demands from the Income Tax department.
We determined the above area as a Key Audit Matter in view of associated uncertainty relating to the outcome of these matters which requires application of judgment in interpretation of law. Accordingly our audit was focused on analysing the facts of subject matter under consideration and judgements/interpretation of law involved. • Examining recent orders and/or communication received from the said department and follow up action thereon.
• Evaluating the merit of the subject matter under consideration with reference to the grounds presented therein and available independent legal advice; and
• Review and analysis of evaluation of the contentions of the management through discussions collection of details of the subject matter under consideration the likely outcome and consequent potential outflows on those issues.

As a result of above audit procedures no material difference was noted. We confirm theadequacy of disclosures made in the financial statements.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the management discussion and analysisBoard's Report including annexures to Board's Report and Report on Corporate Governancebut does not include the standalone financial statements and our auditor's report thereon.The above reports are expected to be made available to us after the date of the auditor'sreport.

Our opinion on the standalone financial statements does not cover the other informationand we will 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 identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

When we read the above reports if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Accounting Standards specified under section 133 of theAct read with relevant rules issued thereunder. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; the selection and application of appropriate accounting policies;making judgments and the estimates that are reasonable and prudent; and the designimplementation 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.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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.

Other Matter:

Corresponding figures for the year ended March 31 2020 included in the financialstatements are based on audit by our predecessor who have expressed modified opinion videtheir report dated July 31 2020. We have accepted those figures and reports by verifyingrelevant records of the company for the purpose of our opinion on this statement.

Our conclusion is not modified in respect of the said matter for the purpose of ouropinion on the statement.

Report on Other Legal and Regulatory Requirements

1. As required by 'the Companies (Auditor's Report) Order 2016 ("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" statement on the matters specifiedin the paragraph 3 and 4 of the order.

2. As required by Section 143 (3) of the Act we report that:

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

b) Except for the effects of the matter described in the Basis for Qualified OpinionParagraphs above in our opinion proper books of account as required by law have been keptby the Company so far as appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Cash Flows and the Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account.

d) Except for the effects of the matter described in the Basis for Qualified OpinionParagraphs above in our opinion aforesaid Standalone Financial Statements comply withthe Indian Accounting Standards specified under Section 133 of the Companies Act 2013read with Rule 7 of the Companies (Accounts) Rules 2014.

e) The matter described in the Basis for Qualified Opinion Paragraph above in ouropinion may have an adverse effect on the functioning of the company.

f) Attention is invited to note nos. 31(a) & 31(b) to the standalone financialstatements regarding section 164(2)(b) of the Act which explains the Board's viewregarding defaults committed in redeeming the debentures and repayment of interest as perthe schedule of redemption/payment.

Though the Board has obtained an extension till 30th June 2021 from thedebenture holder vide letter dated 08th February 2021 to pay the outstanding(covering all the defaults happened up to 31st March 2020) and is of theopinion that as extension of time has been obtained from the debenture holder there is nodelay as regards repayment of debenture and interest thereon. However we do not agreewith the Board's view.

g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion Paragraph above.

h) With respect to the adequacy of the Internal financial control over financialreporting of the company and operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

i) In accordance with the requirements of section 197(16) of the Companies Act 2013as amended in our opinion and to the best of our information and according to theexplanations given to us during the year the company has not paid remuneration to thedirectors in accordance with the provisions of section 197 of the Companies Act 2013.Therefore remuneration paid to the directors over and above the limits laid down underthis section doesn't arise.

j) With respect to the other matters to be included Auditor's Report in accordance withRule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the bestof our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements. Refer note no.39 to the StandaloneFinancial Statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses and;

iii. There are no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company; and

iv. The disclosures in the Standalone Ind AS financial statements regarding holdings aswell as dealings in specified bank notes during the period from November 8 2016 toDecember 30 2016 have not been made in these Standalone Ind AS financial statements sincethey do not pertain to the financial year ended March 31 2021.

For Sundaram & Srinivasan
Chartered Accountants
Firm Registration. No.004207S
Sd/-
Venkatasubramanian. S
Partner
Membership Number: 219238
Place: Chennai UDIN: 21219238AAAAEG8316
Date : June 22 2021

Annexure - A to the Independent Auditors' Report

Referred to in Clause 1 of "Report on Other Legal and RegulatoryRequirements" Paragraph of the Independent Auditors' Report of even date themembers of "PVP Ventures Limited" on the Standalone Ind AS FinancialStatements as of and for the year ended 31st March 2021.

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) As explained to us fixed assets have been physically verified by the management atreasonable intervals; no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no immovable properties that are heldin the name of the company other than land held as inventory (see point no. (ii) below).

(ii) In our opinion and according to the information and explanations given to ushaving regard to nature of inventory i.e Land the physical verification of title deedsreconciliations with survey numbers of stock in hand and certification of extent of landsold by competent persons are at reasonable intervals and no material discrepancies werenoticed on physical verification.

(iii) The company has granted unsecured INTEREST FREE advance to four subsidiariescovered in the register-maintained u/s 189 of the Act. The company has treated it asdeemed investment made as prescribed under Ind AS. (Total advance granted and outstandingas at March 31 2021 is Rs. 60093.60 lakhs). The terms of repayment of principal are notstipulated.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans granted investments made guarantees furnished and securities givenwherever applicable.

(v) The Company has not accepted any deposit from the public during the year.Therefore the provisions of clause (v) of the Companies (Auditor's Report) Order 2016are not applicable to the company.

(vi) Maintenance of cost records specified by the Central Government under Sub-Section(1) of Section 148 of the Companies Act 2013 is not applicable to the company.

(vii) (a) According to the records provided to us the company is regular in depositingundisputed statutory dues including Provident

Fund Employees' State Insurance Income Tax (Including Tax Deducted at Source) Dutyof Customs Goods and Services Tax Cess and other statutory dues with the appropriateauthorities wherever applicable.

Undisputed amounts payable in respect thereof which were outstanding at the year- endfor a period of more than six months from the date they became payable are as follows:

Name of the Statue Nature of Dues Amount (Rs. in Lakhs) Period to which the amount relates
The Tamilnadu Urban Land Ceiling and Regulation Act 1978 Urban Land Tax 30.46 June 2017 to September 2020
The Income Tax Act 1961 Income Tax* 213.35 Financial Year 2016-17
The Income Tax Act 1961 Interest on Income Tax 97.07 Financial Year 2016-17

'Amount payable after setting off the TDS receivable and available MAT Credit.

(b) According to the information and explanations given to us the details of dues ofIncome tax which is not deposited on account of any dispute as on 31st March 2021 aregiven below: -

(Rs. in lakhs)
Nature of Statue Nature of Dues Tax Amount Disputed Period to which Amount Relates Forum where dispute is pending
The Income Tax Act 1961 Income Tax 13.24 Assessment Year 2009-10 Income Tax Appellate Tribunal Chennai
The Income Tax Act 1961 Income Tax 493.43 Assessment Year 2013-14 Commissioner of Income-Tax (Appeals) Chennai
The Income Tax Act 1961 Penalty 1276.58 Assessment Year 2008-09 Commissioner of Income-Tax (Appeals) Chennai
The Income Tax Act 1961 Income Tax (Including interest) 48.52 Assessment Year 2016-17 Centralized Processing Centre/Assessing Officer

(viii) According to the records of the company examined by us and the information andexplanation given to us the company has not defaulted in repayment of loans or borrowingsto a financial institution bank and government as on reporting date except to thedebenture holders as follows:

(Rs. in Lakhs)
Name of the Debenture Due Date* Principal Interest Total Amount
NCD Tranche A 30-06-2019 - 18.68 18.68
NCD Tranche A 30-09-2019 213.50 162.82 376.32
NCD Tranche A 31-12-2019 241.25 164.31 405.56
NCD Tranche A 31-03-2020 241.25 155.49 396.74
NCD Tranche A 30-06-2020 241.25 152.15 393.40
NCD Tranche A 30-09-2020 241.25 135.64 376.89
NCD Tranche A 31-12-2020 241.25 126.81 368.06
NCD Tranche A 31-03-2021 241.25 118.53 359.78
NCD Tranche B 30-04-2019 518.13 1108.12 1626.24
NCD Tranche B 31-07-2019 518.13 376.11 894.24
NCD Tranche B 31-10-2019 518.13 376.12 894.25
NCD Tranche B 31-01-2020 518.13 376.11 894.24
NCD Tranche B 30-04-2020 518.13 372.03 890.16
NCD Tranche B 31-07-2020 518.13 376.11 894.24
NCD Tranche B 31-10-2020 518.13 376.11 894.24
NCD Tranche B 31-01-2021 518.13 376.11 894.24
FCD Debenture Holder 15-12-2017 - 517.43 517.43
FCD Debenture Holder 15-06-2018 - 360.51 360.51
FCD Debenture Holder 15-12-2018 - 364.49 364.49
FCD Debenture Holder 15-06-2019 - 360.51 360.51
FCD Debenture Holder 15-12-2019 - 364.49 364.49
FCD Debenture Holder 15-06-2020 - 362.50 362.50
FCD Debenture Holder 31-12-2020 - 364.49 364.49

''Debenture holder vide letter dated 8th February 2021 has granted timetill 30th June 2021 to pay the outstanding amount.

Also refer note no.31 (a) and (b) to the standalone financial statements.

(ix) During the year the company has not raised monies by way of initial public offeror further public offer (including debt instruments). The term loans availed by thecompany have been applied for the purpose for which they were obtained.

(x) According to the information and explanations given to us no fraud by the Companyand no fraud on the Company by its officers or employees has been noticed or reportedduring the course of our audit.

(xi) The company has not paid any managerial remuneration as per section 197 of theCompanies Act 2013. Therefore the provisions of clause 3(xi) of the Companies (Auditor'sReport) Order 2016 are not applicable to the company for the year under audit.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Therefore the provisions of Clause (xii) of Paragraph 3of the Order are not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act wherever applicable and details of suchtransactions have been disclosed in the Standalone Financial Statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Therefore the provisions of Clause (xiv) of Paragraph 3 of the Order are notapplicable.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them covered under section 192 ofthe Companies Act 2013. Therefore the provisions of Clause (xv) of Paragraph 3 of theOrder are not applicable.

(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Therefore the provisions of Clause (xvi) of Paragraph 3 of theCompanies (Auditors Report) Order 2016 are not applicable to the company.

For Sundaram & Srinivasan
Chartered Accountants
Firm Registration. No.004207S
Sd/-
Venkatasubramanian. S
Partner
Place: Chennai Membership Number: 219238
Date : June 22 2021 UDIN: 21219238AAAAEG8316

Annexure B to the Independent Auditor's Report

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 PVPVentures Limited ("the Company") as of 31st March 2021 in conjunction withour audit of the Standalone Financial Statements of the Company for the year ended on thatdate.

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 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.

Auditors' Responsibility

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 both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence 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 judgement 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 qualified 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 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 themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneFinancial Statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the StandaloneFinancial 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.

Qualified Opinion

In our opinion and according to the information and explanations given to us and basedon our audit the following material weaknesses have been identified as at 31st March2021:

a. The company's internal financial controls in respect of supervisory and reviewcontrols over process of determining of (i) carrying value of the company's non currentinvestments in its subsidiaries and (ii) recoverability of loans to its subsidiariesincluded under non-current investments. Absences of aforesaid assessment in accordancewith the accounting principles generally accepted in India could potentially result in amaterial misstatement in the carrying value of investments in such subsidiaries and theaforesaid dues from such subsidiaries and consequently could also impact the profit(financial performance including other comprehensive income) after tax.

b. Assessment of expected cash shortfall and resultant loss allowance that may berequired in respect of invocation of corporate guarantee as well as invocation ofcollateral on land furnished to the lender of a subsidiary where the subsidiary is not ina position to serve the interest and principal.

A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.

In our opinion except for the possible effects of the material weaknesses describedabove on the achievement of the objectives of the control criteria the Company hasmaintained in all material respects adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at 31st March 2021 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note issued by the ICAI.

We have considered the material weaknesses identified and reported in the QualifiedOpinion paragraph in determining the nature timing and extent of audit tests applied inour audit of the financial statements of the company for the year ended 31st March 2021and material weaknesses do not affect our opinion on the financial statements of thecompany.

For Sundaram & Srinivasan
Chartered Accountants
Firm Registration. No.004207S
Sd/-
Venkatasubramanian. S
Partner
Membership Number: 219238
Place: Chennai UDIN: 21219238AAAAEG8316
Date : June 22 2021

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