alchemist ltd share price Auditors report

To the Members of Alchemist Limited

Report on the Audit of Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of Alchemist Limited ("the Company"), which comprise the Balance Sheet as at 31^st March, 2020, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Indian Accounting Standards (Ind AS) specified under section 133 of the Act, of the state of affairs (financial position) of the Company as at 31^st March 2020, and its loss (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

a. Attention is invited to note no. 43 to the standalone financial statements which states that "The Company extends credit from time to time as per market practices. In respect of export receivables amounting to ^ 46,442.79 Lakhs, credit was extended for export sales in the normal course of the business, however it apparently got stuck. Though the Company is regularly following up on the same, has initiated legal recourse and is hopeful of recovering such amount, still considering the principal of conservatism, the Company has made a provision for expected credit loss allowance @ 10% of the outstanding export receivables amounting to ^ 4,644.28 Lakhs and has not recognised unrealised foreign exchange gain/loss on such export receivable and related trade payable during the financial year 2019-20. Hence forth, the Company shall not be accounting for the unrealised foreign exchange loss on such export receivable and related trade payables and the same will only be accounted for on actual realisation/payment"

Further, the Company has stated that the total provision on such doubtful export receivables stands at 20% amounting to ^ 9,288.56 Lakhs as at 31^st March, 2020.

Such export receivables are outstanding for more than three years as at the yearend date; provision @ 20% is made against such doubtful trade receivables. Since the actual realisation of such doubtful export receivable cannot be ascertained, we are unable to comment on the adequacy of the provision of excepted credit loss made by the Company.

In the absence of the information on record, the consequential impact, if any, on the standalone financial statements is not ascertainable.

Though, the Company admits that the export receivable is doubtful of recovery and has made partial provision on such export receivable, still such export receivable and related trade payable stand in the books, hence require recognition of unrealised foreign exchange gain/loss as per the provisions of Ind AS 21, The Effects of Changes in Foreign Exchange Rates. Accordingly, the loss is overstated by % 3,178.87 Lakhs for the year ended 31^st March, 2020 and accordingly the trade receivables and trade payable are understated by %4,329.75 Lakhs and % 1150.88 Lakhs respectively, as at the year ended 31^st March, 2020.

b. Attention is invited to note no. 60 to the standalone financial statements which states that "The working capital limits of ^ 350.00 Lakhs availed from Bank of India for the working capital requirements of the pharmaceutical division has been classified as nonperforming asset (herein referred to as NPA) on 30^th November, 2018. The outstanding as on the date of classification by the bank as NPA was ^ 363.88 Lakhs. The Company has not recognised interest liability on such loan from the day it has become NPA, in line with the practice followed by the respective bank".

The Company has not made provision of interest due on the borrowings from Bank of India, post the date the account was classified as non-performing assets by the bank.

In the absence of the information on record, the consequential impact, if any, on the standalone financial statements is not ascertainable.

c. Attention is invited to note no. 10 and note no. 49 to the standalone financial statements which considers capital advances of ^ 769.70 lakhs as good and recoverable and also states that out of the same, the Company is pursuing legal action in Honourable Kolkata High Court against Medisphere Marketing Limited for recovery of the amount of ^ 459.80 Lakhs outstanding in its books. Further, The Company is hopeful of recovering the above amounts and hence no provision is considered necessary.

The entire capital advances of % 769.70 Lakhs are outstanding for more than three years as at the yearend date and seems doubtful of recovery or adjustment, however, no provision is made against such doubtful capital advances.

In the absence of the information on record, the consequential impact, if any, on the standalone financial statements is not ascertainable.

d. Attention is invited to note no. 8, 13 and 25 to the financial statements state that FDRs, current accounts and cash credit limit with a cumulative debit balance of ^ 106.39 Lakhs and cumulative credit balance of ^ 375.07 Lakhs do not have statements or even confirmation.

In the absence of the information on record, the consequential impact, if any, on the standalone financial statements is not ascertainable.

e. The financial impact arising out of the COVID -19 outbreak are not accounted or reported or disclosed as per the prescribed Accounting Standards, in the financial statements.

In the absence of the information on record, the consequential impact, if any, on the standalone financial statements is not ascertainable.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Emphasis of Matters

a. Attention is invited to note no. 61 to the standalone financial statements which states that "The income tax department has through its order dated 7^th February, 2019 has demanded an amount of ^ 29,129.34 Lakhs in lieu of the assessment carried out by the income tax departments for the assessments years 2009-10 to 2015-16. The Company has not provided for such liability in its books as it has appealed against such demand raised by the income tax department. The liability however, has been reflected as a contingent liability".

b. Attention is invited to note no. 50 to the standalone financial statements which states that "The pharma division of the Company has adjusted trade payables amounting to ^ 380.32 Lakhs (Previous Year ^ 1,021.40 Lakhs) by way of a book entry on account of direct payment to them by some trade receivables or by making direct payment to the suppliers of the supplier from whom the Company is getting the products manufactured as per the Companys specification. Such adjustments is only in the case of the franchise arrangement and in case of a third party manufacturer".

c. Attention is invited to note no. 57 to the standalone financial statements which states that "Cash in hand includes cash amounting to ^ 180.54 Lakhs which was seized by the Income tax authorities during the search and seizure operation u/s 132 of the Income Tax Act, 1961 during the month of June, 2014".

d. Attention is invited to note no. 53 to the standalone financial statements which states that "The balances of majority of the Trade Receivables, Trade Payables and Loan made and received, are subject to confirmation and as such their balances are reflected in the Balance Sheet as appearing in the books, pending reconciliation, the net effect is unascertainable".

e. Attention is invited to note no. 62 to the standalone financial statements which states that "The subsidiary company, Alchemist Hospitality Group Limited is in the process of voluntary strike off. The forms required to be filed with the Registrar of Companies have been filed and approval is awaited".

Our opinion is not qualified in respect of the matters as stated in the Emphasis of Matters paragraph.

Key Audit Matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matters described in the Basis for Qualified Opinion section, we have determined the matter described below to be the key audit matter to be communicated in our report.

Key audit matter	How our audit addressed the key audit matter
Going concern assessment
Attention is invited to note no. 58 to the standalone financial statements which states that "The accumulated losses of the Company had exceeded its net worth. The companys operations were adversely affected in earlier financial years due to sluggish market demand, working capital getting stuck in trade receivables and loss making manufacturing activity of the pharmaceutical unit. The Company has initiated legal recourse against the defaulting customers and is regularly following up on the same and the Company has recently even closed down its loss making pharmaceutical manufacturing. The units of the company now continue to operate at satisfactory capacity utilization levels and are generating positive Earnings before Interest Depreciation Tax and Amortization (EBIDTA). With strong management focus on strategic initiatives for cost rationalization, optimum product mix and efficient plant operations, the management believes that accumulated losses would reasonably be paired, in due course. The Company can even liquidate its non-core strong fixed assets cover to support the operations in times of any need. Further, the Company has the backing of the strong group because of which the Company has been able to pay off its borrowings from Punjab National Bank and support the operations of the Company even though the Company has incurred losses in the recent past. The financial statements, as such have been prepared on a going concern basis".	Our audit procedures were focused on obtaining sufficient appropriate audit evidence that the going concern assessment made by the Company is not materially misstated. These procedures included, but were not limited to, the following:
	We analysed managements report to gain an understanding of the inputs and process underpinning the cash flow model prepared for the purpose of the going concern assessment.
	We reviewed the operating performances of the various units of the Company to evaluate whether or not they are actually generating positive EBIDTA.
	We assessed the possible mitigating actions identified by management in the event that actual cash flows are below forecast.
The availability of sufficient funding and the testing of whether the company will be able to continue meeting its obligations under the financing covenants are important for the going concern assumption and, as such, are significant aspects of our audit. This test or assessment is largely based on the expectations of and the estimates made by management. The expectations and estimates can be influenced by subjective elements such as estimated future cash flows, forecasted results and margins from operations. Estimates are based on assumptions, including expectations regarding future developments in the economy and the market.

Information other than the Financial Statements and Auditors Report thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditors report thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

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

Managements Responsibility for the Standalone Financial Statements

The Companys Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of

adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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 financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

• Obtain an understanding of internal control relevant to the audit in order to design 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 has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by section 197(16) of the Act, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

2. As required by the Companies (Auditors 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 A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

3. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and except for the matters described in the Basis for Qualified Opinion section and Emphasis of Matters section above, have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) Except for the matter described in the Basis for Qualified Opinion paragraph, in our opinion, proper books of account as required by law have been kept 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 Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

(d) Except for the matter described in the Basis for Qualified Opinion section, in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

(e) The matters described in the Basis for Qualified Opinion section and Emphasis of Matters section above, in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on 31^st March, 2020 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2020 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion section above.

(h) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B".

(i) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its standalone financial statements - Refer note no. 45 to the standalone financial statements.

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

iii. Amount of % 12.61 Lakhs was required to be transferred during the previous year to the Investor Education and Protection Fund by the Company but the same has not been transferred till date.

	for Anu and Associates
	Chartered Accountants
	Firms Registration Number: 019624N
	Sd/-
	CA. Parveen Kumar
	Partner
	Membership Number: 531655
Place of Signature: New Delhi
Date: 30th July, 2020
UDIN: 20531655AAAADL4334

Annexure - A to the Independent Auditors Report

Referred to in paragraph 2 under Report on other Legal and Regulatory Requirements section of our report of even date. We report that:

(i) (a) In our opinion and according to the information and explanations given to us, the Company has maintained fixed asset register

however the same does not specify the quantity and exact location of the fixed assets.

(b) In our opinion and according to the information and explanations given to us, the Company has not physically verified the fixed assets during the year. In our opinion the periodicity of the physical verification is not reasonable having regard to the size of the Company and nature of its assets.

(c) In our opinion and according to the information and explanation given to us, the Company holds valid title for all the immovable properties in the books of the Company except for one land valuing % 55.59 Lakhs, the title deed of which has not been produced before us for our verification of the same.

(ii) In our opinion and according to the information and explanations given to us, inventories have been physically verified during the year by the management at reasonable intervals. The material discrepancies, if any, noticed have been properly dealt with in the books of accounts.

(iii) According to the information & explanations given to us, the Company has granted loans, secured or unsecured outstanding at year end at ^ 62.43 Lakhs to 7 parties covered in the register maintained under section 189 of the Act.

(a) It has been informed to us that the terms of repayment have not been defined, however, they are repayable on the mutual agreement of both the parties involved. Moreover the loans granted are unsecured and interest free, thus the terms of such loans are prejudicial to the interests of the Company.

(b) All the loans made are interest free and schedule of repayment are not defined, hence the timeliness of repayment cannot be commented upon.

(c) As mentioned in the above paragraphs, since terms of repayment of loans are not defined, we are unable to comment on the overdue amount.

(iv) The Company has given loans/amount recoverable to/from two parties whose yearend outstanding balance is % 19.07 Lakhs, in contravention of provisions of Section 185 of the Companies Act, 2013.

Further, the Company has given interest free loans/amount recoverable to/from 11 parties whose yearend outstanding balance is % 876.64 Lakhs which is in contravention of sub section 7 of section 186 of the Companies Act, 2013 which requires that "No loan shall be shall be given under this section at a rate of interest lower than the prevailing yield of one year, three year, five year or ten year Government Security closest to the tenor of the loan".

(v) The Company has not accepted deposits. Hence the provisions of Section 73 to 76 or any other relevant provisions of the Act and the rules framed there under are not applicable to the Company.

(vi) The central government has not prescribed maintenance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013 in respect of the activities of the company.

(vii) (a) Based on our audit procedures and on the information and explanations given by the management, we report that there

has been delays in deposit of undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Goods and Service Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and any other statutory dues, to the extent applicable, during the financial year. According to the information and explanations given to us, statutory dues amounting to % 153.04 Lakhs were outstanding as on 31^st March, 2020, for a period of more than six months from the date it became payable.

(b) Details of statutory dues which have not been deposited as on 31^st March, 2020 by the Company on account of dispute is given below:

Nature of Tax	Name of the Statute	Period to which amount relates	Amount demanded (In Lakhs)	Amount deposited (In Lakhs)	Pending deposit	Forum
Income Tax	Income TaxAct, 1961	2007-08	5.11	0.00	5.11	Assessing Officer
Income Tax	Income Tax Act, 1961	2008-09 to 2014-15	29129.34	0.00	29129.34	CIT(Appeals), New Delhi
Excise Duty	Central Excise Act, 1944	December, 2007 to September, 2012	173.55	63.13	110.42	Supreme Court
Total			29308.00	63.13	29244.81

ALCHEMIST LIMITED

(viii) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, during the year there have been delays in repayment of dues by the Company to financial institutions, banks or debenture holders. The details of the continuing default as on 31^st March, 2020 in repayment of principle and interest is as follows:

Details of continuing default as on 31 march 2020

Name and Bank-Type of loan	Sanction Amount	Default Amount as on 31st March 2020
Punjab National Bank-Term Loan	2,100.00	52.74
Bank Of India-Working Capital Loan	350.00	363.88
Total	2,450.00	416.62

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year, therefore, the provisions of para 3(ix) of the Order is not applicable to the Company.

(x) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

(xi) Based on the audit procedures performed and the information and explanations given to us, we report that the managerial remuneration has been paid or provided in accordance with requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company, therefore, the provisions of para 3(xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him, therefore, the provisions of para 3(xv) of the Order is not applicable to the Company.

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

for Anu and Associates

Chartered Accountants Firms Registration Number: 019624N

Sd/-

CA. Parveen Kumar

Partner

Membership Number: 531655

Place of Signature: New Delhi Date: 30^th July, 2020 UDIN: 20531655AAAADL4334

Annexure - B to the Independent Auditors Report

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

We have audited the internal financial controls over financial reporting of Alchemist Limited ("the Company") as of 31^st March, 2020 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March, 2020, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the ICAI.

for Anu and Associates

Chartered Accountants Firms Registration Number: 019624N

Sd/-

CA. Parveen Kumar

Partner

Membership Number: 531655

Place of Signature: New Delhi Date: 30^th July, 2020

UDIN: 20531655AAAADL4334