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Vardhman Polytex Ltd.

BSE: 514175 Sector: Industrials
NSE: VARDMNPOLY ISIN Code: INE835A01011
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OPEN 21.20
CLOSE 21.20
VOLUME 569
52-Week high 29.03
52-Week low 5.70
P/E
Mkt Cap.(Rs cr) 47
Buy Price 21.20
Buy Qty 248.00
Sell Price 21.35
Sell Qty 74.00

Vardhman Polytex Ltd. (VARDMNPOLY) - Auditors Report

Company auditors report

To The Members of Vardhman Polytex Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements ofVardhman Polytex Limited ("the Company") which comprise the Balance Sheet as atMarch 312020 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year ended onthat date and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us except for the effects of the matter stated in the "Basisfor Qualified Opinion" section of this report the aforesaid standalone financialstatements give the information required by the Companies Act 2013 ("the Act")in the manner so required and give a true and fair view in conformity with the IndianAccounting Standards prescribed under section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended ("Ind AS") and otheraccounting principles generally accepted in India of the state of affairs of the Companyas at March 312020 the profit and total comprehensive income changes in equity and itscash flows for the year ended on that date.

Basis for Qualified opinion

Note No. 50 of the Standalone Ind AS financial statements regardingcrediting a profit of Rs 396.44 lakhs due on payment of FCCB liability to the statement ofprofit & loss during the year ended March 312017 which should have been credited inthe statement of profit & loss on payment of FCCB liability which is still outstandingto the tune of 554160 USD as on March 312020 is not in compliance with the requirementsof para 27 of the Ind AS 1- Presentation of Financial Statements w.r.t. preparation offinancial statements on accrual basis. Consequently the profit and loss has beenoverstated by the above mentioned amount.

We further report that had the impact of our observations made in paraabove been considered the net loss and the net worth for the period ended would haveincreased and decreased respectively by Rs. 396.44 lakhs.

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 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 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 we have obtained is sufficient and appropriateto provide a basis for our qualified audit opinion on the standalone Ind AS financialstatements.

Emphasis of Matter

We draw attention to Note 52 to the Standalone Ind AS FinancialStatements which describes the uncertainties and the impact of Covid-19 pandemic on theCompany's operations and results as assessed by the management. Our opinion is notmodified 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 Ind AS financial statements forthe financial year ended March 31 2020. These matters were addressed in the context ofour audit of the standalone Ind AS financial statements as a whole and in forming ouropinion thereon and we do not provide a separate opinion on these matters. We havedetermined the matters described below to be the key audit matters to be communicated inour report.

We have determined the matter described below to be the key auditmatter to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the standalone Ind AS financialstatements section of our report including in relation to this matter. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the standalone Ind AS financial statements. The resultsof our audit procedures including the procedures performed to address the matter belowprovide the basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key Audit Matter Auditor's Response
1. Evaluation of uncertain tax positions The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Principal Audit Procedures: Obtained details of completed tax assessments and demands till the year ended March 31 2020 from management. We involved our internal experts to challenge the management's underlying assumptions in estimating the tax provision and the possible outcome of the disputes. Our internal experts also considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions.
Refer Notes to the Standalone Ind AS Financial Statements
2. On account of invocation of Corporate Guarantee of the company towards it erstwhile subsidiary M/s. F.M. Hammerle Textiles limited a provision of Rs 1 7685.13 lacs was booked during the March 2018 quarter. This provision has been reversed in the current year as the Corporate Guarantee of the Company has been released by State Bank of India after depositing Rs 250 lacs as demanded by bank. Our audit procedures include the following substantive procedures
- Obtained an understanding of the matter.
- The audit team along with our internal experts:
- read and analyzed select key correspondences and consultations carried out by the Company
- discussed with appropriate senior management the issue in complete detail
- Evaluated the settlement letter received in order to take into consideration all minute details.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors are responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the standalone Ind AS financial statements and our auditor's reportthereon.

Our opinion on the standalone Ind AS 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 Ind AS financialstatements our responsibility is to read the other information and in doing so considerwhether such other information is materially inconsistent with the Standalone Ind ASfinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone Ind ASfinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing 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 standalone IndAS financial statements that give a true and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of

accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities 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 Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate 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 controls.

• Obtain an understanding of internal financial controls 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 management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are

required to draw attention in our auditor's report to the relateddisclosures in the standalone financial statements or if such disclosures are inadequateto modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind As financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

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 to communicatewith them all relationships and other matters that may reasonably be thought to bear onour 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 precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matter

Due to the COVID-19 related lockdown we were not able to attend thephysical verification of inventory carried out by the management subsequent to the yearend. Consequently we have performed alternate procedures to audit the existence ofinventory as per the guidance provided in SA 501 "Audit Evidence - SpecificConsiderations for Selected Items" and have obtained sufficient appropriate auditevidence to issue our unmodified opinion on these Standalone Financial Statements. Ourreport is not modified in respect of this matter.

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 of the Act we give in the "Annexure 1" a statement on thematters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act based on our audit wereport that :

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone Ind AS financial statementscomply with the Ind AS specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2015.

e) On the basis of the written representations received from thedirectors as on March 312020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312020 from being appointed as a director in termsof Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure 2".

g) With respect to the matter to be included in the Auditors Rs Reportunder section 197(16):

In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us :

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements. Refer note 40 to thestandalone financial statements.

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the company.

For Romesh K Aggarwal & Associates
Chartered Accountants
FRN - 000711N
Sd/-
Ruchir Singla
Place - Ludhiana Partner
Dated - July 10 2020 M. No. 519347
UDIN - 20519347AAAAAP7776

Annexure 1 referred to in paragraph 1 under the heading “Report onother legal and regulatory requirements" of our report of even date

(i) In respect of the Company's fixed assets:

(a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

(b) The Company has a program of verification to cover all the items offixed assets in a phased manner which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the program certain fixedassets were physically verified by the management during the year. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us therecords examined by us and based on the examination of the conveyance deeds / registeredsale deed provided to us we report that the title deeds comprising all the immovableproperties of land and buildings which are freehold are held in the name of the Companyas at the balance sheet date. In respect of immovable properties of land and building thathave been taken on lease and disclosed as fixed assets in the standalone financialstatements the lease agreements are in the name of the Company.

(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 Companies Act 2013.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 and 186 of theAct in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) The Company has not accepted deposits during the year and does nothave any unclaimed deposits as at March 312020 and therefore the provisions of theclause 3 (v) of the Order are not applicable to the Company.

(vi) We have broadly reviewed the cost records maintained by theCompany pursuant to the Companies (Cost Records and Audit) Rules 2014 as amendedprescribed by the Central Government under sub-section (1) of Section 148 of the Act andare of the opinion that prima facie the prescribed cost records have been made andmaintained.

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

(a) The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees Rs State Insurance Income Tax Goodsand Service Tax Customs Duty Cess and other material statutory dues applicable to itwith the appropriate authorities.

(b) There were no undisputed amounts payable in respect of ProvidentFund Employees Rs State Insurance Income Tax Goods and Service Tax Customs Duty Cessand other material statutory dues in arrears as at March 31 2020 for a period of morethan six months from the date they became payable.

(c) Details of dues of Income Tax Sales Tax Service Tax Excise Dutyand Value Added Tax which have not been deposited as at March 312020 on account ofdispute are given below :

Name of the statute Nature of dues Period to which it pertains Amount in dispute Forum where dispute is pending Amount deposited Matter of disputed
Central Excise Act1944 Excise Duty 1997-98 42.34 Hon'ble Punjab & Haryana High Court Chandigarh 42.34 Difference on account of loose and packed yarn
Excise Duty 2004-05 28.93 CESTAT New Delhi - Cenvat credit on input has been reversed.
Excise Duty 2008-09 103.2 Additional Commissioner C.E. Commissionerate Chandigarh Rebate on exports.
Excise Duty 2009-10 1.14 Joint Secretary to Govt. of India Ministry of Finance New Delhi Rebate on exports.
Excise Duty 2014-15 168.55 Hon'ble Punjab & Haryana High Court Chandigarh - Rebate on exports.
Excise Duty 2014-15 22.42 Joint Secretary to Govt. of India Ministry of Finance New Delhi
Excise Duty 2017-18 50.63 Joint Secretary to Govt. of India Ministry of Finance New Delhi
Service tax act Service tax 2004-05 2005-06 and 2006 - 07 14.11 CESTAT New Delhi 1.41 Service Tax on Overseas commission
Service tax 2009-10 1.27 CESTAT New Delhi - SCN for Service Tax refund claimed.
Income Tax Act Income tax 1998-99 to 2002-2003 2007-08 779.59 CIT (Appeals) Ludhiana 25.69 Disallowance of deduction under section 80HHC & 80M 44AD & 68 of Income Tax Act Disallowance of Interest u/s 36(1) (iii) for investment in subsidiary companies Disallowance of depreciation on profit on buy back of FCCB Bonds.
Income tax 2004- 2005 2005- 06 2006- 2007 2011-12 528.22 ITAT Chandigarh 41.66 Disallowance of Interest u/s 36(1 )(iii) for investment in subsidiary companies computation u/s 14A Interest disallowance on advances to subsidiary companies u/s 36(1 )(iii) Disallowance of depreciation on profit on buy back of FCCB Bonds Subscription of Share Capital-Section 68
Income tax 1998-99 to 2001-2002 2003- 2004 2004- 2005 2008 - 2009 2009 - 2010 2010 - 2011 527.14 Hon'ble Punjab & Haryana High Court Chandigarh 152.65 Disallowance of deduction under section 80HHC 80IB & 80M Disallowance of Interest u/s 36(1 )(iii) & as revenue expenditure or capital expenditure though matter decided by Hon'ble SC in our favor and levy of interest u/s 234 D Disallowance u/s 14-A.
Punjab General Sales Tax Act Punjab Vat 2000-01 2001-02 17.61 DETC Appeal 4.4 Incremental production in respect of additional fixed capital investment.
Punjab Vat 2005-06 0.48 DETC Patiala 0.12
Punjab Vat 2006-07 33.08 DETC (Appeals) Faridkot (Pb.) - Disallowance of ITC in respect of purchases from M/s Chabra Ind. & ITC on Diesel.
Punjab Vat 2008-09 62.14 VAT Tribunal Punjab Disallowance of ITC on Diesel & reversal of entry tax in respect of branch transfer & 19(5)
Punjab Vat 2009-10 79 VAT Tribunal Punjab ITC on diesel Reversal of 19(5) in exemptec units reversal of entry tax in respect of branch transfer & 19(5).
Punjab VAT 2011-12 18 DETC Appeals Faridkot 4.5 Interest on additional demand.
Punjab VAT 2012-13 16.09 DETC Appeals Faridkot 4.02 Interest on additional demand.
Punjab VAT 2014-15 3.8 DETC Appeals Faridkot - Vehicle detained for not having billing documents.
Wealth Tax Act Wealth Tax A.Y. 1998-99 2.47 ITAT Chandigarh - Dispute on valuation of land

(viii) In our opinion and according to the information and explanationsgiven to us the Company has defaulted in the repayment of dues to banks as follows:

Working Capital Term Loan

Name of Bank Sanction Amount Default Amount Overdrawn Start
Canara Bank 180400000 P129888000 June 2017
State Bank of India 148300000 P111225000 June 2017
State Bank of Patiala 34500000 P 25875000 June 201 7
Punjab National Bank 42300000 P 30456000 July 2017
Bank of Baroda 34200000 P26334000 Febuary 201 7
Punjab & Sind Bank 22800000 P15540123 November 201 7
Axis Bank 20400000 P10710000 September 2014
Bank of India 42200000 P32204195 Febuary 201 7
Corporation Bank 20300000 P13636000 September 201 7

Working Capital Term Loan

Name of Bank Sanction Amount Default Amount Overdrawn Start
Andhra Bank 62700000 P45595997 June 2017
United Bank of India 36000000 P27720000 January 201 7
Term Loan
Name of Bank Sanction Amount Default Amount Overdrawn Start
Canara Bank 260100000 P197277000 June 2017
State Bank of India 56682000 P41811989 June 2017
Punjab National Bank 420000000 P283569400 July 2017
Bank of India 61100000 P30603823 Febuary 201 7
Bank of Baroda 309390700 P195949108 Febuary 2017
Corporation Bank 69700000 P53910249 September 201 7
United Bank of India 387555000 P259043532 January 201 7
Bank of Maharashtra 234480000 P 180549600I 65977644 March 201 7
Jammu & Kashmir Bank 236250000 P 156542175I 62864644 June 201 7
Allahabad Bank 47174000 P 31345480I 10726208.78 March 201 7

Cash Credit (CC)

Name of Sanction Default Overdrawn
Bank Amount ( Rs In Crores) Amount ( Rs In Crores) Start
Canara Bank 49.94 P 61.92I 27.87 Same as above
State Bank of India 39.63 P 27.19I 17.93 Same as above
Punjab National Bank 10.62 P 11.62I 15.42 Same as above
Bank of Baroda 12.08 P 15.38 I 14.11 Same as above
Punjab & Sind Bank 5.92 P 3.21I 1.10 Same as above
Axis Bank 5.45 P 2.76I 0.44 Same as above
Bank of India 10.62 P 13.62I 7.19 Same as above
Corporation Bank 5.13 P 5.90I 3.36 Same as above
Andhra Bank 28.10 P 30.18I 3.48 Same as above
United Bank of India 8.85 P 9.18I 9.77 Same as above

Interest for term loans and Working capital term loans was charged fromCC itself so the default interest shown under CC includes interest default on term loansand Working capital term loans. Further the total interest default amount includes Rs75.99 Cr. which has not been charged by banks after the NPA date but the same is beingcharged in books of accounts.

(ix) The Company has not raised moneys by way of initial public offeror further public offer (including debt instruments) or term loans and hence reportingunder clause 3 (ix) of the Order is not applicable to the Company.

(x) To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company or 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 withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Act.

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

(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 Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards.

(xiv) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly paid convertible debenturesand hence reporting under clause (xiv) of the Order is not applicable to the Company.

(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 persons connected to its directors and hence provisions of section192 of the Companies Act 2013 are not applicable to the Company.

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

For Romesh K Aggarwal & Associates
Chartered Accountants
FRN - 000711 N
Sd/-
Ruchir Singla
Place - Ludhiana Partner
Dated - July 10 2020 M. No. 519347
UDIN - 20519347AAAAAP7776

ANNEXURE 2 to the Independent Auditor's Report of even date on theStandalone Ind As Financial statements

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 Vardhman Polytex Limited ("the Company”) as of March 312020 inconjunction 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 Board of Directors of the Company is responsible for establishingand maintaining 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 internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note”) issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem over financial reporting of the Company.

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 312020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Romesh K Aggarwal & Associates
Chartered Accountants
FRN - 000711N
Sd/-
Ruchir Singla
Place - Ludhiana Partner
Dated - July 10 2020 M. No. 519347
UDIN - 20519347AAAAAP7776