TO THE MEMBERS OF RELIANCE NAVAL AND ENGINEERING LIMITED
(FORMERLY KNOWN AS RELIANCE DEFENCE AND ENGINEERING LIMITED)
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of RELIANCE NAVALAND ENGINEERING LIMITED (FORMERLY KNOWN AS RELIANCE DEFENCE AND ENGINEERING LIMITED)("the Company") which comprise the Standalone Balance sheet as at March 312019 and the Statement of Standalone Profit and Loss (including Other ComprehensiveIncome) the Statement of Standalone Changes in Equity and the Standalone Cash FlowStatement for the year then ended and notes to the Standalone Financial Statementsincluding a summary of significant accounting policies and other explanatory information(hereinafter referred to as "the Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 (the Act') in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and its loss including othercomprehensive income the changes in equity and its cash flows for the year ended on thatdate.
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI')together with the ethical requirements that are relevant to our audit of the StandaloneFinancial Statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
Material Uncertainty related to Going Concern
Note no. 36 to the Standalone Financial Statements regarding preparation of standalonefinancial statements of the Company on going concern basis notwithstanding the fact thatthe Company continue to incur cash losses it's net worth has been fully eroded defaultedin repayment of principal and interest to it's lenders loans have been called back bysecured lenders non-current assets are significantly impaired current liabilitiesexceeded the total assets of the Company etc. for the reasons stated in the said note.These conditions indicate the existence of a material uncertainty that may castsignificant doubt on the Company's ability to continue as going concern. Theappropriateness of assumption of going concern is critically dependent upon the Company'sability to raise requisite finance / generate cash flows in future to meet it'sobligations.
Our opinion is not modified in respect of this matter.
Key Audit Matters (KAM)
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.
|Key Audit Matter ||How our audit addressed the key audit matter |
|1) Impairment of Property Plant and Equipment (PPE) and Capital Work in Progress (CWIP): || |
|Annually Management reviews whether there are any indicators of impairment on the PPE and CWIP of the Company (Refer Note 1 (g) (XIV) to the Standalone Financial Statements) by reference to the requirements under Ind AS 36 "Impairment of Assets". Accordingly Management has identified impairment indicators (operating losses negative net-worth low value order book Industry overlook etc.) in the Company. As a result an impairment assessment was required to be performed by the Company by comparing the carrying value of the PPE and CWIP to their recoverable amount to determine whether impairment was required to be recognised. ||Our audit procedures included among others: |
| || Updating our understanding of management's annual impairment testing process. |
| || Ensuring the methodology of the impairment exercise continues to comply with the requirements of Indian Accounting Standards (Ind AS) as adopted including evaluating management's assessment of indicators of impairment against indicators of impairment specified within Ind AS 36. |
|For the purpose of above impairment testing the Management has determined the recoverable value based on valuation reports. || Evaluating the independent external valuer's competence capabilities and objectivity. |
|These conclusions are dependent upon significant management judgments including in respect of: || Understanding the methodologies used by the external valuer to estimate resale values. |
| || Verifying the completeness of disclosure in the Standalone Financial Statements as per Ind AS 36. |
| Estimated utilization cash flows time line for getting new sales orders political environment etc. During the year ended March 31 2019 the Company has recorded an impairment provision of Rs. 783304 Lakhs to reduce the aggregate carrying value of PPE to Rs. 144600 Lakhs and CWIP to Rs. 10277 Lakhs to their estimated recoverable values as per the valuation report. Refer Note no. 2 to the Standalone Financial Statements. || |
|We considered this area as key matter due to the significance of the carrying value of the assets being assessed and due to the level of management judgments impacting the impairment assessment. || |
|2) Deferred Tax Assets (DTA) and Credit balance of Minimum Alternate Tax (MAT) || |
|As disclosed in Note no. 5 and 6 to the Standalone Financial Statements the Company has not recognised the DTA of 123420.02 Lakhs (including MAT credit entitlement of Rs. 3338.18 Lakhs). Rs. ||Our audit procedures included among others: |
|The Management of the Company has forecasted the future taxable profit and concluded not to recognise the DTA in the books of accounts. || Evaluating the recognition and measurement of the current and deferred tax assets and liabilities by analyzing the current and deferred tax calculations for the compliance with the tax law. |
|We considered this area as key matter due to the: || Assessing the management's judgments relating to the forecasts of future taxable profit and evaluating the reasonableness of the assumptions underlying the preparation of these forecasts including the consistency of the assumptions used with those used to evaluate the recoverable amount of Company's cash generating units where relevant. |
|- significance of the carrying amount of DTA and MAT and || |
|- significant judgment is required in forecasting the future taxable profit including growth rate etc. || Assessing the appropriateness of the disclosures included in the Standalone Financial Statements in respect of current and deferred tax balances as per Ind AS 12 "Income Taxes". |
|3) Litigation Matters and Contingent Liabilities || |
|The Company is subject to number of significant litigations. Major risks identified by the Company in that area related to stamp duty winding-up petitions applications filed by certain lenders / creditors to NCLT under IBC for the recovery of outstanding dues Arbitration with the customer / vendors / service providers invocations of corporate guarantees by the lenders of a subsidiary and bank guarantees by the customers etc. The amount of litigation may be significant and estimates of the amounts of provisions or contingent liabilities are subject to significant Management judgment. (Refer Note No. 33 to the Standalone Financial Statements) ||Our audit procedures included among others: |
| || Assessing the procedures implemented by the Company to identify and gather the risks it is exposed to. |
| || Obtaining an understanding of the risk analyses performed by the Company with relating supporting documentation and studying written statements from internal and external legal experts where applicable. |
| || Discussion with the management on the development in these litigations during the year ended March 31 2019. |
|Due to complexity involved in these litigation matters management's judgment regarding recognition and measurement of provisions for these legal proceedings is inherently uncertain and might change over time as the outcomes of the legal cases are determined. Accordingly it has been considered as a key matter. || Enquiring from the company's legal counsel (internal) and study the responses as received from them. |
| || Verification that the accounting and / or disclosure as the case may be in the Standalone Financial Statements made by the Company is in accordance with the assessment of legal counsel / management. |
| || Obtaining representation letter from the management on the assessment of these matters as per SA 580 (revised) Written representations. |
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the management discussion & analysis and director's reportincluded in the annual report but does not include the Standalone Financial Statements andour auditor's report thereon.
Our opinion on the Standalone 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 Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained in the 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 thisregard.
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 Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the state of affairs (financial position) loss(financial performance including other comprehensive income) cash flows and the statementof changes in equity of the Company in accordance with the accounting principles generallyaccepted in India including Indian Accounting Standards (Ind AS') prescribed underSection 133 of the Act read with relevant rules issued thereunder.
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 Standalone Financial Statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error. In preparing the StandaloneFinancial Statements management is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso. Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditors' Responsibility for the audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the StandaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3) (i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by 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 ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the Standalone Financial Statements or if such disclosures are inadequateto modify 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 the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. 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 Standalone Balance Sheet the Statement of Standalone Profit and Loss (Includingother comprehensive income) the Statement of Standalone Changes in Equity and theStandalone Cash Flow Statement dealt with by this Report are in agreement with the booksof account.
d. In our opinion the aforesaid Standalone Financial Statements comply with the Ind ASprescribed under Section 133 of the Act.
e. The matter described under Material Uncertainty Related to Going Concern paragraphabove in our opinion 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 2019 and taken on record by the Board of Directors and also based on legal opinionobtained by the Company with reference to the cancellation of the NCDs issued by theCompany to it's lenders and principal and interest thereon not payable and itsconsequential impact on the disqualification of directors under section 164(2) of the Actas mentioned in note no. 16.2 to the Standalone Financial Statements none of thedirectors is disqualified as on March 31 2019 from being appointed as a director in termsof Section 164 (2) of the Act.
g. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer toour separate Report in "Annexure A".
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 our opinionand to the best of our information and according to the explanations given to us theCompany has paid managerial remuneration of Rs. 74.28 Lakhs to its whole timedirector as approved by the shareholders of the Company but without obtaining priorapproval from the secured lenders as required under the third proviso of the Section197(1) of the Act.
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 as referred to in Note No. 33.1 to theStandalone Financial Statements;
ii. The Company has made provisions as required under the applicable law or Ind ASfor material foreseeable losses if any on long term contracts including derivativecontracts;
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company;;
2. As required by the Companies (Auditor's Report) Order 2016 ("CARO 2016")issued by the Central Government in terms of Section 143(11) of the Act we give in "AnnexureB" a statement on the matters specified in paragraphs 3 and 4 of CARO 2016.
Annexure "A" to the Independent Auditor's Report (Referred to in paragraph 1(g) under Report on Other Legal and Regulatory Requirements' of our report of evendate on Standalone Financial Statements of RELIANCE NAVAL AND ENGINEERING LIMITED for theyear ended March 31 2019) Report on the Internal Financial Controls Over FinancialReporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")
We have audited the internal financial controls over financial reporting of RELIANCENAVAL AND ENGINEERING LIMITED (FORMERLY KNOWN AS RELIANCE DEFENCE AND ENGINEERING LIMITED)(the Company') as of March 31 2019 in conjunction with our audit of the StandaloneFinancial Statements of the Company for the year 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 Reporting(the Guidance Note') issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding 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.
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 issued by the ICAI and the Standards of Auditing prescribed underSection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy 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 of therisks of material misstatement of the Standalone Financial Statements whether due tofraud 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the Standalone Financial Statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the ICAI.
Annexure "B" to the Independent Auditor's Report (Referred to in paragraph 2under the heading "Report on Other Legal and Regulatory Requirements" of ourreport of even date to the members of RELIANCE NAVAL AND ENGINEERING LIMITED on theStandalone Financial Statements for the year ended March 31 2019)
i. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.
b. As explained to us the Company has physically verified certain assets inaccordance with a phased program of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such physical verification as compared with the availablerecords.
c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company doesn't have any freehold immovableproperties. As informed to us in respect of leasehold immovable properties the originaltitle deeds have been deposited with the lenders we have been produced the photocopy ofthe title deeds of these leasehold immovable properties and based on such documents thetitle deeds are held in the name of the Company.
ii. As explained to us inventories have been physically verified during the year bythe management and in our opinion the frequency of verification is reasonable.Discrepancies noticed on physical verification of the inventories between the physicalinventories and book records were not material having regard to the size of theoperations of the Company and the same have been properly dealt with. iii. In respect ofloans secured or unsecured granted by the Company to companies firms Limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theAct:
a. In the earlier years the Company had granted unsecured loan to its five wholly ownedsubsidiary Companies and the terms and conditions on which the loan had been granted werenot prima facie prejudicial to the interest of the Company.
b. The terms of repayment of principal and payment of interest have been stipulated andduring the year the principal and interest were due for payment but due to the financialcrisis the parties had not paid the same.
c. The amounts are overdue and the Company has considered the said loan and interestreceivables as doubtful and has been written off. iv. In our opinion and according to theinformation and explanations given to us the Company has complied with the provisions ofsection 185 and 186 of the Act in respect of grant of loans making investments andproviding guarantees and securities. v. According to the information and explanationsgiven to us the Company has not accepted any deposits from the public. Therefore theprovisions of paragraph 3 (v) of the CARO 2016 are not applicable to the Company. vi.According to the information and explanations given to us the Central Government has notprescribed the cost records to be maintained under sub-Section (1) of Section 148 of theAct in respect of activities carried on by the Company. Therefore the provisions ofparagraph 3(vi) of the CARO 2016 are not applicable to the Company.
vii. According to the information and explanations given to us in respect of statutorydues:
a. The company has been generally regular in depositing undisputed statutory duesincluding provident fund Employees' State Insurance duty of customs cess Goods andService Tax and any other statutory dues as applicable with the appropriate authoritiesduring the year however delays have been noticed in respect of income tax. According tothe information and explanations given to us no undisputed amounts payable in respect ofsuch statutory dues were outstanding as at March 31 2019 for a period of more than sixmonths from the date they became payable except income tax amounting to Rs. 118.20 Lakhs.
b. Details of dues of Income tax and dues to Excise Department aggregating to Rs.3991.20 Lakhs that have not been deposited on account of disputed matters pending beforeappropriate authorities are as under.
|Name of the Statutes ||Nature of the Dues ||Period to which it relates ||Amounts (Rs. in Lakhs) (*) ||Forum where the dispute is pending |
|Income Tax Act1961 ||Income Tax ||2007-08 to 2017-18 ||51.28 ||Commissioner of Income Tax |
|CENVAT Credit Rules 2004 ||Penalty under Central Excise Act1944 ||2010-11 to 2017-18 ||3939.92 ||Commissioner of Central Excise |
| || ||Total ||3991.20 || |
* Net of amount deposited under protest viii. Based on our audit procedures andinformation and explanations given by the management and considering the recall noticesreceived by the company from lender banks we are of the opinion that as on March 31 2019the Company has defaulted in repayment of loans (including payment of interest on loansand Non Convertible Debentures (NCD)) to banks and financial institutions aggregating toRs. 646436.32 Lakhs. Lender wise details of such defaults are as under:
|Bank / Financial Institution ||Amount of default as at the balance sheet date |
| || ||(Rs. in Lakhs) |
| ||Less Than 90 Days ||More Than 90 Days |
|Union Bank of India ||2415.83 ||106905.76 |
|IDBI Bank ||2586.94 ||87398.00 |
|EXIM Bank ||1631.30 ||47317.78 |
|State Bank of Patiala ||786.35 ||34781.03 |
|UCO Bank ||463.44 ||19994.25 |
|Oriental Bank of Commerce ||350.97 ||13413.06 |
|Life Insurance Corporation ||237.05 ||9226.79 |
|Punjab National Bank ||651.93 ||35518.46 |
|United Bank of India ||470.74 ||16476.09 |
|Karnataka Bank ||86.90 ||3489.52 |
|Karur Vyasa Bank ||94.32 ||3639.97 |
|Bank of India ||408.06 ||13064.80 |
|Central Bank of India ||1402.34 ||54494.99 |
|IFCI Ltd ||646.38 ||22615.74 |
|Jammu & Kashmir Bank ||818.08 ||26645.58 |
|Corporation Bank ||923.15 ||26817.29 |
|Bank of Maharashtra ||261.32 ||9103.55 |
|IIFC UK ||223.73 ||25874.30 |
|Punjab & Sind Bank ||74.56 ||2417.11 |
|State Bank of India ||816.42 ||36000.28 |
|Dena Bank ||367.84 ||6797.24 |
|State Bank of Mysore ||18.46 ||814.90 |
|Vijaya Bank ||279.17 ||8258.39 |
|HUDCO ||594.76 ||18024.12 |
|IL&FS Bank ||18.09 ||719.19 |
|Total ||16628.13 ||629808.19 |
ix. According to the information and explanations given to us the term loans raisedduring the year were prima facie been applied for the purpose for which those areraised. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments).
x. Based on our audit procedures performed for the purpose of reporting the true andfair view of the Standalone Financial Statements and on the basis of information andexplanations given by the management no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.
xi. In our opinion and according to the information and explanations given to us theCompany has paid managerial remuneration without the requisite approvals from the lendersas mandated by the provisions of section 197 read with Schedule V to the Companies Act2013.
xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Therefore the provisions of paragraph 3 (xii) of the CARO2016 are not applicable to the Company.
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 where applicable and details of suchtransactions have been disclosed in the Standalone Financial Statements etc. as requiredby the applicable accounting standards.
xiv. According to the information and explanations give 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 debentures during the year. Therefore theprovisions of paragraph 3 (xiv) of the CARO 2016 are not applicable to the Company.
xv. According to the information and explanations given to us the Company has notentered into non-cash transactions with directors or persons connected with him.Therefore the provisions of paragraph 3 (xv) of the CARO 2016 are not applicable to theCompany.
xvi. In our opinion and according to information and explanations provided to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.
| ||For Pathak H.D. & Associates |
| ||Chartered Accountants |
| ||Firm Reg. No. 107783W |
| ||Gyandeo Chaturvedi |
| ||Partner |
| ||Membership No.46806 |
|Place: Mumbai || |
|Dated: May 28 2019 || |