Birla Tyres Auditors Report


TO

THE MEMBERS OF

BIRLA TYRES LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of BIRLA TYRES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2022, and 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 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, the aforesaid 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 Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2022, and its loss, total comprehensive loss, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditors Responsibility 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 (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Material uncertainty related to Going Concern We draw attention to Note 39 to the financial statements regarding preparation of the financial statements of the Company on a going concern. The Company had incurred losses during the previous Year and has continued to incur losses during the current year. The networth of the Company has been fully eroded. The Company has incurred net loss of RS 65,567.04 Lakhs during the year ended 31st March, 2022. The current liabilities as at 31st March, 2022 exceeds its total assets by RS 1,20,301.96 Lakhs. These conditions, along with the outcome of other matters as set forth in Note 39, indicate existence of material uncertainty, which cast significant doubts about the Companys ability to continue as a going concern and consequently, the ability of the Company to realise its assets and discharge its liabilities in the normal course of business. The ability of the Company to continue as a going concern is solely dependent upon the proposal for infusion of funds by the investor which in turn is subject to the approval and successful implementation of the Scheme which is wholly beyond the control of the Company. The proposed Scheme has also been submitted to the lenders for their evaluation (Refer Note 40) to the financial statements. The management has prepared the financial statements on a going concern basis, as they are reasonably certain that the Scheme will be approved in the present form and the Company will be able to successfully implement the approved scheme and no adjustments have been made to the carrying value of assets and liabilities and their presentation / classification in the Balance Sheet.

Our opinion is not modified in respect of this matter. Emphasis of Matters

We draw attention to Note 29(b) of the financial statements which describe the uncertainty related to the penalty of RS 17,833 Lakhs imposed by the Competition Commission of India for alleged cartelization by certain Tyre manufacturing companies including the Company. The Company has filed an appeal against the CCI Order before the National Company Law Appellate Tribunal ("NCLAT"). Based on a legal opinion obtained by the Company, the Company believes that it has a strong case in this matter. Considering the uncertainty relating to the outcome of this matter, no provision has been considered in the books of account.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the 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 matter described in the Material Uncertainty Related to Going Concern section of our report, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter Auditors Response
1 Property, plant and equipment - Impairment assessment - Note 2.4 and Note 3 of the Financial Statements. Principal audit procedures performed
The Company has been making continuous losses in previous Year and in the current year due to various internal and external factors. As at 31st March, 2022, the carrying amount of the Property, Plant & Equipment amounted to RS 78,696.48 Lakhs [this includes RS 31,682.46 Lakhs (net of impairment charge of RS 43,551.70 Lakhs recorded during the current financial year) for Capital work in progress which is yet to commence commercial operations]. Our audit procedures included validating the appropriateness and reasonableness of the fair valuation approach and assumptions used for determining the fair value of assets by external experts through performing the following:
The management on an annual basis or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, assesses if there are any indicators that the Property, Plant & Equipment is impaired and, if indicators exist, performs an impairment test at the Cash Generating Unit (CGU) level by making an estimate of recoverable amount, being the higher of fair value less costs to sell and value in use. • Obtained an understanding of controls instituted by the management to assess impairment indicators and perform impairment assessment.
Considering the continuous losses incurred by the Company, the probability of impairment could be dependent on assumptions and methodology used for the fair valuation of the Property, Plant and Equipment by the management appointed external experts. • Evaluated design and operating effectiveness of the management controls over the impairment assessment process and review of fair valuation report obtained from the external experts.
Impairment assessment of the Property, Plant and Equipment is considered as a Key Audit Matter since there is significant management judgements and estimates involved in the impairment assessment, such as: • Evaluated the reasonableness of the fair valuation methodology used and the assumptions made for determining the fair value (such as useful life of the assets, salvage value, inflation and index rate) of the assets at CGU level using our internal fair valuation specialists.
• The determination of recoverable amount, being the higher of value-in-use and fair value less costs to dispose. • Tested the mathematical accuracy and performed sensitivity analysis in order to assess the potential impact on the recoverable amount.
• The methodology used in determination of the fair value of assets by management appointed external experts is dependent on interpretation of the valuation standards and the assumptions used such as inflation, index rates, useful lives, salvage value. • Reconciled the carrying amount of the category wise assets as per the valuation report provided by the management and as per the books of account.
• Evaluated the adequacy of disclosures in the financial statements with respect to the impairment of Property, Plant and equipment.
2 Assessment of going concern basis (as described in note 39 of the financial statements) Principal audit procedures performed
As at 31st March, 2022, the networth of the Company has been fully eroded. The Company has incurred net loss of RS 65,567.04 Lakhs during the year ended 31st March, 2022 and current liabilities as at 31st March, 2022 exceeds its total assets by RS 1,20,301.96 Lakhs. The Company has also defaulted in the payment of its borrowings and has overdue employee benefit liabilities and statutory liabilities as at 31st March, 2022. The Company has received loan regularisation letter, recall letters and demand notice from the lenders relating to the outstanding loans. Further the Company has also received notices under section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act") from some of the lenders. In addition, the Company has long outstanding over dues in respect to trade payables (including employee benefit liabilities) and statutory dues amounting to RS 32,139.90 Lakhs as at 31st March, 2022. Consequent to the non-availability of funds to meet the working capital requirements, the operations of the Company are currently halted. These factors raises material uncertainty related to Going Concern assumption used by the Company in the preparation of the financial statements. We performed the following principal audit procedures in relation to managements assessment of going concern:
a) Evaluated design and implementation of and tested the control relating to managements assessment of appropriateness of going concern assumption.
b) Evaluated the appropriateness of identification of material uncertainties by the Management.
c) Analysed and discussed cash flow, EBITDA and other relevant forecasts with management.
d) Obtained and read, the minutes of the meeting held between the lenders and the Company to understand the lenders view on the status of loan restructuring.
e) Obtained understanding of the progress of the Scheme of Arrangement with respect to the restructuring of the dues to financial and operational creditors and demerger of Passenger Car Radial business of the Company.
Assessment of existence of material uncertainty related to Going Concern is considered as a Key Audit Matter as it involves significant management judgements and estimates for preparation of the cash flow forecast for next twelve months and managements mitigation plan which includes infusion of funds by the investor which in turn is subject to the approval and successful implementation of the Scheme which is wholly beyond the control of the Company, to address material uncertainty related to going concern. f) Obtained the understanding with respect to the proposed fund infusion by the investor in the Company and fulfilment of the pre-conditions for the fund infusion.
g) Performed the sensitivities and stress testing on the future cash flows that management has considered for the going concern assessment.
h) Obtained the loan regularisation letter, recall letters, demand notices and notices under section 13(2) of SARFAESI Act and evaluated the impact on the going concern assessment.
i) Evaluated the adequacy of disclosures in the financial statements with respect to the going concern assumptions

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 Report of the Directors and the following Annexures thereto (namely Management Discussion and Analysis, Report on Corporate Governance, Annual Report on Corporate Social Responsibility Activities, Form AOC - 1, Conservation of energy, Technology Absorption and Exchange Earnings and Outgo), but does not include the financial statements and our auditors report thereon.

• Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our 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 Financial Statements

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 financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the 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 Responsibility for the Audit of the Financial Statements

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

As part of an audit in accordance with SAs, 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 financial 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 the 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.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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 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 Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act.

e) The matter described in the Material uncertainty related to Going Concern 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 31st March, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2022 from being appointed as a director in terms of Section 164(2) of the Act.

g) 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 A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting.

h) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

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, 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 financial statements

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

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 (which are material either individually or in the aggregate) 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, 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.

(b) The Management has represented, that, to the best of its knowledge and belief, as disclosed in the notes to accounts, no funds (which are material either individually or in the aggregate) 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, 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.

(c) Based on the audit procedures that has been 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 (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. The Company has not declared or paid any dividend during the year and has not proposed final dividend for the year.

2. As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 1(g) under Report on Other Legal and Regulatory Requirements of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting 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 BIRLA TYRES LIMITED ("the Company") as of 31st March, 2022 in conjunction with our audit of the 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. 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 respective 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 of the Company 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") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies 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 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 judgement, 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, to the best of our information and according to the explanations given to us, 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 31st March, 2022, based on the criteria for internal financial control over financial reporting 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.

ANNEXURE B 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)

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that

(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant & Equipment and capital work in progress.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) Some of the Property, Plant and Equipment and capital work-in-progress were physically verified during the year by the Management in accordance with a programme of verification, which in our opinion provides for physical verification of all the Property, Plant and Equipment and capital work-in-progress at reasonable intervals having regard to the size of the Company and the nature of its activities. According to the information and explanations given to us no material discrepancies were noticed on such verification.

(c) Based on the examination of the registered sale deed, transfer deed, conveyance deed, mutation of title papers and NCLT order approving the scheme of arrangement provided to us, we report that, the title deeds, of all the immovable properties of land and buildings (other than those that have been taken on lease and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in (property, plant & equipment and capital work in progress), are held in the name of the Company as at the balance sheet date. Immovable properties of land and buildings whose title deeds have been pledged as security for loans, guarantees, etc., are held in the name of the Company based on the confirmations directly received by us from lenders.

With respect to the NCLT order approving the scheme of arrangement, the Company is in the process of getting the title deeds transferred in its name.

(d) The Company has not revalued any of its property, plant and equipment (including Right of Use assets) and intangible assets during the year.

(e) No proceedings have been initiated during the year or are pending against the Company as at 31 st March, 2022 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

(ii) (a) The inventories were physically verified during the year by the Management at reasonable intervals. In our opinion and according to the information and explanations given to us, the coverage and procedure of such verification by the Management is appropriate having regard to the size of the Company and the nature of its operations. No discrepancies of 10% or more in the aggregate for each class of inventories were noticed on such physical verification of inventories when compared with books of account.

(b) According to the information and explanations given to us, the Company has been sanctioned working capital limits in excess of Rs. 5 crores, in aggregate, at points of time during the year, from banks or financial institutions on the basis of security of current assets. In our opinion and according to the information and explanations given to us, the quarterly returns and statements comprising (stock statements, book debt statements, and statements on ageing analysis of the debtors) filed by the Company with such banks or financial institutions are in agreement with the unaudited books of account of the Company, of the respective quarters, except for the following:

For the quarter Sanction amount to which the discrepancy relates* (Amount in Rs Lakhs) Nature of the current asset Nature of discrepancy Amount as per quarterly return & statements (Amount in Rs Lakhs) As per unaudited books of accounts (Amount in Rs Lakhs) Difference (Amount in Rs Lakhs) Remarks including subsequent rectification, if any
June, 2021 22,960 Trade Receivable The Reported amount reconciles with gross book balance without adjustment of provision for trade receivables and advance from customers 29,826 10,613 19,213 There is no revised statement filed till date
June, 2021 22,960 Inventory - Raw Material The Reported amount reconciles with gross book balance without adjustment of provision 900 861 039 There is no revised statement filed till date
June, 2021 22,960 Inventory - Finished Goods The Reported amount reconciles with gross book balance without adjustment of provision 2,130 1,415 715 There is no revised statement filed till date
June, 2021 22,960 Inventory - Stores & Spares Inventory capitalized as part of CWIP project considered in the quarterly returns 2,253 953 1,300 There is no revised statement filed till date
September, 2021 22,960 Trade Receivable The Reported amount reconciles with gross book balance without adjustment of provision for trade receivables and advance from customers 29,637 10,575 19,062 There is no revised statement filed till date
September, 2021 22,960 Inventory - Raw Material The Reported amount reconciles with gross book balance without adjustment of provision 800 761 039 There is no revised statement filed till date
September, 2021 22,960 Inventory - Finished Goods The Reported amount reconciles with gross book balance without adjustment of provision 1,997 1,265 732 There is no revised statement filed till date
September, 2021 22,960 Inventory - Stores & Spares Inventory capitalized as part of CWIP project considered in the quarterly returns 2,263 963 1,300 There is no revised statement filed till date
December, 2021 22,960 Trade Receivable The Reported amount reconciles with gross book balance without adjustment of provision for trade receivables. 29,358 10,550 18,808 There is no revised statement filed till date
December, 2021 22,960 Inventory - Raw Material The Reported amount reconciles with gross book balance without adjustment of provision 800 761 039 There is no revised statement filed till date
December, 2021 22,960 Inventory - Finished Goods The Reported amount reconciles with gross book balance without adjustment of provision 1,824 1,036 788 There is no revised statement filed till date
December, 2021 22,960 Inventory - Stores & Spares Inventory capitalized as part of CWIP project considered in the quarterly returns 2,262 962 1,300 There is no revised statement filed till date

The Company is yet to submit the return/ statement for the quarter ended 31-March-2022 with the banks or financial institutions.

* The sanction limit is calculated based on the current asset position submitted by the Company to the banks for the month of 31 August, 2021 and confirmed by the banks on 29 September, 2021

(iii) The Company has not made any investments in, provided any guarantee or security, and granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties during the year, and hence reporting under clause (iii) of the Order is not applicable

(iv) The Company has not granted any loans, made investments or provided guarantees or securities and hence reporting under clause (iv) of the Order is not applicable

(v) In our opinion and according to the information and explanations given to us, the Company has not complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, as amended, with regard to the deposits accepted in the nature of advance from customers lying unadjusted over one year

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013 We have broadly reviewed the books of accounts maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government for maintenance of cost records under Section 148(1) of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained by the Company We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete

(vii) In respect of statutory dues:

(a) Undisputed statutory dues, including Provident Fund (including interest thereon), Income-tax (including interest thereon), Goods and Service tax (including interest thereon), Professional tax and other material statutory dues applicable to the Company have not been regularly deposited by it with the appropriate authorities and there have been serious delays in large number of cases

Undisputed amounts payable in respect of Provident Fund (including interest thereon), Income-tax (including interest thereon), Goods and Service tax (including interest thereon), Professional tax and other material statutory dues in arrears as at 31st March, 2022 for a period of more than six months from the date they became payable, the details of which are given below:

Name of the Statute Nature of Dues Amount (Rs In Lakhs) Period to which the amount relates Due date Date of Payment
The Central, State and Integrated Goods and Service Tax Act, 2017 Interest on unpaid amount of goods and service tax 0.97 2017-18 Not Applicable Not paid till date
The Central, State and Integrated Goods and Service Tax Act, 2017 Interest on unpaid amount of goods and service tax 722.27 2018-19 Not Applicable Not paid till date
The Central, State and Integrated Goods and Service Tax Act, 2017 Unpaid amount of goods and service tax 909.36 2019-20 Not Applicable Not paid till date
The Central, State and Integrated Goods and Service Tax Act, 2017 Interest on unpaid amount of goods and service tax 1075.10 2019-20 Not Applicable Not paid till date
The Central, State and Integrated Goods and Service Tax Act, 2017 Unpaid amount of goods and service tax 882.88 2020-21 Not Applicable Not paid till date
The Central, State and Integrated Goods and Service Tax Act, 2017 Interest on unpaid amount of goods and service tax 249.15 2020-21 Not Applicable Not paid till date
The Central, State and Integrated Goods and Service Tax Act, 2017 Unpaid amount of goods and service tax 10.19 2021-22 Not Applicable Not paid till date
The Central, State and Integrated Goods and Service Tax Act, 2017 Interest on unpaid amount of goods and service tax 1.28 2021-22 Not Applicable Not paid till date
Income Tax Act, 1961 Interest on unpaid Tax Deducted at Source 30.82 2019-20 Not Applicable Not paid till date
Income Tax Act, 1961 Tax Deducted at Source 430.17 2020-21 Not Applicable Not paid till date
Income Tax Act, 1961 Interest on unpaid Tax Deducted at Source 89.43 2020-21 Not Applicable Not paid till date
Income Tax Act, 1961 Tax Deducted at Source 47.20 2021-22 Not Applicable Not paid till date
Income Tax Act, 1961 Interest on unpaid Tax Deducted at Source 5.43 2021-22 Not Applicable Not paid till date
Employees Provident Fund & Miscellaneous Provisions Act, 1952 Provident Fund 773.55 2020-21 Not Applicable Not paid till date
Employees Provident Fund & Miscellaneous Provisions Act, 1952 Interest on unpaid Provident Fund 132.22 2020-21 Not Applicable Not paid till date
Employees Provident Fund & Miscellaneous Provisions Act, 1952 Provident Fund 95.10 2021-22 Not Applicable Not paid till date
Employees Provident Fund & Miscellaneous Provisions Act, 1952 Interest on unpaid Provident Fund 8.23 2021-22 Not Applicable Not paid till date
Professional Tax Act 1987 Professional Tax 7.49 2020-21 Not Applicable Not paid till date
Professional Tax Act 1987 Professional Tax 1.34 2021-22 Not Applicable Not paid till date
Entry Tax Act Entry Tax 40.12 2014-18 Not Applicable Not paid till date

(b) Details of Statutory dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on 31st March, 2022 on account of disputes are given below:

Name of the Statute Nature of Dues Net Amount (Rs. In Lakhs) Amount paid under protest (Rs. In lakhs) Period to which the Amount Relates Forum where dispute is pending
Central Excise Act, 1944 Central Excise 9,703.20 917.36 2010-11,2013-15, 200002, Apr.15 to Sept. 15, Jan. 07 to Feb. 09, Mar. 2009 to Mar. 2010, Feb. 2003 to Dec. 2006, Apr. 2002 -Jan. 2002, 2004-05, Dec. 1999 - Jan .1999, Sept. - Dec. 1997, Aug. 1998, Sept. 1998, Oct. 15 to Mar. 16, April-11 to Mar. 13 CESTAT, Kolkata
Central Excise Act, 1944 Central Excise 1,262.88 - 1997- 98 1998- 99 1999- 00 2000- 01 2001-02 2012-13 to 2014-15 2007-08 Commissioner, Bhubaneswar
Central Excise Act, 1944 Central Excise 267.52 79.25 Jul95 to Mar96 Oct, 09 to Mar10 2010-11 Assistant Commissioner, Balasore [Matter remanded by CCE(A)]
Central Excise Act, 1944 Central Excise 276.44 - Nov99 to Dec99 Dec95 Sep99 to Oct99 Mar94 to Jul94 Dec93 to Feb94 Jul93 to Nov93 Jan93 to Jun93 Oct-96 Nov & Dec96 Jan & Feb97 Apr & May98 Jul98 to Oct98 Nov98 to Feb99 Mar99 to Aug99 Sep95 to Oct95 Feb-99 Mar-97 Sep-95 May-98 Apr-98 Apr, 2003 to March, 2004 and April 2006 to Dec 2006 1995-96, 1996-97 Assistant Commissioner, Balasore.
Central Excise Act, 1944 Central Excise 872.85 33.48 2005-06 Apr16 to Sep16 Oct16 to Mar17 Apr17 to Jun17 Commissioner (Appeals), Bhubaneswar
Central Excise Act, 1944 Central Excise - - 2014-15 to 2017-18 Deputy Commissioner of CGST and Central Excise
The Central Goods and Service Tax Act, 2017 Central Excise & Service Tax transferred to GST 1,282.94 - 2016-17 to June17 Additional Commissioner, Bhubaneswar.
The Central Goods and Service Tax Act, 2017 The Central Goods and Service Tax Act, 2017 3,061.06 - July 2017 to March 2019 2017-18 Additional Commissioner, Bhubaneswar.
Customs Act, 1962 Customs 143.74 143.74 2014-15 CESTAT, Mumbai
Customs Act, 1962 Customs 2.37 - Jul-08 to Aug-09 Assistant Commissioner of Customs
Central Sales Tax Act, 1956 Sales Tax 1,317.20 743.79 1999-00 2002-03 2004-05 2007- 08 2008- 09 2009- 10 2010- 11 Sales Tax Tribunal
Central Sales Tax Act, 1956 Sales Tax 205.11 19.91 1999-00 2009-10 HIGH COURT
Central Sales Tax Act, 1956 Sales Tax 12.52 - 2002-03 Sales Tax Tribunal(By dept)
Central Sales Tax Act, 1956 Sales Tax 183.08 - 2003-04 Supreme Court
Odisha Entry Tax Act, 1999 Entry Tax 1,984.05 595.53 2000-01 2001-02 2002-03 2004- 05 2005- 06 2006- 07 2008-09 Sales Tax Tribunal
Odisha Entry Tax Act, 1999 Entry Tax 1,102.56 132.06 2003-04 2007-08 2009-10 HIGH COURT
Odisha Entry Tax Act, 1999 Entry Tax 239.03 47.81 2005-06 Supreme Court
Odisha Entry Tax Act, 1999 Entry Tax 2,768.10 252.45 2007-08 2009-10 Oct-15 to Mar-16 Apr-16 to Jun-17 Addl. ommissioner(Appeal)
Odisha Entry Tax Act, 1999 Entry Tax 133.13 704.05 2012-13 (July12) Apr09 to May17 2004-05 Deputy Commisioner
Central Sales Tax Act, 1956 Sales Tax 2.50 0.97 2012-13 Deputy Commissioner
Central Sales Tax Act, 1956 Sales Tax 7.33 - 2008-09 2010-11 Revisional Board
Entry Tax Entry Tax 92.80 - 2013-14 High Court
Entry Tax Entry Tax 768.24 - 2014- 15 2015- 16 2016- 17 Tribunal
Odisha Value Added Tax Act, 2004 VAT 566.95 275.32 2005-06, 2008-09, 2009-10 Oct-15 to Mar-16 Sales Tax Tribunal
Odisha Value Added Tax Act, 2004 VAT 41.72 7.74 Apr-16 to Jun-17 Tribunal
Odisha Value Added Tax Act, 2004 VAT 91.76 - 2012-14 High Court
Bihar VAT Act, 2005 VAT 65.41 - 2013-14 Commercial Tax Officer
Jharkhand Vat Act, 2005 VAT 72.86 13.65 2010-11 & 2012-13 Commissioner
Jharkhand Vat Act, 2005 VAT 13.70 - 2010-11 Tribunal
WB VAT Act, 2003 VAT 868.78 - 2007-08 till 2010-11 Revisional Board
UP VAT VAT 45.84 18.99 2010-11 Addition Commissioner (Appeals)
Uttarakhand VAT Act, 2005 VAT - 17.00 2013-14 High Court
Kerela VAT VAT 214.35 - 2011-12 Deputy Commissioner
Gujarat VAT VAT 195.12 25.67 2015-16 Before Joint Commissioner Of Commercial Tax
UP VAT VAT 1,562.42 - 2016- 17 2017- 18 Local Jurisdictional officer
State VAT VAT 20.86 - 2016-17 Deputy Commissioner (Appeals)
J&K VAT VAT 12.46 - 2017-18 Local Jurisdictional officer
Central Sales Tax Act, 1956 Sales Tax 1.29 0.32 2005- 06 2006- 07 Addition Commissioner (Appeals)
Up Trade Tax Act,1948 Trade tax 8.74 2.18 2006-07 Addition Commissioner (Appeals)
Central Sales Tax Act, 1956 Sales Tax 3.40 0.38 2016-17 Deputy Commissioner of Tax (Appeal)
Entry Tax Entry Tax 40.39 - 2017-18 Appeal filed at Tax Tribunal
Central Sales Tax Act, 1956 Sales Tax 452.78 - 2016- 17 2017- 18 Local Jurisdictional officer
Central Sales Tax Act, 1956 Sales Tax 11.62 - 2016-17 Deputy Commissioner of Tax (Appeal)
Central Sales Tax Act, 1956 Sales Tax 13.29 - 2016-17 Deputy Commissioner of Tax (Appeal)
Central Sales Tax Act, 1956 Sales Tax 2.19 - 2017-18 Local Jurisdictional officer

(viii) There were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the year

(ix) (a) In our opinion the Company has not defaulted in the repayment of loans or other borrowings, or in the payment of interest thereon to financial institutions and banks during the year, except as under

Nature of Borrowing, including debt securities Name of the Lender Amount not paid on due date (R. In lakhs) Whether Principal or Interest No of days delay of unpaid
Dues to Banks:
Term Loan Axis Bank 10,385.27 Interest on Term Loan October20 to March22
Term Loan Karur Vyasya Bank 597.64 Interest on Term Loan February20, October20 to March22
February20,
Term Loan Lakshmi Vilas Bank 869.91 Interest on Term Loan September20 to March22
Cash Credit State Bank of India 3,323.64 Interest on CC September20 to March22
Cash Credit HDFC Bank 376.11 Interest on CC March21 to March22
Cash Credit Axis Bank - Cash Credit Facility 112.19 Interest on CC February21-March22
Cash Credit ICICI Bank - Cash Credit Facility 161.54 Interest on CC January21 to March22
Cash Credit Lakshmi Vilas Bank - Cash Credit Facility 944.32 Interest on CC January21 to March22
Cash Credit Punjab National Bank - Cash Credit Facility 488.11 Interest on CC February20, September20 to March22
Working Capital Loan Yes Bank 27.93 Interest on Working Capital Loan January21 to March22
Term Loan Axis Bank 42,995.87 Principal Oct20, Jan21, Apr21, Jul21, Oct21, Jan22 & Mar22
Term Loan Karur Vyasya Bank 3,373.78 Principal Oct20, Jan21, Apr21, Jul21, Oct21, Jan22 & Mar22
Term Loan Lakshmi Vilas Bank 3,186.77 Principal Oct20, Jan21, Apr21, Jul21, Oct21, Jan22 & Mar22
Cash Credit State Bank of India 9,490.11 Overdraft March 22
Cash Credit Axis Bank 836.65 Overdraft March 22
Cash Credit HDFC Bank 1,928.21 Overdraft March 22
Cash Credit ICICI Bank 610.00 Overdraft March 22
Cash Credit Lakshmi Vilas Bank 2,118.84 Overdraft March 22
Working Capital Loan Yes Bank 334.56 Working Capital Loan in excess of Drawing Power March 22
Cash Credit Punjab National Bank 2,032.27 Overdraft March 22
Letter of Credit ICICI Bank 278.87 Letter of Credit March 22
Dues to Financial Institutions:
Term Loan West Bengal Infrastructure Development Financial Corporation Limited 1,272.02 Interest on Term Loan September 20 to March 22
Term Loan West Bengal Infrastructure Development Financial Corporation Limited 1,458.77 Principal Sept. 20, Dec. 20, Mar. 21, Jun21, Sep21, Dec21 & Mar22
Term Loan West Bengal Infrastructure Development Financial Corporation Limited 3,186.46 Principal Oct20, Jan21, Apr21, Jul21, Oct21, Jan22 & Mar22
Dues to Others
Term Loan Asset Reconstruction Company (India) Limited 3,990.99 Interest on Term Loan February20, September20 to March22
Working Capital Loan Asset Reconstruction Company (India) Limited 401.23 Interest on Working Capital Loan February20, September20 to March22
Cash Credit Asset Reconstruction Company (India) Limited - Cash Credit Facility 273.34 Interest on CC January21 to March22
Term Loan Asset Reconstruction Company (India) Limited 12,729.74 Principal Oct20, Jan21, Apr21, Jul21, Oct21, Jan22 & Mar22
Cash Credit Asset Reconstruction Company (India) Limited 704.72 Overdraft March 22
Working Capital Loan Asset Reconstruction Company (India) Limited 1,077.60 Working Capital Loan in excess of Drawing Power March 22
Total 109,567.45

* The amount of default has not been repaid subsequently till the date of this audit report.

(b) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority

(c) The Company has not taken any term loan during the year and there are no unutilised term loans at the beginning of the year and hence, reporting under clause (ix)(c) of the Order is not applicable

(d) On an overall examination of the financial statements of the Company, funds raised on short-term basis aggregating RS 23,655.11 Lakhs have been used for long-term purposes by the Company

(e) The Company did not have any subsidiary or associate or joint venture during the year and hence, reporting under clause (ix)(e) of the Order is not applicable

(f) The Company has not raised any loans during the year and hence reporting on clause (ix)(f) of the Order is not applicable

(x) (a) The Company has not issued any of its securities (including debt instruments) during the year and hence reporting under clause (x)(a) of the Order is not applicable

(b) During the year the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause (x)(b) of the Order is not applicable to the Company

(xi) (a) To the best of our knowledge no fraud by the Company or no material fraud on the Company has been noticed or reported during the year

(b) To the best of our knowledge, no report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the date of this report

(c) As represented by the Management, there was no whistle blower complaints received by the Company during the year (and upto the date of this audit report)

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2020 Order is not applicable

(xiii) In our opinion the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc as required by the applicable accounting standards.

(xiv) (a) In our opinion the Company has an adequate internal audit system commensurate with the size and the nature of the entity.

(b) We have considered, the internal audit reports issued to the Company during the year and covering the period upto March, 2022 and the draft of the internal audit reports where issued after the balance sheet date covering the period 1st January, 2022 to 31st March, 2022 for the period under audit.

(xv) In our opinion during the year the Company has not entered into any non-cash transactions with its directors or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 Hence, reporting under clause (xvi)(a), (b) and (c) of the order is not applicable.

(xvii) The Company has incurred cash losses amounting to RS 39,062.72 Lakhs during the financial year covered by our audit and RS 43,185.55 Lakhs in the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors of the Company during the year.

(xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities (Asset Liability Maturity (ALM) pattern), other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, we are of the opinion that material uncertainty exists as on the date of the audit report that Company may not be 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.

Refer Material uncertainty related to going concern and Key Audit Matter on going concern provided in the main audit report.

(xx) The Company was not having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year and hence, provisions of Section 135 of the Act are not applicable to the Company during the year Accordingly, reporting under clause 3(xx) of the Order is not applicable for the year.

For Deloitte Haskins & Sells,
Chartered Accountants
(Firms Registration No.: 302009E)
Abhijit Bandyopadhyay (Partner)
Place: Kolkata (Membership No.: 054785)
Date: April 11, 2022 UDIN:22054785AGUAMD8283