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Raj Rayon Industries Ltd.

BSE: 530699 Sector: Industrials
NSE: RAJRILTD ISIN Code: INE533D01032
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NSE 05:30 | 01 Jan Raj Rayon Industries Ltd
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OPEN 16.19
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VOLUME 321
52-Week high 16.19
52-Week low 0.21
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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Raj Rayon Industries Ltd. (RAJRILTD) - Auditors Report

Company auditors report

TO THE MEMBERS OF RAJ RAYON INDUSTRIES LIMITED

Qualified Opinion

We have audited the standalone financial statements of Raj RayonIndustries Limited (“the Company”) which comprise the Balance Sheet as at March31 2021 the Statement of Profit and Loss the Statement of Changes in Equity and theStatement of Cash Flows for the year then ended and notes to the financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation. In our opinion and to the best of our information and according to theexplanations given to us except for the possible effect of the matters described in Basisfor Qualified Opinion section of our report the aforesaid standalone financial statementsgive the information required by the Act in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and its loss (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.

Basis of Qualified Opinion:

1. Due to defaults in payments of bank loans the company'saccounts have been classified as Non-Performing Assets (NPA) by the lenders underConsortium advance. The lenders have not charged interest on the company's borrowings/ loan since April 2016. Therefore no provision has been made for such Interest in thebooks of accounts of the company and to that extent finance cost and total loss isunderstated.

2. The Company's account stands exited from CDR Mechanism.Pursuant to provisions of Securitization and Reconstruction of Financial Assets andEnforcement of security Interest act 2002 State Bank of India has taken over thepossession of the properties which is given in the possession notice dated 31stJuly 2018 published in free press journal newspaper. There has been no production activitycarried out since then.

3. We draw attention to the note no. 42 of the attached statementregarding the financial results of the company having been prepared on the going concernbasis which contemplates the realization of assets and satisfaction of liabilities in thenormal course of business. The Company has been continuously incurring losses past manyyears and its net worth stands fully eroded. These conditions indicate the existence ofmaterial uncertainty that cast significant doubt about company's ability to continueas going concern.

4. The properties of the company including plant & machineries hasbeen taken into possession by the State Bank of India on 31st July 2018.Subsequently the possession of the said properties of the company were taken over by theInterim Resolution Professional vide order of Honourable NCLT dated 23rdJanuary 2020. Physical verification of inventories and fixed assets could not be arrangeddue to prevailing COVID-19 pandemic situation. However As informed by the ResolutionProfessional physical verification and valuation of the properties including plant &machineries has been carried out by IBBI registered valuers under the Corporate InsolvencyResolution Process but the valuation report was not shared with us as per the Insolvencyand Bankruptcy Code 2016.

5. The company has obtained unsecured loans amounting to Rs. 1000.00Lakhs the same is outstanding from previous years and has been shown under Long-TermBorrowings in the Balance Sheet. However loan agreement in respect of these loans havenot been furnished and in absence of the same the terms of repayment chargeability ofinterest and other terms are not verifiable.

6. The Company has based on their internal evaluation valuedinventories at Rs. 60.38 Lakhs wherein there is no movement since past one year. In theview of current CIRP and in absence of valuation report we are uncertain on therealisability of the inventories and to that extent total loss is understated.

7. Internal Audit Report is not available since management has notappointed Internal Auditor as required under section 138 of Companies Act 2013.

8. Company Secretary of the Company has resigned from the company dated23rd April 2019 Company has not appointed full time Company Secretary required undersection 203 (and Rule 8 and Rule 8A of companies' appointments & remuneration ofManagerial Personnel Rule 2014) of Companies Act 2013.

9. Balances under sundry debtors and sundry creditors loans andadvances given by the company and parties from whom unsecured loans have been taken aresubject to confirmations and adjustments if any. In the absence of such pendingconfirmations and reconciliations consequential impact of the same on financialstatements of the company could not be ascertained.

10. In view of pending confirmations / reconciliations from bankslender liabilities trade payables and any other liabilities including contingent we areunable to comment on the impact if any on the financial statement arising out of suchpending confirmations / reconciliations. In the absence of such pending confirmations andreconciliations consequential impact of the same on financial statements of the companycannot be ascertained.

We conducted our audit in accordance with the standards on auditingspecified under section 143 (10) of the Companies Act 2013. Our responsibilities underthose Standards are further described in the auditor's responsibilities for the auditof the financial 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 Act and the rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and thecode of ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualified opinion.

Material Uncertainty Related to Going Concern:

We draw attention to the Note No. 42 accompanying the financialstatements regarding preparation of financial statements on going concern basisnotwithstanding the fact that the company continue to incur the cash losses defaulted torepayment of principal and interest to its lenders resulting into impairment fornon-current assets and substantial erosion of its net-worth also its current liabilityexceeds current assets. These conditions coupled with weakened internal controls and othermatters set forth in notes to the financial statements indicate that a materialuncertainty exists that may cast significant doubt on the Company's ability tocontinue as a going concern. The appropriateness of the assumptions of the going concernis critically depended upon the Company's ability to raise finance and generate cashflows in future to meet its obligation and to restructure its borrowing with the lenders.Our opinion is not modified in respect of this matter.

Emphasis of Matter:

1. One operational creditor (Khanna & Khanna Ltd.) has gone intoCorporate Insolvency Resolution Process (CIRP) under the provisions of Insolvency &Bankruptcy Code 2016 (Insolvency Code) in terms of order dated 29th May 2019passed by Hon'ble NCLT Ahmedabad Bench. However the same stands withdrawn dated 28thJune 2019 due to mutual consent. Further the State Bank of India has filed the petitionwith NCLT Ahmedabad under section 7 of the Insolvency and Bankruptcy Code. admitted theCorporate Insolvency Resolution Process (“CIRP”) application filed against RajRayon Industries Limited and appointed Mr. Abhishek Nagori as the Interim ResolutionProfessional (“IRP”) in term of the Insolvency and Bankruptcy Code 2016(“Code”) to manage the affairs of the Company as per the provisions of the Code.

2. The company has not carried out detailed assessment of the usefullife of Company's assets and hence depreciation has not been adjusted as per thenotification to Schedule II of the Companies Act 2013. We are unable to comment on theimpact on statement of Profit & Loss Account.

3. In our opinion securities provided to banks are not adequate tocover the amounts outstanding to them as on the date of Balance Sheet.

4. The company has received notice of demand from the income taxdepartment for the Assessment Year 2011 2012 and 2012 2013 for Rs. 12524480/- & Rs.16068990/- respectively liability for which is not provided for as the company haspreferred an appeal against the same.

5. Due to suspension of the Board of Directors vide the order ofH'ble NCLT dated 23rd January 2020 the roles and responsibilities asspecified under regulation i.e. Listing obligation and disclosure requirement fulfilledby interim resolution professional or Resolution professional.

6. We draw attention to the facts that the attached statement regardingthe financial results of the company which describes the management's assessment of thefinancial impact of the events arising out of Coronavirus (Covid-19) pandemic for which adefinitive assessment of the impact in the subsequent period is dependent upon thecircumstances as they evolve.

Our opinion is not modified in respect of these matters.

Key Audit Matters:

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto be communicated in our report.

1. Non-Verification of Fixed Assets and Inventories:
The company could not arrange for physical verification of Fixed Assets and Inventories.
Accordingly we have considered the same as a Key Audit Matter due to following reasons:
As at March 31 2021 value of Net Block of Fixed Assets of Rs. 12568.24 Lakhs and Inventories of Rs. 60.38 Lakhs is significant item which was not verified physically and no assurance could have been provided for physical existence of the same.
Our procedures included the following:
We have approached with alternate method of analysing the fixed asset register which again was not available with the company leading us to qualify the matter. In case of Inventories since physical verification was not done we were unable to confirm its existence thereby leading us to qualify the matter. These issues were discussed with the management.
2. Non conduct of Internal Audit and Non availability of Internal Financial Controls:
We were not provided with copy of Internal Audit Report and Risk Control Matrix including Standard
Operating Procedures of the company which we consider to be significant key matter.
Our procedures included the following:
In the absence of Internal Financial Controls we have discussed the issues with the management at length and to conclude have qualified the report.

Other Information:

The Company's board of directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Board's Report including Annexures to Board's Report BusinessResponsibility Report but does not include the financial statements and our auditor'sreport thereon. Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon. In connectionwith our audit of the financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained duringthe course of our audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation; we are required to report that fact. We have nothing to report in this regardexcept for matters described in the ‘Basis for Qualified Opinion' and‘Emphasis of Matters' para stated above.

Management's Responsibility for the Standalone FinancialStatements:

The Company's board of directors are responsible for the mattersstated in section 134 (5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the accounting standards specified under section 133 of theAct. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting 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 also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements:

Our objectives are to obtain reasonable assurance about whether thefinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

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

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls Evaluate the appropriateness of accounting policies usedand the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists 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 financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause theCompany to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

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 we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards. From the matters communicatedwith those charged with governance we determine those matters that were of mostsignificance in the audit of the financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor's reportunless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

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 the Act we give in Annexure ‘A' to this Report a statement on the mattersspecified in paragraph 3 and 4 of the said Order to the extent applicable.

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

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

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books except for mattersdescribed in the ‘Basis for Qualified Opinion' and ‘Emphasis ofMatters' para stated above;

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 financial statements comply with the accountingstandards specified under section 133 of the Act read with rule 7 of the Companies(Accounts) Rules 2014 except for matters described in the ‘Basis for QualifiedOpinion' and ‘Emphasis of Matters' para stated above;

e. In our opinion the matter described in the Basis for Qualified Opinion paragraphabove may have an adverse effect on the functioning of the Company.

f. On the basis of the written representations received from the directors as on March31 2021 taken on record by the board of directors none of the directors are disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct;

g. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in “Annexure B”.

h. With respect to the other matters to be included in the auditor's report inaccordance with the requirements of Section 197(16) of the Act (as amended); In ouropinion and to the best of our information and according to the explanations given to usthe Company has not paid any remuneration to its directors during the year; and

i. 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 standalone financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts if any.

iii. There is no amount outstanding which needs to be transferred to investor educationand protection fund.

For Chaturvedi & Patel
Chartered Accountants
FRN: 121351W
CA Deepak Karwa
Partner
M.N: 175321
UDIN: 21175321AAAABK2767
Place: Mumbai
Dated: 26th July 2021

ANNEXURE ‘A' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal andRegulatory Requirements' section of our report to the Members of RAJ RAYON INDUSTRIESLIMITED of even date)

(i). (a) As per the information and explanation given by the management the Companyhas not maintained proper records showing full particulars including quantitative detailsand situation of fixed assets;

(b) As informed by the Resolution Professional physical verification and valuation ofthe properties including plant & machinery has been carried out by IBBI registeredvaluers under the Corporate Insolvency Resolution Process but the valuation report was notshared as per the Insolvency and Bankruptcy Code 2016. Accordingly we are unable tocomment on the physical existence of such fixed assets and relied on ResolutionProfessional in this regard.

(c) According to the information and explanation given to us and the records examinedby us and based on the examination of the scanned copies of the title deeds of theimmovable properties pledged with the bankers as security against borrowings we reportthat the title deeds of the immovable properties that have been pledged as securityagainst borrowings and other facilities availed by the Company are held in the name ofthe Company as at the balance sheet date.

(ii) As informed by the Resolution Professional physical verification and valuation ofthe inventories has been carried out by IBBI registered valuers under the CorporateInsolvency Resolution Process but the valuation report was not shared as per theInsolvency and Bankruptcy Code 2016.

Accordingly we are unable to comment on the physical existence of such inventories andrelied on Resolution Professional in this regard.

(iii) As per the information and explanation given by the management the Company hasnot granted any loans secured or unsecured to companies firms Limited Liabilitypartnerships or other parties covered in the Register maintained under section 189 of theAct. Accordingly the provisions of clause 3 (iii) (a) to (C) of the Order are notapplicable to the Company and hence not commented upon.

(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 Companies Act 2013In respect of loans investments guarantees and security.

(v) As per the information and explanation given by the management the Company has notaccepted any deposits from the public and hence the directives issued by the Reserve Bankof India and the provisions of Sections 73 to 76 or any other relevant provisions of theAct and the Companies (Acceptance of Deposit) Rules 2015 with regard to the depositsaccepted from the public are not applicable.

(vi) As informed to us the maintenance of Cost Records has been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company.

We have broadly reviewed the same and are of the opinion that prima facie theprescribe accounts and records have not been made and maintained.

(vii) a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues of provident fund income-tax sales tax value added tax cessand professional tax during the year with appropriate authorities and there have not beenserious delays in a large number of cases.

b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of income tax sales tax service tax duty ofcustoms duty of excise value added tax as at March 31 2021 which have not beendeposited with statutory authorities on account of a dispute pending are given as below:

Name of the Statute Nature of the Dues Amount in Lakhs Excluding penalties and interest if any except otherwise stated) Period to which the amount relate* Forum where dispute is Pending
Central Excise Duty Excise Duty 23.89 1995-1996 Additional
32.09 1996-1997 Directorate of Anti
38.30 1997-1998 Evasion
25.82 1998-1999
7.40 1999-2000
127.50
0.09# 1999-2000 The company is in the process of refund
2.95 2003-2004 Appellate tribunal of central excise the company has filed reply to show cause notice received from superintendent of central excise
3.35 2003-2004 & 2004-2005
2.84# 2003-2004 The company has filed the appeal in the customs excise & service tax appellate tribunal Ahmedabad
174.57 2012-2013
283.52 (**) 2005-2006 &
2006-2007
Textile Committee Act Cess 0.35 1997-1998 Textile Cess
0.88 1998-1999 Appellate Tribunal
2.13 1999-2000
3.10 2000-2001
1.37 2001-2002
7.82
Gujarat Tax on Entry of Specified Goods into Local area Tax2001 (including penalties & interest Entry Tax 308.83 01-04-2012 to 31.01.2014 The company is in the process of filing reply to the show cause notice issued by the commercial tax officer Ahmedabad
(Net of 250.00 Lakhs being amount recovered by the Department)
State Bank of India Loan 100808.99 2017-2018 -
Phoenix ARC Pvt Ltd Loan 6548.21 2018-2019 -
Income Tax Department Income Tax 125.24 2011-2012 -
Income Tax Department Income Tax 160.69 2012-2013 -
Income Tax Department Income Tax 17.69 2004-2005 -

* Assessment year

** Represents penalty demand

(viii) In our opinion and according to the information and explanations given to us andrecords of the Company examined by us the Company has defaulted in repayment of loans orborrowings to banks and financial institutions. The Company has not taken loan from thegovernment and has not issued any debentures.

(ix) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.

(x) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no prima facie fraud by the company or on thecompany by its officers or employees has been noticed or reported during the year.

(xi) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.

(xii) In our opinion and explanation given to us all transactions with the relatedparties if any are in compliance with section 177 and 188 of Companies Act 2013 and thedetails have been disclosed in the Financial Statements as required by the applicableaccounting standards.

(xiii) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.

(xiv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.

(xv) In our opinion and explanation given to us the company is not required to beregistered under section 45 IA of the Reserve Bank of India Act 1934 and accordingly theprovisions of clause 3 (xvi) of the Order are not applicable to the Company and hence notcommented upon.

For Chaturvedi & Patel
Chartered Accountants
FRN: 121351W
CA Deepak Karwa
Partner
M.N: 175321
UDIN: 21175321AAAABK2767
Place: Mumbai
Dated: 26th July 2021

ANNEXURE “B” TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report to the Members of RAJ RAYON INDUSTRIESLIMITED of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Subsection 3 of Section 143 of the Companies Act 2013 (“theAct”)

We have audited the internal financial controls over financialreporting of RAJ RAYON INDUSTRIES LIMITED (“the Company”) as of March 31 2021in conjunction with our audit of the standalone financial statements of the Company forthe 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. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective 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 the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence 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 judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem over financial reporting of the Company.

Meaning of Internal Financial Controls over Financial Reporting

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

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.

Disclaimer of Opinion:

The system of Internal Financial Control Over Financial Reporting withregard to the company were not made available to us to enable us to determine if thecompany has established adequate internal financial control over financial reporting andwhether such internal financial control was operating effectively. Because of this reasonwe are unable to obtain sufficient appropriate audit evidence to provide a basis for ouropinion whether the Company had adequate internal financial controls over financialreporting and whether such internal financial controls were operating effectively as atMarch 31 2021.

We have considered the disclaimer reported above in determining thenature timing and extent of audit tests applied in our audit of the financial statementsof the Company and the disclaimer does not affect our opinion on the financial statementsof the Company.

For Chaturvedi & Patel
Chartered Accountants
FRN: 121351W
CA Deepak Karwa
Partner
M.N: 175321
UDIN: 21175321AAAABK2767
Place: Mumbai
Dated: 26th July 2021

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