lancor holdings ltd share price Auditors report


TO THE MEMBERS OF LANCOR HOLDINGS LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Lancor Holdings Limited ("the Company"), which comprise of the Balance sheet as at March 31, 2023, the statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone financial statements). 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 Standard) 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 loss (including other comprehensive income), the changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

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

Emphasis of Matter

We draw your attention to,

Note no. 4.02 (a) regarding pending litigation relating to one of the commercial properties accounted as investment property having a carrying value of Rs.2,985.69 lakhs.

Our opinion is not modified in respect of the above matter.

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 period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be key audit matters to be communicated in our report.

Matter

Key Audit Matter

How the matter was addressed in our audit

Revenue Recognition

The Company derives revenue primarily form real estate activity. Based on terms of the contracts with the customers revenue relating to the under-construction real-estate projects is recognized over time, i.e., by applying the percentage of completion method. Under this method, revenue and construction cost is recognized based on the assumptions and estimates relating to under development project. Considering the element of assumptions and estimate and the amount involved in relation to the same, it is considered as a key audit matter.

We have reviewed the accounting policy in relation to revenue recognition and its compliance with the Ind AS 115 "Revenue from Contracts with Customers". We have discussed with the management the principles, methods and assumptions based on which the budget estimates relating to the project are made and also reviewed the project completion percentage and the project cost incurred. We also reviewed on test check basis revenue related transactions recorded based on the underlying contracts with the customers like sale deed, construction contract and the handing over documents. We further reviewed the analysis made by the management relating to cost overrun and its impact on the project. We have also assessed and reviewed the adequacy of disclosure made in the financial statements in accordance with Ind AS 115.

Assessment of recoverability and disclosure of deferred tax assets.

Deferred tax assets are considered as a key audit matter considering the involvement of estimation and judgement in relation to the recognition and measurement on a continuous basis.

Our review included the following details a) Reviewing the reasonableness of the managements assumptions and forecasts of future taxable profits so that unused tax losses and unused tax credits can be adjusted. b) Reviewed the computation in relation to the deferred tax assets. c) Assessed the adequacy of disclosure made in the financial statement as per note 2.08.

Valuation of Inventory

The value of the inventory amounting to Rs. 19,589.78 lakhs forms a significant part, i.e., 64.71% of Companys total assets. Inventory comprises of work in progress for ongoing projects, constructed premises held for sale, land held for development and construction materials. The inventories are carried at the lower of the cost and net realizable value (‘NRV). The determination of the NRV involves estimates based on prevailing market conditions, current prices and expected date of commencement and completion of the project, the estimated future selling price, cost to complete projects. Considering significance of the amount of carrying value of inventories in the financial statements and the involvement of significant estimation and judgement in such assessment of NRV, the same has been considered as key audit matter.

Our audit procedures / testing included, among others: a) Reviewed the reports of the engineering department relating to the stage of completion which is corroborated with the cost incurred for the project. b) Review of the project cost incurred for the ongoing projects with the supporting documents on test check basis. c) For completed project review of the completion certificate of the appropriate authority along with the management assessment and the budgeted cost. d) Review of the managements process and methodology of using key assumptions for determination of NRV of the inventories; e) Review of the recent selling prices considered for arriving at the NRV for various ongoing projects and completed projects. f) Compared the NRV of the inventories to its carrying value in books on sample basis.

Claims, litigation and contingencies

The Company is having various ongoing legal disputes in the nature of tax matters and other legal matters. Management estimates the possible outflow of economic resources based on the legal status of the proceedings. Considering that the above matter involves judgement and estimation, it is considered as key audit matter.

We have adopted the following procedure in relation to the review of the legal matters. a) Reviewed the managements process of identification and analysis of the claims, litigations and contingencies b) Reading the minutes of the board meeting in relation to such matters including the details of proceedings before relevant authority. c) Held discussion with the Legal department and reviewed the status and development of the litigations during the year. d) Provision made if any and its basis of determination. e) Sufficiency of the disclosure made by the management in the notes no. 4.02 in relation to contingent matter.

Information other than the Standalone Financial Statements and our Report thereon

The Companys management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Annual Report, but does not include the standalone and consolidated 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 and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and those charged with governance for the Standalone Financial Statements

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 state of affairs (financial position), profit or loss (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 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 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 statement 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.

The 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 Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements. As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

a) 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.

b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for explaining our opinion on whether the Company has adequate internal financial controls system with respect to standalone financial statements in place and the operating effectiveness of such controls.

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

d) 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 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.

e) 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 the misstatement 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 evaluating the results of our work; and

(ii) to evaluate the effects 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 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 standalone 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 the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order , to the extent applicable

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

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and Statement of Cash Flows dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act, read with relevant rules issued there under;

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

f) With respect to adequacy of internal financial controls with reference to standalone financial statements of the Company and operating effectiveness of such controls, refer to our separate report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls with reference to standalone financial statements;

g) With respect to 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 explanation as provided to us, the managerial remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act;

h) 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 standalone financial statements - Refer Note 4.02 to the standalone financial statements.

ii. The Company has made adequate provision as required under the applicable law or accounting standards for foreseeable losses if any on the long-term contracts including derivative contracts.

iii. The Company has transferred the required amount of Rs. 0.66 Lakhs for the financial year 2014-15 to the Investor Education and Protection Fund on November 11, 2022 instead of October 28, 2022.

iv. a) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

b) The management has represented, that, to the best of its knowledge and belief, 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; and

c) Based on our audit procedures that are considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that above representations under subclause iv (a) and iv (b) contain any material mis-statement.

v. The Company has neither declared nor paid dividend during the year and hence the question of compliance under Section 123 of the Act does not arise.

vi. As proviso to rule 3(1) of the Companies (Accounts) Rule, 2014 is applicable for the Company only with effect from April 1, 2023, reporting under this clause is not applicable.

For Nayan Parikh & Co.
Chartered Accountants
Firm Registration No. 107023W
K.Y.Narayana
Partner
Place : Chennai Membership No. 060639
Dated: May 29, 2023 UDIN: 23060639BGRYUZ5862

ANNEXURE ‘A TO THE INDEPENDENT AUDITORS REPORT

Referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of the Company on Standalone Financial Statements for the year ended March 31, 2023. i.

(a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment and investment property.-

(B) The Company has maintained proper records showing full particulars of Intangible Assets.

b) As per the plan and programme of the management, property, plant & equipment and the investment properties have been physically verified. The programme of physical verification of property, plant & equipment and investment properties in our opinion is considered reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification.

c) Based on the examination of the records and sale deeds or such other documents provided to us, the title deeds of all the Immovable Properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company, except as referred to in note no. 4.08 (a) of the standalone financial statement, where the properties are acquired under a power of attorney in the normal course of the business and the Company is yet to register it in its own name. None of the promoters or directors or their relative or employee are related in any manner in relation to the said transaction. Further with respect to a commercial property known as "Menon eternity" which is classified under investment property having gross carrying value Rs. 2,985.69 lakhs as on March 31, 2023, the dispute with the landowner relating to the land on which the property is situated, the division bench had passed an order contrary to the order of the single bench of the Honble High Court of Madras who had earlier set aside the invalidation of the sale deed. Subsequently, the Company has filed a special leave petition before the Honble Supreme Court of India and the matter is pending. We refer to note number 4.02(a) regarding this matter.

d) The Company has not revalued its property, plant and equipment (including right of use assets) or intangible assets or both during the year ended March 31, 2023.

e) There are no proceedings initiated or are pending against the Company as at March 31, 2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

ii. a) According to the information and explanation provided to us, the physical verification of construction work in progress is carried out by management by site visit in frequent intervals and certification of completion of work by technical persons are considered as reasonable. Other inventories have been physically verified during the year by the management. In our opinion, the frequency and manner of verification by the management is reasonable and the coverage and procedure of verification is appropriate. No material discrepancies were noticed of 10% or more in the aggregate for each class of inventories on such physical verification of inventories / alternate procedures performed as applicable, when compared with the books of accounts.

b) The Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis of security of current assets. As per the information and explanation provided to us and based on our examination, we draw reference to note no. 2.20 of the standalone financial statement with respect to submission of quarterly returns or statements which are in agreement with the books of accounts of the Company.

iii. a) During the year the Company has granted unsecured loans to firm.

(Rs. In Lakhs)

Investments Loans

Aggregate amount granted/ provided during the year

Subsidiaries - 16.53

Balance outstanding as at balance sheet date in respect of above cases

Subsidiaries - 322.44

Ho the wever, Company has not given any guarantee or security or advance in the nature of loan to Companies, firms, limited liability partnerships or other parties.

b) In our opinion and according to the information and explanation provided to us, the terms and conditions on which the loan has been granted are prima facie, not prejudicial to the Companys interest.

c) In the case loan to the firm, as per the information and explanation given to us, no repayment of principal has been stipulated and further the loan is free of interest, accordingly the regularity in repayment of principal and interest amount does not arise

. d) As stated in sub clause (c), as no repayment has been stipulated, the question of total amount over due for more than 90 days and reasonable step taken for recovery in this regard does not arise.

e) In our opinion and as stated in sub clause (c), as there is no stipulation of repayment of principal, the question of loan granted has fallen due during the year does not arise and also the question of renewal or extension or fresh loans granted to settle the overdues of existing loans given to the firm does not arise

. f) The Company has granted interest free unsecured loan to its wholly owned subsidiary without specifying any terms or period of repayment;

Particulars

Amount in Lakhs
Related Parties
Aggregate amount of loans/ advances in
nature of loans _
Repayable on demand (A) -
Agreement does not specify any terms or
period of repayment (B) 16.53
Total (A+B) 16.53
Percentage of loans/ advances in nature of
loans to the total loans 100%

iv. In our opinion and according to the information and explanation given to us, in respect to loans, investments, guarantees and securities, provision of section 185 and 186 of the Companies Act, 2013 has been complied with.

v. In our opinion and according to the information and explanation given to us, the Company has neither accepted any deposits nor any amounts which are deemed to be deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable. We have been informed by the management that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

vi. We have broadly reviewed the books of account maintained by the Company relating to construction and development activity, pursuant to the Companies (Cost Record and Audit) Rules, 2014 made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. vii. a) The Company is regular in depositing undisputed statutory dues including goods and service tax, provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, value added tax, cess and any other material statutory dues, as applicable, to the appropriate authorities. No undisputed amounts payable in respect of these statutory dues were outstanding at the year end for a period of more than six months from the date they became payable except for income tax liability (tax deducted at source u/s 194Q) of Rs. 0.21 Lakhs for the period prior to September 30, 2022.

b) The statutory dues as referred above in vii(a) that have not been deposited on account of any dispute is as given below: -

Name of the Statute

Nature Of Dues Period to which the amount relates Forum where dispute is pending Amount

1 Finance Act, 1994

Service Tax October 2007 to August 2009 Customs, Excise and Service Tax Appellate Tribunal 156.10 lakhs (Penalty)

2 Finance Act, 1994

Service Tax February 2009 to June 2010 The Honourable Supreme Court of India. 182.01 lakhs

3 Income Tax Act, 1961

Income Tax Assessment year 2017-18 Commissioner of Income Tax Appeals 407.84 lakhs

4 Income Tax Act, 1961

Income Tax Assessment year 2017-18 Commissioner of Income Tax Appeals 20.78 lakhs

viii. During the year the Company has not surrendered or disclosed any unrecorded income relating to previous years in the tax assessments under the Income Tax Act, 1961. Accordingly, the requirement of previously unrecorded income whether properly recorded in the books of accounts during the year does not arise.

ix. a) During the year, the Company has repaid the principal and interest thereon within the prescribed time limit except cases stated in the note no 2.20 to the financial statement.

b) According to the information and explanations given to us and as disclosed in note no. 2.20 of the standalone financial statement and on the basis of our audit procedures, we report that the company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

c) In our opinion and according to the information and explanations given to us, the company has utilized the money obtained by way of term loans during the year for the purposes for which they were obtained

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

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

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

x. a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Therefore, reporting requirement under this clause is not applicable.

b) In our opinion and according to the information and explanations given to us, the company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year. Therefore, reporting requirement under this clause is not applicable.

xi. a) No fraud by the Company or any fraud on the Company has been noticed or reported during the year.

b) According to the information and explanations given to us, no report under Section 143(12) of the Act has been filed by the auditors in Form ADT-04 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government during the year and up to date of this report.

c) There are no whistle blower complaints received by the Company during the year and up to the date of this report.

xii. The Company is not a Nidhi Company and hence reporting under clause (xii) of the order is not applicable.

xiii. According to the information and explanation provided to us and in our opinion, the related party transactions are entered in to by the Company are in compliance with Sections 177 and 188 of Act where applicable, and the details of such transactions have been disclosed in the standalone financial statements, as required by the applicable accounting standard.

xiv. a) The Company has an internal audit system commensurate with the size and nature of its business. b) We have considered the internal audit reports of the Company issued till the date of the audit report, for the period under audit.

xv. According to the information and explanations given to us, in our opinion during the year the Company has not entered into any non-cash transactions with its directors or persons connected with its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the company.

xvi. a) As per the information and explanation provided to us, the Company is not required to registered under section 45-IA of Reserve Bank of India Act, 1934. Hence, reporting under paragraph (xvi) (a), and (b) of the Order is not applicable.

b) The Company is not a Core Investment Company as defined in the regulation made by the Reserve bank of India. Hence reporting under paragraph (xvi) (c) of the Order is not applicable. c) According to the information and explanations given to us, the Group does not have any CIC as part of the Group as per definition of Group contained in the Core Investment Companies (Reserve Bank) Directions, 2016 and hence the reporting under paragraph (xvi) (d) of the order is not applicable.

xvii. According to the information and explanations given to us and based on the examination of the books of accounts, the Company has not incurred cash losses for the current year, however has incurred cash losses amounting Rs. 1,167.03 lakhs in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors during the year. Accordingly, reporting under paragraph 3(xviii) of the Order is not applicable to the Company;

xix. According to the information and explanations given to us and on the basis of the financial ratios as disclosed in note no. 4.18, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date will get discharged by the Company as and when they fall due.

xx. According to the information and explanation given to us, there is no unspent amount for the year under subsection (5) of section 135 of the Companies Act, 2013 pursuant to any ongoing or other than ongoing project as on March 31, 2023. Accordingly the provisions of clause 3 (xx) (a) and (b) of the Order are not applicable.

For Nayan Parikh & Co.
Chartered Accountants
Firm Registration No. 107023W
K.Y.Narayana
Partner
Place : Chennai Membership No. 060639
Dated: May 29, 2023 UDIN No: 23060639BGRYUZ5862

ANNEXURE ‘B TO THE INDEPENDENT AUDITORS REPORT

Referred to paragraph 2(f) under the heading ‘Report on other Legal and Regulatory Requirements of our independent auditors report on even date, to the members of the Lancor Holdings Limited on standalone financial statements for the year ended March 31, 2023.

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

We have audited the internal financial controls with reference to Standalone Financial Statements of Lancor Holdings Limited (the "Company") as of March 31, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, an adequate internal financial controls with reference to financial statements, and such internal financial controls were operating effectively as at March 31, 2023, based on the internal control with reference to standalone financial statements 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 (‘Guidance Note) issued by the Institute of Chartered Accountants of India (‘ICAI).

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to standalone financial statements 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 ICAI. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements of the Company based on our audit. We conducted our audit in accordance with the Guidance Note issued by ICAI 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 control. Those standards and the guidance note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were 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 with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, 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 audit opinion on the Companys internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements.

A Companys internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial controls with reference to standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone 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 unauthorised acquisition, use, or disposition of the Companys assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with reference to Financial Statements

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

For Nayan Parikh & Co.
Chartered Accountants
Firm Registration No. 107023W
K.Y.Narayana
Partner
Place : Chennai Membership No. 060639
Dated: May 29, 2023 UDIN No: 23060639BGRYUZ5862