ashok leyland ltd share price Auditors report


To the Members of Ashok Leyland Limited

Report on the Audit of the Standalone financial statements

Opinion

1.We have audited the accompanying standalone financial statements of Ashok Leyland Limited (“the Company"), which comprise the Balance Sheet as at March 31, 2023, and 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 then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

2.In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements 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 accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and total comprehensive income (comprising of profit and other comprehensive loss), changes in equity and its cash flows for the year then ended.

Basis for Opinion

3.We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the “AuditorRss Responsibilities for the Audit of the standalone 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 standalone financial statements under the provisions of the Act and the Rules thereunder, 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 opinion.

Key audit matters

4.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.

Key audit matter How our audit addressed the key audit matter
I. Impairment
a. Carrying value of Investments in equity instruments of subsidiaries, joint ventures and associates As part of our audit, our procedures included the following:
(Refer to Note 1B.17, Note 1B.11 and Note 1C to the standalone financial statements regarding the recognition, valuation and disclosure methods of equity instruments in subsidiaries, joint ventures and associates, RsImpairment LossesRs and RsCritical accounting judgements and key sources of estimation uncertaintyRs respectively) • We obtained an understanding and assessed the design, implementation and operating effectiveness of managementRss relevant internal controls to identify whether there are any indicators of impairment and where such indicators exists, the method by which the recoverable amount is determined by the management. Specifically, we focused on management controls to conclude on the appropriateness of future cash flows (including terminal cash flow) and key assumptions used in arriving at the recoverable amount and fair value, as applicable.
In the standalone financial statements of the Company, the gross carrying value of equity investments in subsidiaries, joint ventures and associates is Rs 3,971.74 crores against which a cumulative provision for impairment of Rs 515.62 crores is carried as at March 31, 2023.
• We evaluated the following:
- Terminal growth rate by comparing with the long-term outlook based on the relevant macroeconomic outlook for the geography in which the entities are operating.
Determination of carrying value of investments is a key audit matter as the amounts are significant to the standalone financial statements and the determination of recoverable value and / or impairment assessment involves significant management judgement.
- Board approved budgets considering growth and other cash flow projections provided by the Companys management and compared these with the actual results of earlier years to assess the appropriateness of forecast.
The key inputs and judgements involved in the model for impairment assessment of investments include future cash flows of the respective entities, the discount rate and the long-term growth rates used.
- The competence, capabilities and objectivity of the managementRss expert involved in the valuation process.
b. Fair value of investments in other equity and in preference instruments • We along with the auditorsRs experts evaluated the appropriateness of the measurement model and reasonableness of key assumptions like terminal growth rate and discount rate.
(Refer to Note 1B.17 and Note 1C to the standalone financial statements regarding the recognition, valuation and disclosure methods of equity instruments in othersRs and RsCritical accounting judgements and key sources of estimation uncertaintyRs respectively)
• We performed sensitivity tests on the model by analysing the impact of using other possible growth rates and discount rates within a reasonable and foreseeable range.
• We evaluated the adequacy of the disclosures made in the standalone financial statements.
In the standalone financial statements of the Company, Investment in other equity and preference share instruments are Rs 174.79 crores and Rs 236.62 crores respectively, carried at fair value, and where no listed price in an active market is available.
Based on the above procedures performed, we did not identify any significant exceptions in the managementRss assessment in relation to the carrying value of equity investments in subsidiaries, joint ventures, and associates, fair value of investment in other equity instruments and that of fair value of investment in preference instruments and the related disclosures thereof.
The valuation of these other equity instruments and preference share investments are a key audit matter as the determination of fair value involves significant management judgement as no active market, observable inputs are available.
The key inputs and judgements involved in the model for fair value assessment of investments include future cash flows of the respective entities, the discount rate and the long-term growth rates used.
II. Assessment of provision for warranty obligation As part of our audit, our procedures included the following:
(Refer to Note 1B.14, Note 1.19, Note 1.25 and Note 1C to the standalone financial statements regarding the RsProvisions - WarrantiesRs for recognition and valuation methods, Non-Current Provisions and Current Provisions respectively, and RsCritical accounting judgements and key sources of estimation uncertainty - Provision for product warrantyRs respectively) • We obtained an understanding and assessed the design, implementation and operating effectiveness of managementRss relevant internal controls with regards to the appropriateness of recording of warranty claims, provisioning of warranty, and the periodic review of provision created.
• We verified the appropriateness of the process and controls around IT systems as established by the management. Specifically, we focused on controls around periodic review of warranty provision and that of the appropriateness and adequacy of provision.
In the standalone financial statements, the Company has recognised a provision of Rs 652.32 crores for warranty obligations as on March 31, 2023.
We determined this matter as key audit matter since the product warranty obligations and estimations thereof are determined by management using a model which incorporates historical information on the type of product, nature, frequency and average cost of warranty claims, the estimates regarding possible future incidences of product failures and discount rate. Changes in estimated frequency and amount of future warranty claims can materially affect warranty expenses.
• We evaluated the model used by the management for provisioning of warranty to evaluate the appropriateness of the methodology followed by the management and the mathematical accuracy of the model. To this effect, we evaluated the following:
- the inputs to the model on a sample basis
- estimation of expected pattern of future claims and estimated replacement cost
- computation of provision for warranty costs
- computation for determining the present value in the case of warranty for periods exceeding one year
- managementRss estimation process by performing a lookback analysis for warranty costs accruals made in prior year
• We evaluated the adequacy of the disclosures made in the standalone financial statements.
Based on the above audit procedures performed, we did not note any material exceptions with regard to the management assessment of provision for warranty costs and the related disclosures thereof.

Other Information

5.The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report (i.e. Boards report, Report on Corporate Governance and Management discussion and Analysis report), but does not include the standalone financial statements and our auditorsRs report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do 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.

Responsibilities of management and those charged with governance

for the standalone financial statements

6.The Companys Board of Directors is responsible for the matters stated in Section 134(5) of 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, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified 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 of 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.

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

AuditorRss responsibilities for the audit of the standalone financial statements

8.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 auditorsRs 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 SAs 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.

9.As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

•Identify and assess the risks of material misstatement of the standalone 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 with reference to standalone financial statements 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 managementRss 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 auditorsRs report to the related disclosures in the standalone 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 auditorsRs 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 standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

10.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.

11.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.

12.From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorsRs 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

13.As required by the Companies (AuditorRss Report) Order, 2020 (“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 B a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

(a)We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b)In our opinion, proper books of account as required by law have been kept by 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 Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

(d)In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act.

(e)On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.

(f)With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A".

(g)With respect to the other matters to be included in the AuditorRss Report in accordance with Rule 11 of the

Companies (Audit and Auditors) Rules, 2014 (as amended), 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 3.9 to the standalone financial statements.

ii.The Company was not required to recognise a provision as at March 31, 2023 under the applicable law or accounting standards, as it does not have any material foreseeable losses on long-term contract including derivative contracts.

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

iv.(a) The management has represented that, to the

best of its knowledge and belief, as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 3.19 to the standalone financial statements);

(b)The management has represented that, to the best of its knowledge and belief, as disclosed in the notes to the accounts, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 3.19 to the standalone financial statements); and

(c)Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

v.The dividend declared and paid during the year by the Company is in compliance with Section 123 of the Act.

vi.As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (as amended), which provides for books of account to have the feature of audit trail, edit log and related matters in the accounting software used by the Company, is applicable to the Company only with effect from financial year beginning April 1, 2023, the reporting under clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), is currently not applicable.

15.The Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

For Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number : 304026E/E-300009

A.J.Shaikh

Partner

Membership Number : 203637 UDIN : 23203637BGXOZF6371

Place : Chennai Date : May 23, 2023

ANNEXURE A TO INDEPENDENT AUDITORSRs REPORT

Referred to in paragraph 14 (f) of the Independent AuditorsRs Report of even date to the members of Ashok Leyland Limited on the standalone financial statements for the year ended March 31, 2023

Report on the Internal Financial Controls with reference to Financial Statements under clause (i) of sub-section 3 of Section 143 of the Act

1.We have audited the internal financial controls with reference to financial statements of Ashok Leyland Limited (“the Company") as of March 31, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

ManagementRss Responsibility for Internal Financial Controls

2.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 (“the Guidance Note") 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 Act.

AuditorsRs Responsibility

3.Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act 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 with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

4.Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, 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 auditorRss judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5.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 with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6.A Companys internal financial controls with reference to financial statements 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 controls with reference to financial statements 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 with reference to financial statements

7.Because of the inherent limitations of internal financial controls with reference to financial statements, 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 with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8.I n our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2023 , 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 issued by ICAI.

For Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number : 304026E/E-300009

A.J.Shaikh

Partner

Membership Number : 203637

UDIN : 23203637BGXOZF6371

Place : Chennai

Date : May 23, 2023

ANNEXURE B TO INDEPENDENT AUDITORSRs REPORT

Referred to in paragraph 13 of the Independent AuditorsRs Report of even date to the members of Ashok Leyland Limited on the standalone financial statements as of and for the year ended March 31, 2023

i. (a)(A) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of property, plant and equipment.

(B) The Company is maintaining proper records showing full particulars of intangible assets.

(b)The property, plant and equipment are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the property, plant and equipment has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c)The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in Note 1.1 on property, plant and equipment and Note 1.1A on right-of-use asset, to the standalone financial statements, are held in the name of the Company, except for the following:

Description of property Gross carrying value (Rs Crores) Held in the name of Whether

promoter, director or their relative or employee

Period held (i.e date of capitalisation) Reason for not being held in the name of the Company
Ennore, Tamil Nadu - Freehold land 81.00 Hinduja Foundries Limited No Refer Note 1 below Refer Note 1.1 of the standalone financial statements
Uppal, Telangana - Freehold land 123.00 Hinduja Foundries Limited No Refer Note 1 below Refer Note 1.1 of the standalone financial statements
Mallavalli, Andhra Pradesh - Freehold land 13.02 Agreement for sale is registered in the name of the Company. Final conveyance deed is to be executed. No March 2018 Refer Note 1.1 of the standalone financial statements
Sriperumbudur, Tamil Nadu - Leasehold land 11.47 Hinduja Foundries Limited No Refer Note 1 below Refer Note 1.1A of the standalone financial statements
Pillaipakkam, Tamil Nadu - Leasehold land 48.96 Ashok Leyland Nissan Vehicles Limited No Refer Note 2 below Refer Note 1.1A of the standalone financial statements
Bhandara, Maharashtra - Leasehold land 0.01 Ashok Leyland Limited (under regularisation) No May 1982 Refer Note 1.1A of the standalone financial statements

Note 1 - Hinduja Foundries Limited (amalgamating company) merged with the Company effective October 01, 2016 pursuant to the order received from National Company Law Tribunal on April 24, 2017.

Note 2 - Ashok Leyland Nissan Vehicles Limited (amalgamating company) merged with the Company effective April 01, 2018 pursuant to the order received from National Company Law Tribunal on December 17, 2018.

(d)The Company has chosen cost model for its property, plant and equipment (including right-of-use asset) and intangible assets. Consequently, the question of our commenting on whether the revaluation is based on the valuation by a registered valuer, or specifying the amount of change, if the change is 10% or more in the aggregate of the net carrying value of each class of property, plant and equipment (including right-of-use asset) or intangible assets does not arise.

(e)Based on the information and explanations furnished to us, no proceedings have been initiated on or are pending against the Company for holding benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) (formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)) and Rules made thereunder, and therefore the question of our commenting on whether the Company has appropriately disclosed the details in its standalone financial statements does not arise.

ii. (a) The physical verification of inventory excluding stocks with third parties has been conducted at reasonable intervals by the Management during the year and, in our opinion, the coverage and procedure of such verification by Management is appropriate. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not 10% or more in aggregate for each class of inventory.

(b)During the year, the Company has been sanctioned working capital limits in excess of Rs 5 crores, in aggregate, from banks and financial institutions on the basis of security of current assets. The Company has filed quarterly returns or statements with such banks and financial institutions, which are in agreement with the unaudited books of account (Also Refer Note 3.6.1 to the standalone financial statements).

iii.(a) The Company has made investments in four companies and eight mutual funds and granted unsecured loan to one company and stood guarantee to three companies. The aggregate amount during the year, and balance outstanding at the balance sheet date with respect to such loans or advances and guarantees or security to subsidiaries, joint ventures and associates and to parties other than subsidiaries, joint ventures and associates are as per the table given below:

Amount in Rs Crores

Guarantees Security Loans Advances in nature of loans
Aggregate amount during the year
Subsidiaries 463.39 - 200.00 -
Joint Ventures - - - -
Associates - - - -
Others - - - -
Balance outstanding as a balance sheet date
Subsidiaries 885.84 - 200.00 -
Joint Ventures 6.88 - - -
Associates - - - -
Others - - - -

(Also Refer Note 3.8 to the standalone financial statements)

(b)In respect of the aforesaid investments, guarantees and loans, the terms and conditions under which such loans were granted, investments were made, guarantees provided are not prejudicial to the Companys interest.

(c)In respect of the aforesaid loan, the schedule of repayment of principal and payment of interest hasbeen stipulated,andtheparties

are repaying the principal amounts, as stipulated, and are also regular in payment of interest as applicable.

(d)In respect of the aforesaid loan, there is no amount which is overdue for more than ninety days.

(e)Following loan was granted to one step down subsidiary, which has fallen due during the year andwas extended.Further,nofresh

loans was granted to step down subsidiary to settle the existing loans / advances in nature of loan.

Name of the parties Aggregate amount of dues renewed or extended (Rs Crores) Percentage of the aggregate to the total loans granted during the year
Switch Mobility Automotive Limited 200 100%

(Also Refer Note 1.12 (e) to the standalone financial statements)

(f)The loans granted during the year to related parties had stipulated the scheduled repayment of principal and payment of interest and the same were not repayable on demand. Further there are no loans / advances in nature of loans which were granted during the year to promoters.

iv.In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it, as applicable.

v.The Company has not accepted any deposits or amounts which are deemed to be deposits referred in Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vi.Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii.(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including goods and services tax, provident fund, employeesRs state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, and other material statutory dues, as applicable, with the appropriate authorities. Also, Refer Note 3.9 to the standalone financial statements regarding managementRss assessment on certain matters relating to provident fund.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of statutory dues referred to in sub-clause (a) as at March 31, 2023 which have not been deposited on account of a dispute, are as follows:

Name of the Statute Nature of Dues Amount (Rs in crores) Period Forum where the dispute is pending
State and Central Sales Tax Act Sales tax and Value added Tax 111.76 Various periods from 1985 - 2018 Appellate Authority upto Commissioner Level
147.31 Various periods from 1987 - 2017 Appellate Authority - Tribunal
1.09 Various periods from 2006 - 2011 High Court
Central Excise Act, 1944 Excise duty and Cess thereon 4.34 Various periods from 2006 - 2016 Appellate Authority upto Commissioner Level
5.64 Various periods from 1996 - 2018 Appellate Authority - Tribunal
0.03 Various periods from 1995 - 2002 High Court
Customs Act, 1962 Customs Duty 0.02 Various periods from 2006 - 2007 Appellate Authority - Tribunal
Service Tax - Service Tax and 55.88 Various periods from 2007 - 2016 Appellate Authority - Tribunal
Finance Act, 1994 Cess thereon 48.26 Various periods from 2005 - 2017 Appellate Authority upto Commissioner Level
Goods and Services Tax Goods and Services Tax 18.89 Various periods from 2017 - 2020 Appellate Authority upto Commissioner Level
The Income Tax Income tax 0.37 Assessment year 2009 - 2010 Commissioner of Income - Tax (Appeals)
Act, 1961 3.42 Assessment year 2010 - 2011 Commissioner of Income - Tax (Appeals)

- #

Assessment year 2013 - 2014 Commissioner of Income - Tax (Appeals)
0.15 Assessment year 2017 - 2018 Commissioner of Income - Tax (Appeals)
- * Assessment year 2018 - 2019 Commissioner of Income - Tax (Appeals)
2.90 Assessment year 2019 - 2020 Commissioner of Income - Tax (Appeals)

#Disputed amount considered above is net of refund adjusted against earlier year amounting to Rs 0.04 crores.

*Disputed amount considered above is net of Rs 5.92 crores paid under protest.

viii.According to the information and explanations given to us and the records of the Company examined by us, there are no transactions in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

ix.(a) According to the records of the Company examined by us and the information and explanation given to us, the Company has not

defaulted in repayment of loans or other borrowings or in the payment of interest to any lender during the year.

(b)According to the information and explanations given to us and on the basis of our audit procedures, we report that the Company has not been declared Wilful Defaulter by any bank or financial institution or government or any government authority.

(c)According to the records of the Company examined by us and the information and explanations given to us, the Company has not obtained any term loans during the year.

(d)According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the standalone financial statements of the Company, we report that no funds raised on short-term basis have been used for long-term purposes by the Company.

(e)According to the information and explanations given to us and on an overall examination of the standalone financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

(f)According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

x.(a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the

year. Accordingly, the reporting under clause 3(x)(a) of the Order is not applicable to the Company.

(b) The Company has not made any preferential allotment or private placement of shares or fully or partially or optionally convertible debentures during the year. Accordingly, the reporting under clause 3(x)(b) of the Order is not applicable to the Company.

xi.(a) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted

auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

(b)During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, a report under section 143(12) of the Act, in Form ADT-4, as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 was not required to be filed with the Central Government. Accordingly, the reporting under clause 3(xi)(b) of the Order is not applicable to the Company.

(c)During thecourseof our examination of the books and records of the Company carried outin accordance with the generally accepted

auditing practicesin India, and according to the information and explanations given to us,the Company has received whistle-blower

complaintsduringthe year, which have been considered by us for any bearing on our audit and reporting under this clause.

xii.As the Companyis nota Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, thereporting under clause 3(xii) of the Order

is not applicable to the Company.

xiii.The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the standalone financial statements as required under Indian Accounting Standard 24 “Related Party Disclosures" specified under Section 133 of the Act.

xiv.(a) In our opinion and according to the information and explanation given to us, the Company has an internal audit system commensurate

with the size and nature of its business.

(b) The reports of the Internal Auditor for the period under audit have been considered by us.

xv.The Company has not entered into any non-cash transactions with its directors or persons connected with them. Accordingly, the reporting on compliance with the provisions of Section 192 of the Act under clause 3(xv) of the Order is not applicable to the Company.

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

under clause 3(xvi)(a) of the Order is not applicable to the Company.

(b)The Company has not conducted non-banking financial / housing finance activities during the year. Accordingly, the reporting under clause 3(xvi)(b) of the Order is not applicable to the Company.

(c)The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, the reporting under clause3(xvi)(c) of the Order is not applicable to the Company.

(d)Based on the information and explanations provided by the management of the Company, the Group does not have any CICs, which are part of the Group. We have not, however, separately evaluated whether the information provided by the management is accurate and complete. Accordingly, the reporting under clause 3(xvi)(d) of the Order is not applicable to the Company.

xvii.The Company has not incurred any cash losses in the financial year or in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors during the year and accordingly the reporting under clause (xviii) is not applicable.

xix.According to the information and explanations given to us and on the basis of the financial ratios (Also Refer Note 3.17 to the standalone financial statements), ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date will get discharged by the Company as and when they fall due.

xx.As at balance sheet date, the Company does not have any amount remaining unspent under Section 135(5) of the Act. Accordingly, reporting under clause 3(xx) of the Order is not applicable. Further, the Company has transferred the amount of Corporate Social Responsibility remaining unspent under sub-section (5) of Section 135 of the Act in respect of “other than ongoing projects" pertaining to the previous financial year to a Fund specified in Schedule VII to the Act within a period of six months of the expiry of the financial year in compliance with second proviso to sub-section (5) of Section 135 of the Act. (Also Refer Note 3.15 to the standalone financial statements)

xxi.The reporting under clause 3(xxi) of the Order is not applicable in respect of audit of standalone financial statements. Accordingly, no comment in respect of the said clause has been included in this report.

For Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number : 304026E/E-300009

A.J.Shaikh

Partner

Membership Number : 203637 UDIN: 23203637BGXOZF6371

Place : Chennai Date : May 23, 2023