jbf industries ltd share price share price Auditors report

INDEPENDENT AUDITORS REPORT

ON AUDIT OF THE STANDALONE FINANOIAL STATEMENTS

To

The Members of

JBF Industries Limited.

Qualified Opinion

We have audited the accompanying Standalone Financial Statements of JBF Industries Limited ("the Company"), which comprise the balance sheet as at 31st March 2023, 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.

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 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 March 31,2023, and its profit including other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

(i) As mentioned in Note 34.1 to the Standalone Financial Statements, provision of interest @ 9% p.a. on its borrowings aggregating to Rs.2,473.79 Crores for the year ended from1st April 2022 to 31st March 2023 as against the documented rate, resulting into lower provision of finance cost for the year ended 31stMarch, 2023 by Rs.116.68 Crores, which is not in compliance with Ind AS -23 "Borrowings Costs" read with Ind AS-109 on "Financial Instruments".

Aggregate amount of Interest not provided for as at 31stMarch, 2023 is Rs.820.91 crores. Had the interest been provided at the documented rate, finance cost, net loss after tax for the year, total comprehensive income and EPS for the year ended 31stMarch, 2023 would have been Rs 351.86 Crores, Rs.(1970.14) Crores, Rs.(1975.23) Crores, Rs.(240.64) as against the reported figure of Rs.235.18 Crores, Rs.(1853.46) Crores, Rs.(1858.55) Crores and Rs.(226.39) in the above Statements.

Further current financial liabilities - others and other equity as at 31st March 2023 would have been Rs.1277.88 Crores and Rs.(3739.64) Crores respectively as against the reported figure of Rs.456.97 Crores and Rs.(2918.72) Crores respectively in the above Statements.

(ii) As mentioned in Note 37.3 to the Standalone Financial Statements regarding the application filed with the National Company Law Tribunal (NCLT), by one of the operational creditors of JBF RAK LLC (JBF RAK), situated at UAE, a subsidiary of the company, against the Company, for supply of raw materials to JBF RAK and claim of Rs.128.48 Crores (US$ 19,899,091.53) as per notice dated 17th February, 2020. No provision has been considered for the above claim for the reasons stated therein. The matter described in above has uncertainties related to the outcome of the legal proceedings and hence we are unable to quantify the provisions for above claim at this stage, if any, and its consequential impacts on the financial statements of the Company.

We concluded our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013 (the Act). Our responsibilities under those Standards are further described In the Auditors Responsibility 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 Companies Act, 2013 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 are sufficient and appropriate to provide a basis for our opinion on the Standalone Financial Statements.

Emphasis of Matter

We draw your attention to:-

(i) Note 37.2 to the Standalone Financial Statements, regarding invocation of corporate guarantee given by the company to the lender of JBF Petrochemicals Ltd. ("JPL"). The company has denied above invocation and is of the view that above invocation is not tenable for the reasons explained therein and hence no provision against the claims under the invoked corporate guarantee is considered necessary.

(ii) Note 46 to the Standalone Financial Statements that Companys secured assets including the manufacturing plants situated in Sarigam, Athola and Saily are no longer in the possession of the Company. Further, the management is also of the view that the operations of the Company without the manufacturing plants will be severely affected. With effect from 1st December, 2O22 manufacturing operations from all locations have been discontinued. The Companys ability to sustain itself and generate revenues has been critically dented. Further, there is a significant and material impact on the "going concern" status of the Company and its future operations. The company has also transferred MAT credit entitlement of Rs.64.09 Crores to Statement of Audited Financial Results under the head Tax Expenses "Short/(Excess) Provision of Tax of Earlier Years (Net)" as there is no possibility of earning revenue in future. The Company will find it difficult to meets its financial commitments. Therefore, the company ceases to continue as a going concern.

Further part secured assets including land, building, sundry debtors, investments, cash and bank balances, deposits, intangible assets (including the SAP software) and other movable assets amounting to Rs. 2396.64 Crores (Net of Provisions) have been sold to the MEPL by CFM on 6th June 2022 for Rs.873.86 Crores and balance assets were sold to MEPL by CFM on 20th December 2022. The same has resulted into loss of Rs.1503.59 Crores on account of repossession of secured assets by the Lender, which has been shown as exceptional items in the financial results of the company.

Further, the Company has received demand notice from Tamilnad Mercantile Bank Ltd, (TMBL) under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2OO2 ("Sarfaesi Act") and the Rules framed thereunder for recovery of their dues vide letter dated 23rd November, 2O21 amounting to Rs.32.94 Crores plus future interest as applicable thereon in terms of loan agreement. TMBL has denied to release the charge on assets of the company. However, the remaining 14 lenders have assigned their debts to Asset Reconstruction Company CFM on dated 13.08.2021 and also transferred all the assets (fixed assets, investment and currents assets) of the company to CFM on dated 11.11.2O21. CFM has taken physical possession of all secured assets of JBF.

CFM has sent intimation for sale of all the secured assets of the company to Madelin Enterprises Private Limited (MEPL) for total consideration of Rs.881 Crores on dated 11.O5.2O22.

However, TMBL has not agreed to the decision of remaining 14 lenders, therefore, it has in principal charge over the secured assets of the company on pro-rata basis, which have been subsequently transferred to CFM and finally to MEPL.

Thereafter, TMBL approached NCLT Ahmedabad for recovery of their dues from the Company and CFM. The matter is now pending before the NCLT Ahmedabad and it is subjudice.

(iii) Note 52 to the Standalone Financial Statements, regarding non-preparation of consolidated financial statement due to the reasons mentioned therein. The company has six subsidiaries and is required to present consolidated financial Statements. However, the Company has not prepared and presented the consolidated financial statements/Statements required by Companies Act, 2013 and Ind AS 110 "Consolidated Financial Statements". However, as on 31st March 2023, M/s. Madelin Enterprises Pvt. Ltd., has acquired the holding of JBF Industries Ltd. in its Subsidiary Company JBF Global Pte Limited situated at Singapore under the Sarfaesi Act.

(iv) Note 56 to the standalone financial statements, regarding the vacancy of the post of the Chief Executive Officer since 1st May, 2019 due to the reason as mention therein.

(v) During the year under review, tenure of the Independent Director ended on 28th November, 2022. Though, she was reappointed for second term but no special resolution for her reappointment was passed as required u/s 149(10) of the Companies Act, 2013. Therefore, the company failed to comply with the requirement of a minimum number of Independent directors as required by Subsection (4) of Section 149 of the Companies Act 2013.

Our opinion is not modified in respect of these matters.

Key Audit Matters

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 year. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion, Material Uncertainty Related to Going Concern & Emphasis of matters section, we have determined the matters described below to be key audit matters to be communicated in our report.

Key audit Matters	How our audit addressed the key audit matter
(i) Carrying value of trade receivables
As mentioned in Note 16& 17 to the Standalone Financial Statements,	Our audit procedures included the following:
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes.	We evaluated the Companys processes and controls for monitoring the tax disputes.
	Obtained risk assessment of tax litigation from our internal tax expert to assess managements judgment and assumption on such matters to challenge the managements underlying assumptions in estimating the tax provision and the possible outcome of the disputes.
Accordingly, it has been determined as a key audit matter.	They also considered legal precedence and other rulings in evaluating managements position on these uncertain tax positions.

Other information

The Companys Board of Directors is responsible for the other information. The other information comprises the management discussion & analysis and directors report included in the annual report but does not include the Standalone Financial Statements and our auditors report thereon.

Our opinion on the Standalone Financial Statements does not cover the other information and we 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 identified above 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 communicate the matter to those charged with governance. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone 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 standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) 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 implementation and maintenance of accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditors Responsibilities for the audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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.

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 financial controls 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 the Board of Directors.

• Conclude on the appropriateness of the 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 ability of the Company 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 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 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 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.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone 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 standalone 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 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 Standalone Financial Statements of the current year 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 the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) Except for the effects of matters described in the Basis for Qualified Opinion paragraph above, we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary or the purposes of our audit.

b) Except for the effects of matters described in the Basis for Qualified Opinion paragraph above, 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 change in equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) Except for the effects of matters described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules 2015, as amended.

e) The matters described in paragraph "Basis for Qualified Opinion" and "Emphasis of Matter" 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, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 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" to this report.

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 or provided by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. The Remuneration paid to any Director is not in excess of limit laid down under 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, 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 as at 31stMarch 2023 on its financial position in its Standalone Financial Statements as referred in Note 37 to the Standalone Financial Statements.

ii. Except for the effects of matters described in the Basis for Qualified Opinion paragraph above, the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

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

iv. The management has represented that

a. to the best of its knowledge and belief, other than as disclosed in the notes no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind to the accounts, 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.

b. to the best of its knowledge and belief, other than 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.

c. Based on the audit procedures, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material mis-statement.

v. No dividend has been paid during the year by the company.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

	For S.C. Ajmera & Co.
	Chartered Accountants
	FRN 002908C
	(Arun Sarupria - Partner)
Place: Udaipur	Membership No. 078398
Date: 30.05.2023	UDIN:23078398BGVRLR5538

ANNEXURE - "A" TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 2 (g) Under Report on Other Legal and Regulatory Requirements of our report of even date on the standalone financial statements of JBF Industries Limited for the year ended 31st March 2023)

Report on the Internal Financial Controls Over Financial Reporting under clause(i) of subsection 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of JBF Industries Limited ("the Company") as of 31st March, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting

("the Guidance Note) 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 Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note 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 judgment, including the assessment of the risks of material misstatement of the standalone 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 qualified 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 authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized 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.

Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weakness has been identified in the operating effectiveness of the Companys internal financial control over financial reporting as on 31st March 2023: -

The Company did not have an appropriate internal control system for customer settlement through credit note, credit evaluation, pricing authorization, establishing customer credit limits and some of the export transactions without any advances/ letter of credits, which may result in the Company recognizing revenue without establishing reasonable certainty of ultimate collection.

Further, the company ceases to be going concern as referred in paragraph (ii) of Emphasis of Matters in the report on the audit of the standalone financial statements.

The Company also does not have Chief Executive Officer since 1st May, 2019 as referred in paragraph (iv) of Emphasis of Matters in the report on the audit of the standalone financial statements.

The company has also reappointed independent director for second term without special resolution as required u/s 149(10) of the Companies Act, 2013. Further, the company failed to comply with the requirement of a minimum number of Independent directors as required by Sub-section (4) of Section 149 of the Companies Act 2013 as referred in paragraph (v) of Emphasis of Matters in the report on the audit of the standalone financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Companys annual financial statements will not be prevented or detected on a timely basis.

In our opinion, except for the effects/possible effects of above material weakness described above on the achievement of the objectives of the control criteria, 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 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.

We have considered the material weakness identified and reported above in determining the nature, timing and extent of audit tests applied in our audit of standalone financial statements of the Company for the year ended 31st March 2023, and these material weaknesses do not affect our opinion on the standalone financial statements of the Company.

	For S.C. Ajmera & Co.
	Chartered Accountants
	FRN 002908C
Place: Udaipur	(Arun Sarupria - Partner)
Date: 30.05.2023	Membership No. 078398
	UDIN:23078398BGVRLR5538

ANNEXURE - "B" TO INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date on the standalone financial statements to the members of JBF Industries Limited for the year ended 31st March, 2023 on the matters required by the Companies (Auditors Report) Order, 2020 ("The Order") issued by Central Government in the terms of sub section (11) of Section 143 of Companies Act, 2013)

i. In respect of Tangible & Intangible Assets:

a) (i) The Company has maintained proper records showing full Particulars, including quantitative details and situation of Property , Plant & Equipment;

(ii) The company is maintaining proper records showing full Particulars of Intangible Assets.

b) As explained to us, Property, Plant & Equipment have been physically verified by the management in accordance with the programme of verification, which in our opinion is reasonable, considering the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification as compared with the available records.

c) According to the information and explanations given to us and based on the examination, we report that, the company does not hold any immovable properties as at the balance sheet date.

d) According to the information & explanation given to us and based on our examination of the records of Company, no revaluation of property, plant & equipment or intangible assets or both has been done. Hence, clause (d) of this Para is not applicable.

e) According to the information & explanation given to us, no proceedings has been initiated or are pending against the company for holding Benami

Property under the Benami transactions prohibition Act , 1988 (45 of 1988) and rules made thereunder. Hence, clause (e) of this Para is not applicable.

Further, during the year, Property, Plant & Equipment including Intangible assets has been sold to Madelin Enterprises Private Ltd. by CFM Asset Reconstruction Private Ltd. on account of repossession of secured assets by the Lender.

ii. In respect of Inventories :

(a) As explained to us, the securities held as stock in trade and in custody of Company have been verified by the management at reasonable intervals. In our opinions, coverage and procedure of such verification by the management is appropriate. The company is maintaining proper records of inventory and no discrepancies were noticed on comparing the physical securities/statements from custodian with book records.

(b) During the year, the company has not been sanctioned, any working capital from banks, Financial institutions, on the basis of security of current assets. Hence clause (b) of this Para is not applicable.

Further, during the year, Inventories including other movable assets has been sold to Madelin Enterprises Private Ltd. by CFM Asset Reconstruction Private Ltd. on account of repossession of secured assets by the Lender.

iii. According to the information and explanation given to us, in respect of loans, secured or unsecured, granted by the Company to Companies, Firms, Limited liability partnerships:

a) The Company has granted unsecured loans to two such Companies and in our opinion, the rate of interest as applicable and other terms and conditions on which the loans had been granted were not, prima facie, prejudicial to the interest of the Company.

b) The schedule of repayment of principal and payment of interest were stipulated at the time of granting of loan. The Company discontinued recognizing the interest on loan to one of the subsidiary companies w. e. f. 1st April 2018.

Further, during the year, the said loan has been sold to Madelin Enterprises Private Ltd. by CFM Asset Reconstruction Private Ltd. on account of repossession of secured assets by the Lender.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 185 & 186 of the Act as applicable, in respect of grant of loans except discontinuance of interest recognition on the loans granted to one of the subsidiary companies. However, during the year the said has loan been sold to Madelin Enterprises Private Ltd. by CFM Asset Reconstruction Private Ltd. on account of repossession of secured assets by the Lender.

During the year, Company has not made any investments, not provided any security or given any guarantee.

v. According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of clause (v) of paragraph 3 of the Order are not applicable to the Company.

vi. We have broadly reviewed the cost records maintained by the Company pursuant to Companies (Cost Records & Audit) Rules 2014 prescribed by Central Government under section 148 (1) (d) of the Act as applicable 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 and complete.

vii. According to the information and explanations given to us in respect of statutory dues:

a) The Company has been generally regular in depositing undisputed statutory dues, including Goods & Service Tax , provident fund, employees state insurance, income tax, services tax, duty of customs, Cess and any other statutory dues with the appropriate authorities as applicable during the year except some cases of custom duty & goods and services tax. According to the information and explanations given to us, no undisputed mounts payable in respect of such statutory dues were outstanding as at 31st March, 2023 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, the disputed statutory dues aggregating to Rs. 1.76 Crore that have not been deposited on account of matters pending before appropriate authorities are as under:

Name of the statute	Nature of the dues	Rs. in Crore	Period to which the amount relates	Forum where dispute is pending
Central Excise Act, 1944	Excise Duty	0.64	2005-06	Supreme Court
		1.12	2005-06	Custom Excise & Service Tax Appellate Tribunal
Total		1.76

viii. According to the information & explanation given to us and based on our examination of the books of accounts & records of Company , there has been no transactions recorded in books of accounts that have been surrendered of disclosed as income during the year in the Tax assessments under Income Tax Act , 1961.

ix. Based on our audit procedures and according to the information and explanations given by the management, we are of the opinion that the Company has defaulted in repayment of dues to bank and financial institutions aggregating to Rs.4,183.19 Crore. Lender wise details of such default are as under:-

Sr No name of Bank	total Default (in crore)
1 CFM Asset Reconstruction Pvt Ltd	4,140.51
2 Tamilnad Mercantile Bank	38.8
Total	4183.19

Further, lenders of the Company have classified all the credit facilities given to the Company as at 31st March 2023 as Non-Performing Asset (NPA) in their books of account.

x. The Company has,

a) Not raised moneys by way of initial public offer or further public offer during the year. Accordingly, the provisions of clause 3 (x) (a) of the Order are not applicable to the Company.

b) Not made preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit. Accordingly, the provisions of clause 3 (x) (b) of the Order are not applicable to the Company.

xi. Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and on the basis of information and explanations given to us,

a) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

b) No report under sub-section (12) of section 143 of the Companies Act has been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

c) No whistle-blower complaints have been received during the year by the Company.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Therefore, the provisions of clause (xii) paragraph 3 of the Order are not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us and based on our examination of the records of the Company, Companys transactions with the related parties are in compliance with sections 177 and 188 of the Act as applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable Indian Accounting Standards.

xiv. The company has,

a) An internal audit system commensurate with the size and nature of its business.

b) The reports of the Internal Auditors for the period under audit were considered by us.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions. Therefore, the provisions of clause (xv) of the Order are not applicable to the Company.

xvi. In our opinion, the Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company.

xvii. Based on our examination of the records of the Company, the company has incurred cash loss in the financial year however, no cash losses has been incurred in the immediately preceding financial year.

xviii. According to the information and explanations give to us, there has been no resignation of the statutory auditors during the year; hence the provisions of clause 3(xviii) of the Order are not applicable.

xix. On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements and as per our knowledge of the Board of Directors and management plans, in our opinion, 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.

xx. According to the information and explanations given to us and based on our examination of the records of the Company,

a) There is no other project in compliance with second proviso to sub-section (5) of section 135 of the said Act. Hence, clause 3 (xx) (a) of the Order are not applicable to the Company.

b) There is no ongoing project in compliance with second proviso to sub-section (5) of section 135 of the said Act. Hence, clause 3 (xx) (b) of the Order are not applicable to the Company.

xxi. According to the information and explanations given to us and based on our examination of the records of the Company, in our opinion the provisions of clause 3(xxi) are not applicable to Standalone Financial Statement.

	For S.C. Ajmera & Co.
	Chartered Accountants
	FRN 002908C
	(Arun Sarupria - Partner)
Place : Udaipur	Membership No. 078398
Date : 30.05.2023	UDIN : 23078398BGVRLR5538