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Tamilnadu Jai Bharath Mills Ltd.

BSE: 521038 Sector: Industrials
NSE: N.A. ISIN Code: INE868H01017
BSE 00:00 | 29 Oct Tamilnadu Jai Bharath Mills Ltd
NSE 05:30 | 01 Jan Tamilnadu Jai Bharath Mills Ltd
OPEN 4.67
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P/E
Mkt Cap.(Rs cr) 19
Buy Price 4.45
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Sell Price 4.23
Sell Qty 10.00
OPEN 4.67
CLOSE 4.67
VOLUME 5
52-Week high 4.67
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 19
Buy Price 4.45
Buy Qty 1.00
Sell Price 4.23
Sell Qty 10.00

Tamilnadu Jai Bharath Mills Ltd. (TNJAIBHARATH) - Auditors Report

Company auditors report

To the Members of M/s. Tamilnadu Jai Bharath Mills Limited Report on the Ind ASFinancial Statements Qualified Opinion

We have audited the accompanying Ind AS financial statements of M/s. Tamilnadu JaiBharath Mills Limited ("the Company") which comprises theBalance Sheet as at March 31 2020 the Statement of Profit and Loss (including OtherComprehensive Income) Statement of Changes in Equity and statement of cash flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the ‘Basisfor Qualified Opinion' section of our report the aforesaid Ind AS financial statementsgive the information required by the Act in the manner so required and give a true andfair view in conformity with the Ind AS and accounting principles generally accepted inIndia of the state of affairs of the Company as at March 31 2020 its Loss includingother comprehensive income the changes in equity and its cash flows for the year ended onthat date.

Basis for Qualified Opinion

As detailed in note 10 to the accompanying Ind AS financial statements for the yearended March 31 2020 the company has ceased its operations and lease out the Factory onconversion basis. Further it had incurred heavy loss during this year and in the previousyears with a consequential erosion of net worth. Also major portion of the Fixed Assetshave been sold during the year. Further the company has taken considerable amount ofunsecured loans to meet out the operational expenses. In respect of the above matter ouraudit report for the year ended March 31 2020 is qualified.

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 the Ind ASfinancial 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 qualified audit opinionon the financial statements.

Emphasis of Matter:

a. We draw attention to Note No.2.11 to the financial statements which describe nonprovision of Gratuity in compliance with IndAs19 issued by the ICAI.

b. We draw attention to Note No.8 to the financial statements which describe pendingconfirmation of balance of Trade Debtors Creditors and Advances.

c. We draw attention to Note No.5 to the financial statements which describes nondisclosure of details of creditors as per the provisions of MSME Act.

d. We draw attention to Qualifications given in the Secretarial audit report whichdescribes non appointment of Independent Director Non compliance of minimum publicshareholding non listing of all the shares in stock exchange and suspension of Trading inthe Stock Exchange.

e. I draw attention to Note No-13 of Notes forming part of financial statement whichdescribes the estimation of uncertainties relating to the Global health Pandemic fromCovid-19.

Our opinion is not modified in respect of these matters.

Material uncertainty related to Going Concern:

We draw attention to Note No.10 to the financial statements which describe hugeaccumulated losses complete erosion of Net Worth and incurring of huge cash losses in thecurrent and previous years. The company has stopped its manufacturing process and all themanufacturing facilities have been leased out on conversion basis. Further the companyhas sold substantial portion of its Land and Plant & Machinery during the year to meetout the working capital requirements. These conditions indicate the existence of amaterial uncertainty that may cast significant doubt about the company's ability tocontinue as a going concern. However the financial statements of the company have beenprepared on a going concern basis for the reasons stated in the said note. Our opinion isnot modified in respect of these matters.

Key Audit Matters:

Key Audit Matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and informing our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto be communicated in our Report

Sl.No. Key Audit Matter Auditor's Response
1 Assessment of Going Concern Basis - ( as described in Note No.2.2 of financial statements) Principal Audit Procedures
Our audit procedures included the following:
As at March 31 2020 the Company has incurred loss with a consequent erosion of its net worth and has net current liabilities of 20.96 Crores. • We have obtained an understanding of the process of management assessment of going concern and also assessed the same.
The Company has prepared cash flow forecast for next twelve months which involves judgment and estimation around sources of funds to meet the financial obligations and cash flow requirements over the next twelve months. • We read the management assessment in Note 10 which states:
Management is taking various initiatives including monetization of assets sale of stake in certain assets raising finances from financial institutions and strategic investors refinancing of existing debt and other strategic initiatives for reduction of debt. Company has leased out the production facilities on conversion basis to reduce the operating loss. The above initiatives once successfully completed will enable the Company to meet their financial obligations and cash flow requirements.
Considering the above we have identified the assessment of going concern assumption as a key audit matter considering that the Company has net current liabilities.
• We have obtained the future cash flows of the Group which are largely based on the expected proceeds from unsecured loan from Directors and group concerns. We have considered the same for our assessment of the company's capability to meet its financial obligation falling due within next twelve months.
Realization of Trade Receivables (as described in Note No.3.6) • We have assessed the disclosures made by the Company in relation to this matter
Principal Audit Procedures
2 Trade Receivables of the Company comprise mainly receivables in relation to the company's receivables from its customers towards sale of yarn. The operating environment in Our audit procedures included the following:
Tested the accuracy of aging of Trade receivables at year
the Textile industry has the inherent risk of default on receivables from the company's customers. In particular in the event of financial stress at the customers end the company is exposed to potential risk of financial loss when the customers fail to meet their payment obligations in accordance with the agreed credit terms. end on a sample basis;
Obtained a list of outstanding receivables along with confirmation of balances on a sample basis as per the auditing standards and identified any debtors with financial difficulty through discussion with Management.
Assessed the recoverability of the unsettled receivables on a sample basis through our evaluation of management's assessment with reference to the credit profile of the customer historical payment pattern of customers publicly available
The recoverable amount was estimated by management based on their specific recoverability assessment on individual debtor with reference to the ageing profile historical payment pattern and the past record of default of the customer. Management would make specific provision against individual balances with reference to the recoverable amount. For the purpose of determination of provision requirement significant judgments and assumptions including the credit risks of customers the timing and amount of realization of these receivables are required for the identification of impairment events and the determination of the provision to be made towards the receivables. information if any and latest correspondence with customers and to consider if any additional provision should be made; and
Tested subsequent settlement of trade receivables after the balance sheet date on a sample basis if any.
Claims and exposure relating to taxation and litigation (as described in Note 2.12 and 2.13 of the Ind AS financial statements).
The Company is subject to a large number of legal and tax related claims which have been disclosed / provided for in the financial statements based on the facts and circumstances of each case.
Our audit procedures included the following:-
3. Taxation and litigation exposures have been identified as a key audit matter due to complexities involved in these matters timescales involved for resolution and the potential financial impact of these on the financial statements. Further significant management judgment is involved in assessing the exposure of each case and thus a risk that such cases may not be adequately provided for or disclosed. • Gained an understanding of the process of identification of claims litigations and contingent liabilities and identified key controls in the process. For selected controls we have performed tests of controls.
• Obtained the summary of Company's legal and tax cases and critically assessed management's position through discussions with the Head of Tax and operational management on both the probability of success in significant cases and the magnitude of any potential loss.
Physical verification of Inventories:
The Company's management conducts physical verification of inventories during the year at reasonable intervals however on • Inspected external legal opinions wherever considered necessary and other evidence to corroborate
account of the COVID-19 related lockdown restrictions management was unable to perform year end physical verification of inventories. management's assessment of the risk profile in respect of legal claims.
Subsequent to the year-end Management has carried out physical verification of inventories before starting any operational activity at all locations. • Assessed the relevant disclosures made within the financial statements to address whether they appropriately reflect the facts and circumstances of the respective tax and legal exposures and the requirements of relevant accounting standards.
4. We were not able to participate in observation of the physical verification of inventories due to the COVID-19 pandemic situation and have performed alternate procedures to test existence of inventory as at year-end in accordance with the requirements of the auditing standards; and identified ‘Inventories - Existence' as a key audit matter. Principal Audit Procedures performed:
We have performed following alternate procedures to audit the existence of inventories as at the year-end since we were unable to physically observe the inventory verification:
• evaluated the design and implementation of the controls over physical verification of inventories and tested the operating effectiveness of the controls during the year.
• for inventory at third party warehouses obtained direct confirmations and as appropriate performed rollback procedures to compare with inventory quantities at year end on a sample basis.
• Verified the analytical reviews performed by the management such as consumption analysis and stock movement analysis for locations not covered in physical verification for the year for raw material and finished goods at locations on a sample basis.

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 andAnalysis Board's Report including Annexures to Board's Report Business ResponsibilityReport Corporate Governance and Shareholder's Information but does not include thestandalone financial statements 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 Ind ASFinancial Statements

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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income changes in equityand cash flows of the Company in accordance with accounting principles generally acceptedin India including Indian Accounting Standards (Ind AS) prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.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 for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statement that give a true and fairview and are free from material misstatement whether due to fraud or error.

In preparing the Ind AS financial statements management is responsible for assessingthe Company'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.

The Board of Directors is also responsible for overseeing the company's financialreporting process. Auditor's Responsibilities for the Audit of Ind AS FinancialStatement

Our objectives are to obtain reasonable assurance about whether the Ind AS 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 Ind AS financial statements.

A further description of the auditor's responsibilities for the audit of the Ind ASfinancial statements is included in Annexure A. This description forms part of ourauditor's report.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure B a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. 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 Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act except compliance of IndAs19with respect to Employee Benefits.

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

f) With respect to the adequacy of the Internal Financial Control with reference toFinancial Statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure C"

g) In our opinion and to the best of our information and according to the explanationsgiven to us the company has not paid any remuneration to its directors during the yearand hence the provisions of section 197(16) of the Act are not applicable.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements - Refer Note 2.12 and 2.13 to the Ind ASfinancial statements;

ii) The Company does not have any long term contract including derivative contractrequiring provision for material foreseeable losses;

The Company does not have any amount required to be transferred to the InvestorEducation and Protection Fund.

For SRITHAR & ASSOCIATES

Chartered Accountants

Firm's Registration No. 015896S
Date: 29.06.2020 (S.SRITHAR)
Place: Chennai MembershipNo.209047
UDIN: 20209047AAAAAU9533

Annexure A

Responsibilities for Audit of Ind AS Financial Statement

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 standalone Ind ASfinancial 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 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

• 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 Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern. Evaluate the overall presentation structure and content ofthe Ind AS financial statements including the disclosures and whether the Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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 auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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.

For SRITHAR & ASSOCIATES

Chartered Accountants

Firm's Registration No. 015896S
Date: 29.06.2020 (S.SRITHAR)
Place: Chennai MembershipNo.209047
UDIN: 20209047AAAAAU9533

ANNEXURE B TO INDEPENDENT AUDITOR'S REPORT Annexure referred to in paragraph 1 of ourReport of even date to the members of Tamilnadu Jai Bharath Mills Limited on the accountsof the Company for the year ended 31stMarch 2020

In terms of Companies (Auditor's Report) Order 2016 issued by Central Government ofIndia in terms of Section 143(11) of The Companies Act 2013 we further report on thematters specified in paragraph 3 and 4 of the said Order that: -

1. FIXED ASSET

i) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

The Company has instituted a programme of physically verifying its fixed assets in aphased manner over a period of three years. In accordance with this programme scheduledfixed assets were verified during the year and no material discrepancies were noticedduring such verification.

According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company

2. INVENTORIES

The management has conducted physical verification of its inventories at reasonableintervals during the year. No material discrepancies were noticed during suchverification; the discrepancies wherever noticed were accounted for appropriately in thebooks of account.

3. LOANS TO PARTIES LISTED U/S 189 OF THE ACT

The Company has not granted any loans secured or unsecured to parties covered inregister maintained under Section 189 of The Companies Act 2013.

4. COMPLIANCE WITH SECTIONS 185 & 186 OF THE ACT

i) In connection with matters specified u/s 185 of the act the Company has notadvanced any loans directly or indirectly to any of its directors or to any other personin whom the directors are interested or has given any guarantee or provided security inconnection with any loan taken by any other person.

ii) The company has not made any investments in any other companies within the meaningof section 186(1) of the act.

iii) In connection with matters specified under section 186(2) of the act the companyhas not advanced any loans directly or indirectly to any person or body corporate orhas given any guarantee or provided security in connection with any loan taken by anyother body corporate or any other person or acquired any securities of companies in excessof limits stipulated

5. The Company has not accepted any deposits from the public.

6. We have broadly reviewed the books of account maintained by the company pursuant tothe Rules made by Central Government for the maintenance of cost 148(1) of the CompaniesAct 2013 and are of the opinion that prima-facie the specified accounts and records havebeen made and maintained. We have not however made a detailed examination of therecords.

7. STATUTORY DUES

i) According to the records maintained by the company and the information andexplanations given to us the company has been generally regular in depositing undisputedstatutory dues including Provident Fund Employees State Insurance Income Tax VAT /Sales Tax GST Duty of Customs Service Tax Cess.

ii) According to the records maintained by the company and the information andexplanations given to us there were no arrears of undisputed statutory dues in respectof provident fund income tax sales tax value added tax GST duty of customs servicetax cess which remained outstanding as at 31st March 2020 for a period ofmore than six months from the date they became payable.

iii) According to the records of the company and the information and explanations givento us the disputed statutory dues pertaining to earlier years aggregating to Rs. 241.79Lakhs on account of matters pending before appropriate authorities is as under and forwhich no provision had been

made in the accounts.

Nature of Dues Forum where the dispute is pending Period Amount (Rs. in Lakhs)
Sales Tax STAT- Madurai 1998-1999 1.45
Sales Tax STAT- Madurai 1999-2000 1.63
Sales Tax Additional Commissioner Chennai 2003-2004 12.86
Central Sales Tax Commissioner - Virudhunagar 2007-2008 20.57
Central Sales Tax Commissioner - Virudhunagar 2008-2009 12.30
Central Sales Tax Commissioner - Virudhunagar 2009-2010 8.98
Central Sales Tax Commissioner - Virudhunagar 2011-2012 21.85
Central Sales Tax Commissioner - Virudhunagar 2014-2015 4.24
Provident Fund High Court Madurai Apr 09 to Dec09 56.48 *
Provident Fund Appellate Tribunal Delhi Jan10-Jun 11 99.07*
ESI. High Court Madurai Nov 06- Mar07 2.36
Total 241.79

• Out of the total sum of Rs.155.55 lakhs Rs.56.48 lakhs has been alreadydeposited with PF Authority under protest.

8. The Company has not defaulted in the repayment of any dues to financial institutionbank or government or debenture holders.

9. Term loans were utilized for the purposes for which they were obtained.

10. Based upon the audit procedures performed and information and explanations given tous by the management no fraud by the company or on the Company by its officers oremployees have been noticed or reported during the course of our audit.

11. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not paid / provided formanagerial remuneration. Hence the provisions of Section 197 read with Schedule V to theAct are not applicable.

12. The provisions of section 406(1) of the act do not apply to the company.

13. The transactions entered into with related parties are in compliance withrequirements of sections 177 & 188 of the act and the details have been disclosed inthe financial statements etc. as required by the applicable accounting standards.

14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year.

15. The Company has not entered into any non-cash transactions with directors orpersons connected with directors during the year.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For SRITHAR & ASSOCIATES

Chartered Accountants

Firm's Registration No. 015896S
Date: 29.06.2020 (S.SRITHAR)
Place: Chennai MembershipNo.209047
UDIN: 20209047AAAAAU9533

ANNEXURE - C TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 2(g) under 'Report on Other Legal and RegulatoryRequirements' in our Independent Auditor's Report of even date to the members of thecompany on the IND AS financial statements for the year ended 31st March 2020]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of the companyas of 31st March 2020 in conjunction with our audit of the IND AS financialstatements of the company for the year ended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The respective Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India ("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to therespective company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

AUDITOR'S 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 and the Standards on Auditing specified under Section 143(10) ofthe Act to the extent applicable to an audit of internal financial controls both issuedby the ICAI. 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 were 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 procedures selected depend on the auditor's judgment 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 and appropriate toprovide a basis for our audit opinion on the Holding Company's internal financial controlssystem over financial reporting. MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIALREPORTING

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

i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

ii) 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

iii) 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 controlsover 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 the company in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2020 based on theinternal control over financial reporting criteria established by the company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.

For SRITHAR & ASSOCIATES

Chartered Accountants

Firm's Registration No. 015896S
Date: 29.06.2020 (S.SRITHAR)
Place: Chennai MembershipNo.209047 UDIN: 20209047AAAAAU9533

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