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Samtex Fashions Ltd.

BSE: 521206 Sector: Industrials
NSE: N.A. ISIN Code: INE931D01020
BSE 00:00 | 24 Jun 3.05 -0.12
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NSE 05:30 | 01 Jan Samtex Fashions Ltd
OPEN 3.28
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VOLUME 34538
52-Week high 10.04
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Mkt Cap.(Rs cr) 23
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Sell Price 0.00
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OPEN 3.28
CLOSE 3.17
VOLUME 34538
52-Week high 10.04
52-Week low 0.82
P/E
Mkt Cap.(Rs cr) 23
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Samtex Fashions Ltd. (SAMTEXFASHION) - Auditors Report

Company auditors report

TO THE MEMBERS OF SAMTEX FASHIONS LIMITED

Report on Audit of the Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of SAMTEX FASHIONSLIMITED which comprise the Balance Sheet as at 31st March 2021 the Statement of Profitand Loss (including other comprehensive income) the Statement of Changes in Equity andthe Cash Flow Statement for the year then ended and a summary of the significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to usthe aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view (subject tothe matters of Basis of Qualified Opinion and emphasis mentioned below) in conformity withthe Ind AS and other accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2021 and its profit/loss total comprehensiveincome/ loss its cash flows and the changes in equity for the year ended on that date.

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

i. Originally the plant of the company was setup at NSEZ Noida which was later onshifted outside NSEZ during the FY 2017-18 and in march 2019 the company further changedits business premises to Plot no 163 Udyog Vihar Greater Noida UP- 201308 and sincethen no manufacturing activity has been carried on.As per information furnished to us thecompany has further entered into a rent agreement in the month of January 2021 to shiftits business premises to D1/3 Industrial Area Vill-Rajarampur Sikandrabad BulandshaharUP-203205 however till date the company is unable to shift its assets and businessoperations to new premises We have not been provided with the copy of rent agreement toverify the term & conditions mentioned there in. The Company is required to determineimpairment in respect of fixed assets However the Company has not done impairmenttesting. In the absence of any working for impairment of the fixed assets as per Ind AS36 the impact of impairment if any on the financial statements is not ascertainable.

The depreciation has been recognised based on of useful life and residual valueestimated by the management however in absence of necessary evidence of same we areunable to comment on the possible impact arising out of the said matter.

ii. Balance of debtors are outstanding from long period and are subject to confirmationand consequential effect if any on the financial statements remains uncertain. The tradereceivables of the company could not be verified as the confirmation of balances have notbeen provided and made available to us. Trade receivables amounting to Rs 686.31 lacswhich are long overdue and not provided for. Allowance for expected credit loss have notbeen recognized on these financial assets. The company has neither carried out impairmentexercises of Trade Receivables nor provided for the same and recognized the same asnon-current assets since long outstanding. In the absence of recovery and confirmationfrom the party we are unable to comment on the recoverability and consequential impact ofreconciliation and adjustment arising there from in the results if any is notascertainable.

iii. The company has not followed the treatment for recognition and remeasurement ofemployee benefit costs as detailed in the Ind AS 19.

Material Uncertainty Related to Going Concern

The company has accumulated losses and net worth of the company is continuouslyeroding. The company has incurred a net loss during the current and previous year(s) andthe current liabilities exceeds its current assets. Moreover no business activity hasbeen undertaken throughout the year. These conditions indicate the existence of a materialuncertainty that may cast significant doubt about the company's ability to continue as agoing concern. However the financial statements of the company have been prepared on agoing concern basis.

These conditions indicate the existence of a material uncertainty that may castsignificant doubt on the group's ability to continue as going concern and therefore thegroup may be unable to realize its assets and discharge its liabilities in the normalcourse of business. As a result of ongoing matters we are unable to determine as towhether any adjustment that would have been necessary and required to be made in respectof trade receivable trade payables borrowings current liabilities loans and advancesand contingent liabilities as at 31st March 2021 and in respect of the correspondingpossible impact of such items and associated elements on the statement for the year endedon that date should the group be unable to continue as a going concern. The ultimateoutcome of these matters is at present not ascertainable. Accordingly we are unable tocomment on the consequential impact. if any on the accompanying consolidated financialstatements. However the financial statements of the group have been prepared on a goingconcern basis.

Emphasis of Matter

i. The company had already given a corporate guarantee for an amount of Rs 807.46crores against secured loans taken by its wholly owned subsidiary namely M/s SSAInternational Limited which has been classified as non performing assets by the banks.The company has also received the notice u/s 13(2) of the SARFAESI Act 2002 fromconsortium of banks for revocation of its corporate guarantee. The consortium bankers havefiled a petition against the holding company and its subsidiary M/s SSA InternationalLimited regarding recovery of the outstanding dues before the Debt RestructuringTribunal-II Delhi and the company has received an intimation vide O.A 530/18 dated24/05/2018. Further IDBI Bank has declared the main borrower (M/s SSA International Ltd)its directors and Guarantors (including M/s Samtex Fashions Ltd) as willful defaulters interms with RBI Guidelines. The updated details of proceedings against the company and itssubsidiary M/s SSA International Ltd has not been made available in absence of suchdetails we are unable to comment on the possible impact it any arising out of the saidmatters.

ii. We have not been provided with sufficient appropriate audit evidence relating tophysical verification of fixed assets and inventory. Pending completion of suchverification we are unable to comment on the possible impact it any arising out of thesaid matters.

iii. The company had given loans and advances as on 31.03.2021 which are outstandingfrom long time. In the absence of recovery and confirmation from the party we are unableto comment on the recoverability and consequential impact of reconciliation and adjustmentarising there from in the results if any is not ascertainable. Moreover we have notbeen provided with justification giving said advance and sufficient appropriate auditevidence relating to verification of the same. Pending completion of such verification/reconciliation we are unable to comment on the possible impact it any arising out ofthe said matters.

iv. As of 31st March 2021 inventories amounting to Rs 25.31 lacs and as no businessactivity has been taken out during the year the inventories have not been used for a longperiod of time the company may provide for if any inventory item is damaged or has becomeobsolete or if the selling price has declined.

v. The Company continued to recognize deferred tax assets upto March 312021 inabsence of probable certainty and convincing evidence for taxable income in future we areunable to ascertain the extent to which these deferred tax assets can be utilized.

vi. The company is not regular in payments of undisputed statutory dues towards PF TDSduring the year. Balances of input tax credit under goods and service tax are not inconfirmation with balances as appearing in the online portal.

vii. We have not been provided with the internal audit report.

viii. We have not been provided with sufficient appropriate audit evidence relating toclassification of trade payable dues to MSME and trade payable dues other than MSME.Pending completion of such verification/ reconciliation we are unable to comment on thepossible impact it any arising out of the said matters.

ix. Balance of trade payables are outstanding from long period and are subject toconfirmation and consequential effect if any on the financial statements remainsuncertain. The trade payables of the company could not be verified as the confirmation ofbalances have not been provided and made available to us.

x. Confirmation of balances of security deposits balances with governmentauthoritiesbank balances Bank FDRs have not been provided to us we are unable tocomment on the possible impact it any arising out of the said matters.

xi. As informed to us the bank accounts of the company were put on debit freeze by EPFdepartment and we have not been provided with detailed explanation regarding thelitigation with the EPF department. Moreover several litigations are ongoing with the

Income Tax Department against which the company has also deposited Rs 118.67 lacs fordifferent financial years under protest however we have not been provided with detailsand current status of the said litigations. We are unable to comment on possible impactif any arising out of the said matter.

Our report is not modified in respect of the above matter stated.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

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

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Business Responsibility ReportCorporate Governance and Shareholder's Information but does not include the financialstatements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and those charged with governance for the financialstatements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the accounting Standards specified undersection 133 of the Act read with relevant rule there under and other accounting principlesgenerally accepted in India in compliance with Regulation 33 of the Listing Regulations..This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate implementation and maintenance of 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 financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative 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 financial statement

Our objectives are to obtain reasonable assurance about whether the 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 financial statements As part of an audit in accordance with SAs weexercise professional judgment and maintain professional scepticism throughout the audit.We also:

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

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has internal financial controls with reference to Financial Statements inplace 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.

• Evaluate the appropriateness and reasonableness of disclosures made by the Boardof Directors in terms of the requirements specified under Regulation 33 of the ListingRegulations.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

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

• Obtain sufficient appropriate audit evidence regarding the Financial Results ofthe Company to express an opinion on the Financial Results.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in

(i) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the financialstatements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Other Matter

In Note No. 29(iv) to the financial results regarding the impact of COVID 19 on theoperations of the group has been disclosed. Further the extent to which the COVID 19pandemic will impact the company's financial performance is dependent on futuredevelopments which are highly uncertain.

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 Section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.

2. As required by Section 143(3) of the Act based on our audit and on theconsideration of the reports of the branch auditors and other auditors on the separatefinancial statements/ financial information of the branches and joint operations referredto in the Other Matters paragraph above we report to the extent applicable 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 of the aforesaidstandaloneInd AS financial statements.

b) In our opinion proper books of account as required by law relating to preparationof the aforesaid standalone Ind AS financial statements have been kept so far as itappears from our examination of those books.

c) The standalone Balance Sheet the standalone Statement of Profit and Loss thestandalone Statement of Changes in Equity and the standalone Statement of Cash Flow dealtwith by this Report are in agreement with the books of account maintained for the purposeof preparation of the standalone Ind AS financial statements.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act.

e) On the basis of the written representations received from the directors of theCompany as on 31 March 2021 and taken on record by the Board of Directors of respectivecompanies none of the directors of the Group companies incorporated in India isdisqualified from being appointed as a director in terms of Section 164(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 aqualified / adverseopinion on the operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) 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 Ind AS financial statements refer note no. 23(a).

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

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

FOR KAPIL KUMAR & CO CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: 006241N
Sd/-
MOHIT KAKKAR (PARTNER)
29/06/2021 NEW DELHI MEMBERSHIP NUMBER: 538844
UDIN: 21538844AAAAEH3020

Annexure A to the Independent Auditors' Report

The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31 March 2021 we reportthat:

(i) a) The Company has not updated its records showing full particulars includingquantitative details and situation of fixed assets.

b) As explained to us the fixed assets have been physically verified by the managementduring the year. As informed to us there is regular program which has been carried outduring the year. However we are unable to comment on any difference in physicalverification and books as we have not been provided with sufficient appropriate auditevidence relating to physical verification of fixed assets and fixed assets register wasnot produced before us for verification.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the company does not own any immovableproperty.

(ii) According to the information and explanations given to us the inventory has beenphysically verified during the year by the management but stock records were underupdation and were not produced before us. Accordingly they were not produced before usfor verification and we have relied upon the information provided to us by the management.Further as explained to us discrepancies noticed on physical verification were notsignificant and have been properly dealt within the books of accounts.

(iii) As explained to us the Company has granted unsecured loans to a body in theregister maintained under section 189 of the Companies Act 2013 we were not providedwith the terms and conditions along with repayment schedule and payment of interest ofgrant of said loan. The company has duly received back the sum so advanced and no interesthas been charged on it. Moreover the company has advanced loan to wholly owned subsidiaryM/s Arlin Foods Ltd and the outstanding balance of the said loan as on 31.03.2021 is Rs16.23 lacs. The said loan is unsecured and free of interest and schedule of repayment ofthe principal has not been stipulated.

(iv) According to the information and explanations given to us the company hascomplied with the provisions of section 185 & 186 of the act in respect ofinvestments guarantees & securities provided by it during the year however we havenot been provided with necessary documents to verify the compliance of said provisions.

(v) In our opinion & according to the information and explanations given to us thecompany has not accepted any deposits from the public within the meaning of provisions ofSections 73 to 76 of the Act or any other relevant provisions of the Act &the rulesframed thereunder.

(vi) According to the information and explanations given to us Maintenance of Costrecords as prescribed by the Central Government under Section 148(1)(d) of the CompaniesAct 2013 is not applicable to the company for the year.

(vii) a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxsales tax wealth tax service tax duty of customs value added tax cess and othermaterial statutory dues have not been regularly deposited during the year by the Companywith the appropriate authorities. As explained to us the Company did not have any dues onaccount of employees' state insurance and duty of excise.

According to the information and explanations given to us undisputed amounts payablein respect of provident fund income tax sales tax wealth tax service tax duty ofcustoms value added tax cess and other material statutory dues were in arrears for aperiod of more than six months from the date they became payable as detailed below

Sr No Name of Statute Nature of the Dues Amount Period Due Date Date of payment
1 Income Tax Act 1961 TDS 18930 01/04/2019 to 30/09/2019 7th of following month Not yet paid.

Further TDS payable from period 01/10/2019 to 31/03/2020 was outstanding for paymenttill date.

b) According to information and explanation given to us the disputed statutory dues

i.e Income Tax aggregating to Rs 166.29 lakhs that have not been provided for in thebooks of accounts on account of matters pending before concerned appellate authorities.Thecompany had paid a sum amounting to Rs118.68 lakhs as duty under protest against thesedemands . No further details / explanations have been provided to us on these matters.

As per the data available online Income Tax account of the company there are certainliabilities to the tune of Rs 44.85 lacs in total related to earlier years have beenuploaded by the department relating to certain discrepancies and a sum amounting to Rs17.06 lacs related to TDS defaults related to earlier years have been uploaded on TRACESwebsite. The said demands being disputed the company is in process of filing necessaryrectifications u/s 154 of the income tax act with the income tax department.

The company has received order under section 8 of the employees provident fund andmiscellaneous provisions act dated 03/03/2020 and as per the said order the company hasdefaulted in payment of provident fund dues/damages etc under the said act amounting tothe tune of Rs 707645. No further details / explanations have been provided to us on thesematters.As informed to us the bank accounts of the company were put on debit freeze by EPFdepartment and we have not been provided with detailed explanation regarding thelitigation with the EPF department.

(viii) Based on our audit procedures and according to the information and theexplanations given to us we are of the opinion that the company has not defaulted inrepayment of dues to financial institutions banks Government or to debenture holders.Thecompany had already given a corporate guarantee for an amount of Rs 807.46 crores againstsecured loans taken by its wholly owned subsidiary namely M/s SSA International Limitedwhich has been classified as nonperforming assets by the banks. The company has alsoreceived the notice u/s 13(2) of the SARFAESI Act 2002 from consortium of banks forrevocation of its corporate guarantee. The consortium bankers have filed a petitionagainst the holding company and its subsidiary M/s SSA International Limited regardingrecovery of the outstanding dues before the Debt Restructuring Tribunal-II Delhi.

(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 during the year.

(x) According to the information and explanations given to us no material fraud on thecompany by its officers or employees has been noticed or reported during the year.However IDBI Bank has declared the main borrower (M/s SSA International Ltd) itsdirectors and Guarantors (including M/s Samtex Fashions Ltd) as willful defaulters interms with RBI Guidelines. The updated details of proceedings against the company and itssubsidiary M/s SSA International Ltd has not been made available.

(xi) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has not been paid or provided duringthe year.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) In our opinion and according to the information and explanations given to us andon the basis of examination of books and records of the company carried out by us all thetransactions with the related parties are in compliance with provisions of section 177 and188 of the act where applicable. The details there on has been disclosed in the financialstatements as required under the applicable Accounting Standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly the provisions ofclause 3 (xv) of the Order are not applicable to the Company.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

FOR KAPIL KUMAR & CO CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: 006241N
Sd/-
MOHIT KAKKAR (PARTNER)
29/06/2021 NEW DELHI MEMBERSHIP NUMBER: 538844
UDIN: 21538844AAAAEH3020

Annexure - B to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SamtexFashions Limited ("the Company") as of 31 March 2021 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). 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 company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 according to information and explanations given to us the companydoes not have an adequate internal financial control system commensurate with the size ofcompany and nature of its business.

FOR KAPIL KUMAR & CO CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: 006241N
Sd/-
MOHIT KAKKAR (PARTNER)
29/06/2021 NEW DELHI MEMBERSHIP NUMBER: 538844
UDIN: 21538844AAAAEH3020

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