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Suzlon Energy Ltd.

BSE: 532667 Sector: Engineering
NSE: SUZLON ISIN Code: INE040H01021
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VOLUME 6690593
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OPEN 7.02
CLOSE 7.08
VOLUME 6690593
52-Week high 9.45
52-Week low 3.46
P/E
Mkt Cap.(Rs cr) 6,240
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Suzlon Energy Ltd. (SUZLON) - Auditors Report

Company auditors report

To The Members of Suzlon Energy Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements ofSuzlon Energy Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2020 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Cash Flows and the Statement of Changes in Equity for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation in which are incorporated the Returns for the year ended on that date auditedby the branch auditors of the Company's branches located at Germany and theNetherlands.

In our opinion and to the best of our information and according to theexplanations given to us and based on the consideration of reports of the branch auditorson financial information of the branches referred to in the Other Matters section belowthe aforesaid standalone financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and its loss total comprehensiveloss its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in theAuditor's Responsibility for the Audit of the Standalone Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us and the audit evidence obtainedby the branch auditors in terms of their reports referred to in the Other Matters sectionbelow is sufficient and appropriate to provide a basis for our audit opinion on thestandalone financial statements.

Material uncertainty related to Going Concern

We draw attention to note 5 in the standalone financial statementsregarding the continued losses incurred during the current year the negative net worththe negative working capital in standalone financial statements as at March 31 2020 andthe various defaults notices and insolvency proceedings mentioned in the said note thatindicate a material uncertainty about the Company's ability to continue as a goingconcern that existed on the balance sheet date. However having regard to therestructuring of borrowings waiver of all the events of default infusion of additionalequity and commitment of bond holders to restructure their debt subsequent to the yearend and the Management's plans to meet financial obligations in foreseeable futureout of the cash flows from execution of the pipeline of orders in hand future businessplans non-fund based facilities and realisation of trade receivables the standalonefinancial statements of the Company for the year ended March 31 2020 have been preparedon a going concern basis.

Our opinion is not modified in respect of this matter.

Emphasis of Matter

We draw attention to note 2.5 (b) of the standalone financialstatements which describes the undetermined circumstances relating to the COVID 19pandemic and its implications on the management's assessment of the Company'sability to generate sufficient cash flows to meet its financial obligations in theforeseeable future under such undetermined circumstances.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent year. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. In addition to the matter described in the MaterialUncertainty Related to Going Concern section of our report we have determined the mattersdescribed below to be the key audit matters to be communicated in our report.

Key Audit Matter Auditor's Response
1 Impairment of investment in equity shares in and Inter Corporate Deposits given to SE Forge Limited Suzlon Gujarat Wind Park Limited and Suzlon Power Infrastructure Limited. Refer to Notes 1113 and 33 to the standalone financial statements. We performed the following principal audit procedures in relation to management's estimation of recoverable amount of investments in and inter corporate deposits given to Subsidiaries:
As at March 31 2020 the carrying amount of investment in equity shares and Inter Corporate Deposits given to SE Forge Limited Suzlon Gujarat Wind Park Limited and Suzlon Power Infrastructure Limited (‘subsidiaries') amounted to Rs. 729 crore net off impairment losses of Rs. 2865 crore. The management at each reporting date assesses if there are any indicators that the investment in and inter corporate deposits given to the subsidiaries are impaired and if indicators exist performs an impairment test on these investments and Inter corporate deposits by making an estimate of recoverable amount being the higher of fair value less costs to sell and value in use. a) Evaluation of design and implementation of the control relating to managements estimation of recoverable amount of investments in and inter corporate deposits given to these subsidiaries.
b) Tested the operating and effectiveness of controls relating to managements estimation of such recoverable amount;
c) Evaluated the information based on which the impairment indicators are identified such as financial conditions order in hands market condition in which the subsidiaries operates.
The recoverable amount of the investment in and Inter corporate deposits given to subsidiaries are assessed based on complex assumptions that require the management to exercise their judgment such as future expected revenue future expected revenue growth rate gross margins future cash flow determination of historical trends the most appropriate discount rate. As a result the Company recorded a total impairment charge of Rs. 539 crore against these investments and Inter corporate deposits in the Statement of Profit & Loss of the Company for the year then ended. d) Involved valuation experts to assist in
• Evaluation of the appropriateness of the model adopted for impairment assessment;
• Assessment on the reasonableness of key assumptions;
• Assessment on the discount rates used by making reference to comparable companies within the same industry input data to supporting evidence such as business forecast strategic plans and market data; and
We focused on this area due to significant carrying amount of the investments in and inter corporate deposits given to subsidiaries and the significant management judgement and estimates involved in recoverable amount. • Evaluation of management's sensitivity analysis around the key assumptions to ascertain the extent of change in those assumptions that either individually or collectively would be required for the investments in and Inter corporate deposits given to these subsidiaries to be impaired.
2 Impairment of Property Plant and Equipment and intangible assets- Refer to Notes 6 and 7 to the standalone financial statements. We performed the following principal audit procedures in relation to management's assessment of impairment of PP&E and intangible assets: (to be read in the context of the management's assessment of the appropriateness of the going concern assumption as more fully described in the Material Uncertainty Related to Going Concern section above):
As at March 31 2020 the carrying amounts of Property Plant and equipment and intangible assets amounted to Rs. 508 crore and 271 crore respectively.
As at March 31 2020 certain Property plant and equipment ("PP&E") and intangible assets has impairment indicators on account of challenging industry conditions existing in India and financial condition of the Company. The Company performance and prospects have been impacted increasing the risk that the PP&E and intangible assets may be impaired. For cash generation units ("CGU") to which these PP&E belong and contains the determination of recoverable amount being the higher of fair value less costs to sell and value in use requires judgment on the part of management in both identifying and then valuing the relevant CGUs. Recoverable amounts are based on management's view of variables such as future expected revenue future expected revenue growth rate gross margins future cash flow determination of historical trends and the most appropriate discount rate weighted average cost of capital. a) Evaluation of design and implementation of the control relating to management's assessment of impairment of PP&E and intangible assets.
b) Tested the operating and effectiveness of controls relating to management's assessment of impairment of PP&E and intangible assets.
c) Evaluated the appropriateness of management's grouping of these PP&E with the relevant CGUs.
d) Compared the input data used in the cash flow forecasts against the historical figures and the business forecasts.
e) Involved valuation experts to assist in:-
• Evaluation of the appropriateness of the model adopted for impairment assessment;
• Assessment on the reasonableness of key assumptions such as future expected revenue growth rates and gross margin by comparing to commercial contracts and historical trend analyses;
We focused on this area due to the significance of management judgements adopted in assessing the recoverable amount with regard to the impairment assessment of PP&E and intangible assets of the Company.
• Assessment on the discount rates and weighted average cost of capital used by making reference to comparable companies within the same industry input data to supporting evidence such as business forecast inflation rates strategic plans and market data; and
• Evaluation of management's sensitivity analysis around the key assumptions to ascertain the extent of change in those assumptions that either individually or collectively would be required for PP&E and intangible assets to be impaired.
3 Refer to Notes 5 to the standalone financial statements and the Material Uncertainty Related to Going Concern section of this report We performed the following principal audit procedures in relation to management's assessment of going concern:-
The Company had losses during the previous year and has continued to incur losses during the year primarily due to lower volumes high finance cost and certain provision of impairment and the negative net worth of the Company as at March 31 2020 is Rs. 10278 Crore. a) Evaluation of design and implementation of the control relating to management's assessment of going concern.
b) Tested the operating and effectiveness of controls relating to management's assessment of going concern.
We focused on this area due to the significance of management judgements adopted in assessing the material uncertainties related to going concern. c) Evaluation of the appropriateness of identification of material uncertainties.
d) Analysed and discussed cash flow profits and other relevant forecasts with management.
e) Assessed the sensitivities and stress testing on the future cash flows that management has considered for the going concern assessment.
f) Read the minutes of the meeting held between the Lenders FCCB holders and the Company.
g) Visit the lead bankers to validate the minutes of meetings of the core committee and the joint lenders to confirm the reliability of the minutes.
h) Request balance confirmation letters to the lenders to ensure the correct classification of the debt.
i) Obtain and read copy of the restructuring plan and evaluate if the terms stated in the restructuring plan is appropriately factored in the estimation of future cash flows.
j) Independently verify Framework restructuring agreement signed by the Company and the Lenders.
k) Communicate with the appropriate authority of the lead bankers involved in the restructuring plan to validate and confirm the conditions precedent to the restructuring plan are completed.
l) Evaluated disclosures in the standalone financial statements for the Material Uncertainty Related to Going Concern and the related compliance with the requirements of the Standards on Auditing and the applicable financial reporting standards.

Information Other than the Financial Statements and Auditor'sReport Thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Managementdiscussion and analysis Business responsibility Report Corporate Governance report andDirectors' Report including Annexures thereof but does not include the consolidatedfinancial statements standalone financial statements and our auditor's reportthereon.

• Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

• In connection with our audit of the standalone financialstatements our responsibility is to read the other information compare with thefinancial information of the branches audited by the branch auditors to the extent itrelates to these branches and in doing so place reliance on the work of the branchauditors and consider whether the other information is materially inconsistent with thestandalone financial statements or our knowledge obtained during the course of our auditor otherwise appears to be materially misstated. Other Information so far as it relates tothe branches is traced from the financial information audited by the branch auditors.

• If based on the work we have performed we conclude that thereis a material misstatement of this other information we are required to report that fact.We have nothing to report in this regard.

Management's Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in equity of theCompany in accordance with the Ind AS and other accounting principles generally acceptedin India. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error. In preparing the standalone financialstatements management is responsible for assessing the Company's ability to continueas a going concern disclosing as applicable matters related to going concern and usingthe going concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibility for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding thefinancial information of the Company and its branches to express an opinion on thestandalone financial statements. We are responsible for the direction supervision andperformance of the audit of the financial statements of such entities or businessactivities included in the standalone financial statements of which we are the independentauditors. For the other entities or business activities included in the standalonefinancial statements which have been audited by the branch auditors such branch auditorsremain responsible for the direction supervision and performance of the audits carriedout by them. We remain solely responsible for our audit opinion.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (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 standalone financialstatements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matters

We did not audit the financial information of two branches included inthe standalone financial statements of the Company whose financial information reflecttotal assets of Rs. 203.97 crore as at 31 March 2020 and total revenue of Rs. 162.98 crorefor the year ended on that date as considered in the standalone financial statements. Thefinancial statements of these branches have been audited by the branch auditors whosereports have been furnished to us and our opinion in so far as it relates to the amountsand disclosures included in respect of these branches and our report in terms ofsubsection (3) of Section 143 of the Act in so far as it relates to the aforesaidbranches is based solely on the report of such branch auditors.

Our opinion on the standalone financial statements and our report onOther Legal and Regulatory Requirements below is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit and onthe consideration of the reports of the branch auditors on the financial information ofthe branches referred to in the Other Matters section above we report to the extentapplicable 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 and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus.

c) The reports on the accounts of the branch offices of the Company audited underSection 143(8) of the Act by branch auditors have been sent to us and have been properlydealt with by us in preparing this report.

d) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account and with the returns receivedfrom the branches not visited by us.

e) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.

f) The matter described in the Material uncertainty related to Going Concern sectionabove in our opinion may have an adverse effect on the functioning of the Company.

g) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164(2) of the Act.

h) 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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controlsover financial reporting.

i) 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 amendedin our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

j) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements;

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

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

2. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Saira Nainar
Partner
Place : Mumbai (Membership No. 040081)
Date : July 06 2020 (UDIN: 20040081AAAABE2634)

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1(h) under ‘Report on Other Legal andRegulatory Requirements' of our report of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of Suzlon Energy Limited ("the Company") as of March 31 2020in conjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting of the Company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2020 based on thecriteria for internal financial control over financial reporting established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Saira Nainar
Partner
Place : Mumbai (Membership No. 040081)
Date : July 06 2020 (UDIN: 20040081AAAABE2634)

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

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

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant andequipment.

(b) The property plant and equipment were physically verified duringthe year by the Management in accordance with a regular program of verification which inour opinion provides for physical verification of all the property plant and equipmentat reasonable intervals.

According to the information and explanation given to us no materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deed providedto us we report that the title deeds comprising all the immovable properties of landand buildings which are freehold are held in the name of the Company as at the balancesheet date.

Immovable properties of land and buildings whose title deeds have beenpledged as security for loans guarantees etc. are held in the name of the Company basedon the confirmations directly received by us from lenders / parties.

In respect of immovable properties of land and buildings that have beentaken on lease and disclosed as Right-of-Use assets in the financial statements the leaseagreements are in the name of the Company where the Company is the lessee in theagreement except for the following:

Particulars Gross block Net Block Remarks
(Rs. in crore) (Rs. in crore)
Factory building constructed on land admeasuring 34.5 acre at Coimbatore. 44.47 17.36 The Company is in process of obtaining approval from local town planning committee

(ii) As explained to us the inventories were physically verifiedduring the year by the Management at reasonable intervals and no material discrepancieswere noticed on physical verification.

(iii) The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Act.

(iv) The Company has not granted any loans or provided guarantees underSection 185 of the Act and hence reporting under clause 3 (iv) of the Order is notapplicable. In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of Sections 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities.

(v) According to the information and explanations given to us theCompany has not accepted any deposit during the year. Accordingly provisions of clause3(v) of the Order are not applicable.

(vi) The maintenance of cost records has been specified by the CentralGovernment under section 148(1) of the Act. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under sub-section (1) of Section 148 ofthe Act and are of the opinion that prima facie the prescribed cost records have beenmade and maintained We have however not made a detailed examination of the cost recordswith a view to determine whether they are accurate or complete

(vii) According to the information and explanations given to us inrespect of statutory dues:

(a) The Company has not been regular in depositing undisputed statutorydues including Provident Fund Employees' State Insurance Income-tax Customs DutyGoods and Services Tax cess and other material statutory dues applicable to it to theappropriate authorities.

(b) There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income-tax Customs Duty Goods and Services Taxcess and other material statutory dues in arrears as at March 31 2020 for a period ofmore than six months from the date they became payable.

(c) Details of dues of Customs Duty and Service Tax which have not beendeposited as on March 31 2020 on account of disputes are given below:

Name of statute Nature of dues Forum where dispute is pending Period to which the amount relates Amount (Rs. in crore) Amount paid under protest (Rs. in crore)
Customs Act 1962 Customs Duty The Customs Excise and Service Tax Appellate Tribunal 2014-15 0.49
2012-13 and 2014-15 22.75
Finance Act 1994 Service Tax The Customs Excise and Service Tax Appellate Tribunal 2010-11 to 2013-14 5.28 Nil
The Supreme Court of India 2007-08 to 2011-12 84.72

There are no dues of Income-tax Sales Tax Value Added Tax ExciseDuty and Goods and Services Tax as on March 31 2020 on account of disputes.

(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of loans or borrowings tofinancial institutions and banks except as under:

Amount of default of repayment (Rs in crores)
Particulars Principal Interest Period of default
Dues to banks (including working Capital Loans):
Axis Bank Limited 104.01 8.65
Bank of Baroda 280.24 29.58
Bank of India 61.48 4.16
Central Bank of India 285.99 40.92
Corporation Bank 34.74 1.36
ICICI Bank Limited 224.38 -
IDBI Bank 956.21 113.74 The Company is having a continuing default during the year for a period from 1 day to 365 days.
Indian Overseas Bank 480.76 -
Punjab National Bank 591.84 42.74
Oriental bank of Commerce 150.18 1.55
Union Bank of India 50.42 8.02
Saraswat Co-operative Bank Limited 6.90 4.45
EXIM Bank 27.08 13.83
State Bank of India 3432.08 225.39
Yes Bank Limited 96.53 0.32
Bank of Maharashtra 111.34 10.53
Dues to financial institutions:
Life Insurance Corporation of India 82.80 39.05
Power Finance Corporation Limited 224.72 109.85

The Company does not have any borrowing from government.

(ix) The Company has not raised moneys by way of initial public offeror further public offer (including debt instruments) and the term loans have been appliedby the Company during the year for the purposes for which they were raised.

(x) To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company and no material fraud on the Company byits officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanationsgiven to us the Company has paid/ provided managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct.

(xii) The Company is not a Nidhi Company and hence reporting underclause 3 (xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Section 177 and 188 of the Act whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the standalone financial statements etc. as requiredby the applicable accounting standards.

(xiv) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andhence reporting under clause 3(xiv) of the Order is not applicable.

(xv) In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non-cash transactionswith its directors or directors of its holding subsidiary or associate company or personsconnected with them and hence provisions of section 192 of the Act are not applicable.

(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Saira Nainar
Partner
Place : Mumbai (Membership No. 040081)
Date : July 06 2020 (UDIN: 20040081AAAABE2634)

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