You are here » Home » Companies » Company Overview » Rajapalayam Mills Ltd

Rajapalayam Mills Ltd.

BSE: 532503 Sector: Industrials
NSE: RAJPALAYAM ISIN Code: INE296E01026
BSE 00:00 | 17 Aug 848.80 -1.95
(-0.23%)
OPEN

855.00

HIGH

859.00

LOW

848.00

NSE 05:30 | 01 Jan Rajapalayam Mills Ltd
OPEN 855.00
PREVIOUS CLOSE 850.75
VOLUME 2353
52-Week high 1398.00
52-Week low 700.00
P/E 21.14
Mkt Cap.(Rs cr) 731
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 855.00
CLOSE 850.75
VOLUME 2353
52-Week high 1398.00
52-Week low 700.00
P/E 21.14
Mkt Cap.(Rs cr) 731
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rajapalayam Mills Ltd. (RAJPALAYAM) - Auditors Report

Company auditors report

To the Members of M/s. RAJAPALAYAM MILLS LIMITED Report on the Audit of the SeparateFinancial Statements

Opinion

We have audited the Separate Financial Statements of RAJAPALAYAM MILLS LIMITED ("theCompany") which comprise the Separate balance sheet as at 31st March 2022 and theSeparate Statement of Profit and Loss the Separate Statement of changes in Equity and theSeparate Statement of cash flows for the year ended on that date and notes to theseparate financial statements including a summary of significant accounting policies andother explanatory information (herein after referred to as "the Separate FinancialStatements")

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid separate financial statements give the information required bythe Companies Act 2013 ('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 2022 and the profit and totalcomprehensive income 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 theSeparate 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 theseparate financial statements under the provisions of the Companies Act 2013 and theRules there under 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.

Emphasis of Matter

We draw attention to Note No. 56(b) to the separate financial statements whichdescribes the uncertainties and the impact of the COVID-19 pandemic on the company'soperations and results as assessed by the management. The Management has assessed thatthere is no material impact on the financial statements due to lockdown and relatedrestrictions imposed towards controlling the COVID-19 pandemic. Our opinion is notmodified 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 separate financial statements of the current period.These matters were addressed in the context of our audit of the separate financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

S.No. Key Audit Matter Auditor's Response
1 Recognition and measurement of deferred taxes Principal Audit Procedures
The recognition and measurement of deferred tax items requires determination of differences between the recognition and the measurement of assets liabilities income and expenses in accordance with the Income Tax Act and other applicable tax laws including application of ICDS and financial reporting in accordance with Ind AS. The key matter was addressed by performing audit procedures which involved assessment of underlying process and evaluation of internal financial controls with respect to measurement of deferred tax and re- performance of calculations and assessment of the items leading to recognition of deferred tax in light of prevailing tax laws and applicable financial reporting standards.
Assessment of Deferred Tax Assets is done by the management at the close of each financial year taking into account forecasts of future taxable results. Furthermore we assessed the adequacy and appropriateness of the disclosures in the separate financial statements.
We have considered the assessment of deferred tax liabilities and assets as a key matter due to the importance of management's estimation and judgment and the materiality of amounts. (Refer to Note No. 5D(iv) (v) (vi) & 7(iv) to the Separate Financial Statements)
2 Evaluation of uncertain Tax Position/ Other contingent liabilities Principal Audit Procedures
The Company has material uncertain tax position in respect of possible or actual taxation disputes litigations and claims. The provisions are estimated using a significant degree of management judgment in interpreting the various relevant rules regulations and practices and in considering precedents in various legal forums. The Audit addressed this Key Audit Matter by assessing the adequacy of tax Provisions by reviewing the management's underlying assumptions in estimating the tax provisions and the possible outcome of the disputes.
(Refer to Note No. 46 the Separate Financial Statements) We reviewed the significant litigations and claims and discussed with the Company's legal counsel external advisors about their views regarding the likely outcome and magnitude of and exposure to relevant litigation and claims.
We also reviewed to relevant judgments and the opinions given by the company's advisers which were relied on by the management for such claims. Furthermore we assessed the adequacy and appropriateness of the disclosures in the separate financial statements.
3 Existence and impairment of Trade Receivables Principal Audit Procedures
Trade Receivables are significant to the Company's financial statements. The Collectability of trade receivables is a key element of the company's working capital management which is managed on an ongoing basis by its management. Due to the nature of the Business and the requirements of customers various contract terms are in place there is a risk that the carrying values may not reflective of their recoverable amounts as at the reporting date which would require an impairment provision. Where there are indicators of impairment the company undertakes assessment of the recoverability of the amounts. Given the magnitude and inherent uncertainty involved in the judgment involved in estimating impairment assessment of trade receivables we have identified this as a key audit matter. We performed audit procedures on the assessment of trade receivables which included substantive testing of revenue transactions obtaining trade receivable external confirmations and testing the subsequent payments received. Assessing the impact of impairment on trade receivables requires judgment and we evaluated management's assumptions in determining the provision for impairment of trade receivables by analyzing the ageing of receivables assessing significant overdue individual trade receivables and specific local risks combined with the legal documentations where applicable.
We also reviewed the system of obtaining periodical confirmation from the customers which are kept in electronic mode by the company. We tested the timing of revenue and trade receivables recognition based on the terms agreed with the customers. We also reviewed on a sample basis terms of the contract with the customers invoices raised etc. as a part of our audit procedures.
(Refer to Note no. 18 to the Separate Financial Statements) Furthermore we assessed the adequacy and appropriateness of the disclosures in the separate financial statements.

Information Other than the Separate Financial Statements and Auditors' Report Thereon

The Company's Management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report Board's Report including Annexure to Board's Report BusinessResponsibility Report Corporate Governance and Report on CSR activities and Shareholdersinformation but does not include the separate financial statements and our auditor'sreport thereon.

Our opinion on the separate financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the separate financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the separate financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

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

Management's Responsibility for the Separate Financial Statements

The Company's Management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these separate financialstatements that give a true and fair view of the state of affairs profit or lossincluding other comprehensive income changes in equity and cash flows of the Company inaccordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 ofCompanies Act 2013 read with relevant rules issued there under and accounting principlesgenerally accepted in India. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the separate financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.

In preparing the separate financial statements Management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

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

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

Our objectives are to obtain reasonable assurance about whether the separate financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these separate 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 separate 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 controls 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 separate 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 separate 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 separatefinancial statements including the disclosures and whether the separate financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the separate financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the separate 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 separate 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 separate financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

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 Companies Act 2013 we give in the Annexure A a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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 purposes of our audit.

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

(c) The Separate Balance Sheet the Separate Statement of Profit and Loss includingOther Comprehensive Income the Separate Statement of changes in equity and the Separatestatement of Cash Flow dealt with by this Report are in agreement with the books ofaccount.

(d) In our opinion the aforesaid separate financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2022 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2022 from being appointed as a director in terms of Section164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourSeparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the company's internal financial control overfinancial reporting.

(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.

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of Section 197 of the Act.

(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 in our opinionand to the best of our information and according to the explanations given to us: i. TheCompany has disclosed the details of the pending litigations and its impact on thefinancial position in its separate financial statements have been disclosed in Note No. 46of the Disclosures forming part of the Separate Financial Statements for the year ended31st March 2022;

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

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

iv. (a) The Management has represented that to the best of its knowledge and beliefno funds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the Company to or in any other personsor entities including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shalldirectly or indirectly lend or invest in other persons or entities identified in anymanner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries.

(b) The Management has represented that to the best of its knowledge and belief nofunds have been received by the Company from any persons or entities including foreignentities ("Funding Parties") with the understanding whether recorded inwriting or otherwise that the Company shall directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever ("UltimateBeneficiaries") by or on behalf of the Funding Parties or provide any guaranteesecurity or the like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures performed that have been considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) of Companies(Audit and Auditors) Rules 2014 as provide under (a) and (b) above contain any materialmis-statement.

v. The dividend proposed in the previous year declared and paid by the Company duringthe year is in accordance with Section 123 of the Act.

For N.A. JAYARAMAN & CO For SRSV & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Registration No. 001310S Firm Registration No. 015041S
R. PALANIAPPAN R. SUBBURAMAN
Partner Partner
Membership No. 205112 Membership No. 020562
UDIN: 22205112AJNWRB8658 UDIN: 22020562AJNXHR6418
Rajapalayam
25th May 2022.

"ANNEXURE A" TO THE INDEPENDENT AUDITORS' REPORT

With reference to the Annexure A referred to in the Independent Auditor's Report to themembers of company on the Separate financial statements for the year ended 31st March2022 we report the following:

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

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

(b) As explained to us all the Property Plant and Equipment have been physicallyverified by the management in a phased periodical manner which in our opinion isreasonable having regard to the size of the Company and nature of its assets. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch physical verification.

(c) According to the information and explanation given to us and on the basis of theverification of the records of the company the title deeds of immovable properties of theCompany are held in the name of the Company.

In respect of immovable properties taken on lease and disclosed as right of use assetsin the Separate financial statements the lease agreements are in the name of company.

(d) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not revalued its propertyplant and equipment (including right of use assets) or intangible assets or both duringthe year.

(e) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no proceedings initiated or pendingagainst the Company for holding any Benami property under the Prohibition of BenamiProperty Transactions Act 1988 and rules made there under.

(ii) (a) The management has conducted the physical verification of inventory atreasonable intervals.

(b) The discrepancies noticed on verification between the physical stocks and the booksrecords were properly dealt with in the books of accounts and were not material.

(c) The Company has been sanctioned working capital limits in excess of five crorerupees from bankers on the basis of security of current assets and the quarterlystatements filed with such banks are in agreement with the books of account of company.

(iii) (a) The Company has made investments in / provided guarantee / granted loans /advances in the nature of loans during the year details of which are given below: ($ inLakhs)

Particulars Investments Guarantees Loans
Aggregate amount granted during the year
(i) Associates NIL NIL NIL
(ii) Other Companies NIL NIL 700.00
(iii) Others NIL NIL 6.25
Balance outstanding as at Balance Sheet date
(i) Associates 7042.57 NIL NIL
(ii) Other Companies 2661.42 5500.00 1650.00
(iii) Others NIL NIL 20.68

(b) According to the information and explanations given to us and based on the auditprocedures conducted by us in our opinion the investments made guarantees providedsecurity given and the terms and conditions of the grant of all loans and advances innature of loans and guarantees provided prima facie not prejudicial to the interest ofthe company.

(c) According to the information and explanations given to us and based on the auditprocedures conducted by us in our opinion in respect of loans and advances in the natureof loans where the schedule of repayment of principal and payment of interest has beenstipulated the repayments or receipts are regular.

(d) According to information and explanations given to us and based on the auditprocedures performed in respect of loans granted and advances in the nature of loansprovided by the Company there is no overdue amount remaining outstanding as at theBalance Sheet date.

(e) No loan or advance in the nature of loan granted by the Company which has fallendue during the year has been renewed or extended or fresh loan granted to settle theoverdues of existing loans given to the same parties.

(f) According to the information and explanations given to us and based on the auditprocedures conducted by us the Company has not granted loans repayable on demand withoutspecifying any terms or period of repayment.

(iv) According to information and explanations give to us the company has compliedwith the provisions of Section 185 and 186 of the Act in relation to loans guaranteesprovided and investments made.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits or amounts which are deemed to be deposits duringthe year. Accordingly reporting under this Clause 3 (v) of the Order does not arise.

(vi) The Central Government under Section 148 (1) of the Companies Act 2013 hasspecified maintenance of cost records and such accounts and records have been so made andmaintained by the Company.

(vii) (a) According to the records of the Company and information and explanationsgiven to us the company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax duty of customs duty of excisegoods and services tax cess and any other statutory dues with the appropriateauthorities. No undisputed amounts payable in respect of the above were in arrear as at31st March 2022 for a period of more than six months from the date they become payable.

(b) As at 31st March 2022 according to the records of the Company the following arethe particulars of the disputed dues on account of sales tax income tax customs dutywealth tax service tax and cess which have not been deposited on account of dispute:

($ in Lakhs)
Sl. Name of the No. Statute Forum where dispute is pending Period to which it relates 31-03-2022 31-03-2021
1 Income Tax Act Commissioner of Income Tax (Appeals) FY 2017-18 82.49 82.49

(viii) According to the Information and explanations given to us and on the basis ofour examination of the records of the Company the Company has not surrendered ordisclosed any transactions previously unrecorded as income in the books of account inthe tax assessments under Income tax Act 1961 as income during the year.

(ix) (a) Based on our audit procedures and according to the information andexplanations given to us by the management we are of the opinion that the company has notdefaulted in repayment of loans or borrowings or in the payment of interest thereon to anylender.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company is not a declared wilful defaulterby any bank or financial institution or other lender.

(c) In our opinion and according to the information and explanations given to us by themanagement term loans were applied for the purpose for which the loans were obtained.

(d) According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company we report that funds raised on short termbasis have not been used for long term purposes.

(e) According to the information and explanations given to us and on an overallexamination of the separate financial statements of the Company we report that theCompany has not taken any funds from any entity or person on account of or to meet theobligations of its associate companies as defined in the Act.

(f) According to the information and explanations given to us and the proceduresperformed by us we report that the Company has not raised loans during the year on thepledge of securities held in its associate companies as defined under the Act.

(x) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company has raised moneys by way ofRights Issue during the year and were applied for the purposes for which those are raised.

(b) In our opinion and according to the information and explanations given to us andon the basis of our examination of the records of the Company the Company has not raisedfunds by way of preferential allotment or private placement of shares during the year.

(xi) (a) Based on examination of the books and records of the Company and according tothe information and explanations given to us considering the principles of materiallyoutlined in the Standards on Auditing we report that no fraud by the Company or on theCompany has been noticed or reported during the course of the audit.

(b) According to the information and explanations given to us no report undersub-section (12) of Section 143 of the Act has been filed by the auditors in Form ADT-4 asprescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014 with the CentralGovernment.

(c) No whistle blower complaints received by the Company during the year. AccordinglyClause 3 (xi) (c) of the Order is not applicable to the Company.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly Clause 3 (xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanation given to us alltransactions with the related parties are in compliance with sections 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the SeparateFinancial Statements as required by the applicable Indian accounting standards.

(xiv) (a) Based on information and explanations given to us and our audit proceduresin our opinion the Company has an internal audit system commensurate with the size andnature of its business.

(b) We have considered the internal audit reports of the Company till date for theperiod under audit.

(xv) ln our opinion and according to the information and explanations given to us theCompany has not entered into any non - cash transactions with directors or personsconnected to its Directors. Accordingly provisions of Section 192 of the Act are notapplicable to the Company.

(xvi) (a) In our opinion and according to the information and explanations given to usthe Company is not required to be registered under Section 45-IA of the Reserve Bank ofIndia Act 1934. Accordingly the provision of Clause 3 (xvi)(b)of the Order is notapplicable to the Company

(b) The Company is not Core Investment Company (CIC) as defined in the regulations madeby the Reserve Bank of India.

(c) According to the information and explanations provided to us during the course ofour audit the Group does not have any CICs.

(xvii) The Company has not incurred cash losses in the current year and in theimmediately preceding financial year.

(xviii) There has been no resignation of the Statutory Auditors during the year.

(xix) According to the information and explanations given to us and on the basis of thefinancial ratios (also refer to Note No. 55(h) to the Seperate Financial Statements)ageing and expected dates of realization of financial assets and payment of financialliabilities other information accompanying the separate financial statements ourknowledge of the Board of Directors and management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which causesus to believe that any material uncertainty exists as on the date of the audit reportthat the Company is not capable of meeting its liabilities existing at the date of balancesheet as and when they fall due within a period of one year from the balance sheet date.We further state that our reporting is based on the facts up to the date of the auditreport and we neither give any guarantee nor any assurance that all liabilities fallingdue within a period of one year from the date of the balance sheet will get discharged bythe Company as and when they fall due.

(xx) In our opinion and according to the information and explanations given to usthere is no unspent amount under sub-section (5) of Section 135 of the Act pursuant to anyproject under CSR. Accordingly clauses 3(xx)(a) and 3 (xx)(b) of the Order are notapplicable.

(xxi) The reporting under Clause 3(xxi) of the Order is not applicable in respect ofaudit of Separate Financial Statements. Accordingly no comment in respect of the saidclause has been included in this report.

For N.A. JAYARAMAN & CO For SRSV & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Registration No. 001310S Firm Registration No. 015041S
R. PALANIAPPAN R. SUBBURAMAN
Partner Partner
Membership No. 205112 Membership No. 020562
UDIN: 22205112AJNWRB8658 UDIN: 22020562AJNXHR6418
Rajapalayam
25th May 2022.

"Annexure B" to the Independent Auditors' Report of even date on the

Separate Financial Statements prepared in accordance with Indian Accounting Standardsof Rajapalayam Mills Limited

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 M/s.RAJAPALAYAM MILLS LIMITED ("the Company") as of March 31 2022 inconjunction with our audit of the separate 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 financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover 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 financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

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.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31st 2022 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For N.A. JAYARAMAN & CO For SRSV & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Registration No. 001310S Firm Registration No. 015041S
R. PALANIAPPAN R. SUBBURAMAN
Partner Partner
Membership No. 205112 Membership No. 020562
UDIN: 22205112AJNWRB8658 UDIN: 22020562AJNXHR6418
Rajapalayam
25th May 2022.

.