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TCI Finance Ltd.

BSE: 501242 Sector: Financials
NSE: TCIFINANCE ISIN Code: INE911B01018
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OPEN 5.10
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VOLUME 250
52-Week high 11.27
52-Week low 4.30
P/E
Mkt Cap.(Rs cr) 7
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

TCI Finance Ltd. (TCIFINANCE) - Auditors Report

Company auditors report

To

The Members of TCI Finance Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Quaified Opinion

We have audited the accompanying Standalone Ind AS Financial Statements of TCI FinanceLimited ("The Company") which comprise the Balance Sheet as at March 312021the Statement of Profit and loss statement of changes in equity and the Statement of CashFlow for the year then ended and summary of the significant accounting policies and otherexplanatory information ("here after referred to as "the standalone Ind ASfinancial statements")

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the Basis for QualifiedOpinion section and Material Uncertainty Related to Going Concern section of this reportthe aforesaid standalone Ind AS financial statements give the information required by theCompanies Act 2013 in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 312021 the loss and total comprehensive income changes in equityand its cash flows for the year ended on that date.

Basis for qualified Opinion

We draw attention to:

a. Note 29 of the standalone Ind AS financial statements regarding claims on theCompany by the lenders of Amrit Jal Ventures Private Limited and it's subsidiary GatiInfrastructure Bhasmey Power Private Limited aggregating to Rs. 25619.80 Lakhs due toinvocation of corporate guarantee given by the Company. Against the said liability theCompany during the year 2019-20 considering the disputed nature of claim and unlawfulinvocation of Corporate Guarantee made a provision of Rs. 7798.91 Lakhs. As at March312020 and March 312021 the company has disclosed the balance amount of liability Rs.17820.89 Lakhs as contingent liability in its standalone Ind AS financial statements. Inthe absence of sufficient and appropriate audit evidence for the said treatment in ouropinion the company ought to have recognised the liability in its books. Had the liabilitybeen recognised the loss for the year and accordingly the other equity (negative balance)will be higer by Rs.17.820.89 Lakhs

b. Note no 32 of the standalone Ind AS financial statements regarding exposures toMahendra Investment Advisors Private Limited (MAPL) in the form of Inter Corporatedeposits (ICD's) and TDS receivable aggregating to Rs. 4336.09 Lakhs (Previous year: Rs.4359.37 Lakhs). Also the Company did not recognize the interest income during thecurrent financial year- Rs. 268.42 Lakhs. In view of the negative networth in thestandalone financial statements of MIAPL as at March 312020 and other adversedevelopments in the MIAPL the Company made impairment loss of Rs. 867.22 Lakhs as atMarch 312021 on the gross exposure of Rs. 4336.09 Lakhs. In the absence of thesufficient and appropriate audit evidence with regard to recovery of the balance amount ofRs. 3683.33 Lakhs we are unable to comment on the impact if any on the loss for the yearand other equity and carrying value of loans given at this stage. Had the Companyrecognised impairment loss for balance amount the loss for the year and other equity(negative balance) would have been higher by similar amount.

c. Note no 28 (ii) of the standalone Ind AS financial statements regarding theinvestments in equity shares of a Company held in Gati Limited pledged as security for thecredit facilities availed by Gati Infrastructure Private Limited (GIPL) on receipt ofletter of comfort from Amrit Jal Ventures Private Limited. The lenders of GIPL haveinvoked the pledge and realized their dues. However the company continued to present thesaid equity shares as "Investments" at fair value as at March 312021 despiteinvocation for the reasons stated in the said note. Considering that investments have beensold we are unable to comment on the appropriateness of presentation of fair value ofsaid equity shares as investments in the standalone Ind AS financial statements. Furtherin view of the uncertainly relating to recoverability of the said investment we areunable to comment on the impact if any on the loss for the year and other equity.

d. Note no 28(iii) of the standalone Ind AS financial statements regarding theinvestments in equity shares of the Company held in Gati Limited pledged for thefacilities availed by Amrit Jal Ventures Private Limited (AJVPL). The lenders of AJVPLhave invoked the pledge and realized their dues. However the company continued to presentthe said equity shares as investment at fair value as at March 312021 despite invocationfor the reasons stated in the said note. Considering that investments have been sold weare unable to comment on the appropriateness of presentation of fair value of said equityshares as investments in financial statements. Further in view of the uncertaintyrelating to recoverability of the said investment we are unable to comment on the impactif any on the loss for the year and other equity.

e. Note no 31 of the standalone Ind AS financial statements regarding non recognitionof interest expense of Rs. 38.25 Lakhs for the year ended March 312021 for the reasonsstated there under. Total interest expense not recognised upto March 312021 aggregatesto Rs. 47.68 Lakhs. Consequently loss for the year 2020-2021 is lower by Rs. 38.25 Lakhsand as at March 312021 Other Equity (negative balance) and Borrowings were lower by Rs.47.68 Lakhs.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAS) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone Ind AS financial statementsunder the provisions of the Act and the Rules made there under and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualified opinion on the standalone Ind ASfinancial statements.

Material Uncertainty Related to Going Concern

We draw attention to Note 33 of the standalone Ind AS financial statements regardingpreparation of the standalone Ind AS financial statements by the management on a goingconcern basis for the reasons stated therein. In the absence of sufficient and appropriateaudit evidence and the liabilities devolved on the Company upon invocation of guaranteesby the lenders of other entities we are of the opinion that preparation of standalone IndAS financial statements on a going concern is not appropriate. Hence we are unable tocomment on the effect on carrying value of assets and liabilities had the financialstatements been prepared not as a going concern.

Our opinion is modified in respect of this matter.

Emphasis of Matter:

We draw attention to

a. Note no 28(i) of the standalone Ind AS financial statements regarding the accountingtreatment and presentation and disclosure relating to sale of pledged shares by thelenders of the Company / lenders of the Related Parties.

b. Note no 25 of the standalone Ind AS financial statements regarding the petitionfiled by the three shareholders on the Company and the management regarding oppression andmismanagement of affairs of the Company and the statutory auditors of the Companyregarding reporting requirements of the said transactions.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalone Ind Asfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

S.No Key Audit Matters Auditors Response
1 Going Concern Refer to Material Uncertainty Related to Going Concern paragraph above
2 Accuracy of existence rights & obligations completeness and valuation of the investments given as guarantees to the lenders of the Company / lenders of the related parties - Refer Note 28 to the Standalone Ind AS financial statements - "Investments Sale of Pledged Shares by Lenders". We reviewed the matters involved in the litigations and also the representations furnished by the Company and also other undertakings by the counter parties. The same has been reported under "Basis for qualified Opinion " section of this report
3 Recoverability of the exposures
As at March 31 2021 the Company has got the exposures of Mahendra Investment Advisors Private Limited ( referred as MIAPL) aggregating to Rs. 4336.09 Lakhs (Previous year: Rs. 4359.37 Lakhs) - Refer Note 32 to the Standalone Ind AS financial statements Valuation estimates of the respective entities to whom these loans were given prepared by the management and approved by the Board of Directors / Audit Committee.These estimates have been considered and inview of the uncertainties involved in the estimates the same has been reported under "Basis for qualified Opinion " section of this report
4 Recognition of the corporate guarantee as liability
As at March 312021 the Company has given Corporate guarantees to lenders of Amrit Jal Ventures Private Limited and to the lenders of subsidiaries of AJVPL (collectively referred as AJVPL) aggregating to Rs. 31366.71 Lakhs - Refer Note 29 to the Standalone Ind AS financial statements Guarantee invokations by the lenders and ability of the entities on whose behalf the guarantees were given prepared by the management and approved by the Board of Directors / Audit Committee. These estimates have been considered and in view of the uncertainties involved in the estimates the same has been reported under "Basis for qualified Opinion " section of this report

Information Other than the Standalone Ind AS Financial Statements and Auditor's ReportThereon

The Company's Board of Directors is responsible for the preparation of otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Financial and Operational Review Director's Report CorporateGovernance Report Annual Report on CSR activities but does not include the standalonefinancial statements and our auditor's report thereon.

Our opinion on the standalone Ind As financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.

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

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with The Accounting Standardsspecified under section 133 of the Companies Act 2013 read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone Ind As financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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

Auditors' Responsibility for the Audit of Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the 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 Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

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

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

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

Materiality is the magnitude of misstatements in the standalone Ind AS financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the standalone Ind AS financial statementsmay be influenced. We consider quantitative 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 standalone Ind AS 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 standalone Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 Act we give in the 'Annexure A' a statement on the matters specified in paragraphs 3and 4 of the Order to the applicable.

2. As required by Section 143(3) of the Companies Act 2013 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 purpose 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 including Other Comprehensiveincome statement of changes in equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of the account.

d) Except for the possible effect of the matters described in the Basis for QualifiedOpinion paragraph above in our opinion the aforesaid standalone financial statementscomply with the Ind AS specified under section 133 of the Act

e) The matter relating to going concern described under Material Uncertainty Related toGoing Concern paragraph above and the matters stated at paragraphs "a" to"e" of Basis for Qualified Opinion paragraph above in our opinion may have anadverse effect on the functioning of the Company.

f) on the basis of written representations received from the directors as on March312021 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2021 from being appointed as a director in terms of Section164(2) of the Act.

g) The qualifications relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.

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 B'. Our report expresses a modified opinion on the adequacyand operating effectiveness of the internal financial control over financial reporting ofthose companies for reasons stated therein.

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 amended: In 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 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 standalone Ind AS financial statements - Refer Note No. 24 and 25 to thestandalone Ind AS financial statements.

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

iii. There are no amounts which are required to be transferred to the InvestorEducation and Protection Fund by the Company for the year ended March 312021.

for M. Bhaskara Rao & Co.
Chartered Accountants
Firm Registration No. 000459S
V K Muralidhar
Partner
Hyderabad Membership No. 201570
June 30 2021 UDIN : 21201570AAAADY9086

Re: TCI Finance Limited

Annexure A to the Independent Auditors' Report

(Referred to in paragraph '1' under 'Report on Other Legal and Regulatory Requirements'section of our report to the members of TCI Finance Limited of even date)

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

(b) According to the information and explanations given to us all the fixed assetshave been physically verified by the management during the year in accordance withprogramme of verification which in our opinion is reasonable having regard to the sizeof the Company and the nature of the assets. According to the information and explanationsgiven to us no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us the title deeds of theimmovable properties are held in the name of the Company / in the name of the amalgamatedcompanies.

ii. Having regard to the nature of the Company's business paragraph 3(ii) of the Orderrelating to inventories is not applicable.

iii. In our opinion and according to the information and explanations given to us theCompany has granted unsecured loans to two parties covered in the register maintainedunder Section 189 of the Companies Act 2013.

a. The term and conditions of the loans granted by the Company during the year to boththe parties covered in the register maintained under Section 189 of the Companies Act2013 amounting to Rs. Nil Lakhs and the balance outstanding (Gross) as at March 31 2021 -Rs. 5585.55 Lakhs are not prejudicial to the interests of the Company. However duringthe year 2019-2020 loans given to one of the entities aggregating to Rs. 1401.03 Lakhsbecame non performing and has been impaired by the management (Refer Note 37 to thestandalone Ind AS financial statements). With respect to loan given to the other entityrefer to para "b" in " Basis for Qualified Opinion" section of mainreport.

b. Schedule of repayment of principal and payment of interest has been stipulated bythe Company. Receipt of principal and interest from the parties mentioned as per theregister maintained under Section 189 of the Companies Act 2013 is irregular. No interesthas been recognised on the amounts receivable from the entity which became non performingand impaired by the management during the year. With respect to other entity refer para"b" in "Basis for Qualified Opinion" of main report.

c. There are no over dues towards principal and interest for more than ninety days.Refer to para a and b above.

iv. In our opinion and according to the information and explanations given to usprovisions of Section 185 and Section 186 of the Companies Act 2013 are not applicable tothe Company being a Non Banking Financial Institution - a Loan Company. Hence reportingunder the provisions of paragraph 3(iv) of the Order does not arise. Refer Note No 40 ofthe standalone Ind AS financial statements for the details of the transactions with theparties covered under Section 185 and Section 186 of the Companies Act 2013.

v In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits. Accordingly the provisions of paragraph 3(v) ofthe Order does not arise.

vi. In our opinion and according to the information and explanations given to us theCentral Government has not prescribed the maintenance of cost records under Section 148(1) of the Companies Act 2013 for the activities of the Company.

vii. (a) According to the information and explanations given to us and based on theexamination of records of the Company the Company is generally not regular in depositingundisputed statutory dues including Provident Fund Employees' State InsuranceIncome-tax Wealth Tax Sales-tax Service Tax Customs duty Excise Duty Value AddedTax Cess and any other material statutory dues applicable to it with the appropriateauthorities during the year.

(b) Details of dues of Income Tax Customs Duty Excise Duty Value Added Tax and Cesswhich have not been deposited as on March 312021 on account of disputes are as below:

Nature of statute Nature of the dues

Amount (Rs. in Lakhs)

Period to which the amount relates Forum where dispute is pending
Karnataka Sales Tax Tax/Penalty

0.64

1996-1997 Joint Commissioner of Commercial Taxes (Appeals)

viii. In our opinion and according to the information and explanations given to us andbased on the examination of records of the Company the Company has not defaulted inrepayment of dues to financial institutions except as stated below:

Particulars

Amount of default (Rs.)

Period of default (days)

Remarks
HDFC Limited

99.72

4-34

Principle
HDFC Limited

79.46

4-34

Interest

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. The Company has not availed anyterm loans during the year.

x. During the course of our examination of the books and other records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year nor have we been informed of such case by the management.

xi. In our opinion and according to the information and explanations given to us andbased on the examination of records of the Company the Company has paid/ provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with the Schedule V of the Companies Act 2013.

xii. According to the information and explanations given to us and based on ourexamination of the records the Company is not a Nidhi company. Accordingly paragraph3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on theexamination of records of the Company all the transactions with the related parties arein compliance with Section 177 and 188 of the Companies Act 2013 and the details ofrelated party transactions have been disclosed in the standalone Ind AS financialstatements as required by the applicable accounting standards. Refer note 40 to thestandalone Ind AS financial statements.

xiv. According to the information and explanations given to us and based on theexamination of records of the Company the Company has not made preferential allotment orprivate placement of shares or fully or partly Convertible debentures during the year.Hence reporting under the provisions of paragraph 3(xiv) of the Order does not arise.

xv. According to the information and explanations given to us and based on theexamination of records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him during the year. Accordinglyparagraph 3(xv) of the order is not applicable.

xvi. The Company is a Non-Banking Financial Institutions as per Section 451(a) of theReserve Bank of India Act 1934 and obtained the Certificate of Registration.

for M. Bhaskara Rao & Co.
Chartered Accountants
Firm Registration No. 000459S
V K Muralidhar
Partner
Hyderabad Membership No. 201570
June 30 2021 UDIN : 21201570AAAADY9086

Annexure B to the Independent Auditors' report

(Referred to in paragraph '2.f under 'Report on Other Legal and RegulatoryRequirements' section of our report to the members of TCI Finance Limited of even date)

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 TCI FinanceLimited ("the Company") as of March 312021 in conjunction with our audit of thestandalone Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company 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 issued 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 Reportingthe "Guidance Note") issued by ICAI and the Standards on Auditing prescribedunder section 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about 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 standalone Ind AS financial statements whether due to fraudor 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 standalone Ind AS 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 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 standalone Ind AS financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone Ind AS 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.

Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing material weakness have been identified in the operating effectiveness of theCompany's internal financial controls over financial reporting as at March 312021:

a. The Company's internal financial controls system over estimation of diminution inthe carrying value of investments and accrual of potential obligation in case of anoverseas subsidiary was not operating effectively which could potentially result inmisstatement in the financial statements by way of Company not providing for adjustments/provisions if any that may be required.

A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the Company's annual or interim financial statements willnot be prevented or detected on a timely basis.

In our opinion the Company has in all material respects maintained adequate internalfinancial controls over financial reporting as of March 312021 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of internalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India and except for the possible effects of the material weaknessdescribed above on the achievement of the objectives of the control criteria theCompany's internal financial controls over financial reporting were operating effectivelyas of March 31 2021.

Explanatory paragraph

We also have audited in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct the standalone Ind AS financial statements of the Company which comprise the BalanceSheet as at March 31 2021 and the related Statement of Profit and Loss the Statement ofChanges in Equity and the Statement of Cash Flows Statement for the year then ended and asummary of significant accounting policies and other explanatory information. Thesematerial weaknesses were considered in determining the nature timing and extent of audittests applied in our audit of standalone Ind AS financial statements of the Company as atMarch 312021 and this report affects our report dated June 30 2021 on which we haveexpressed a qualified opinion on those standalone Ind AS financial statements.

for M. Bhaskara Rao & Co.
Chartered Accountants
Firm Registration No. 000459S
V K Muralidhar
Partner
Hyderabad Membership No. 201570
June 30 2021 UDIN : 21201570AAAADY9086

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