options chain Auditors report

The Members,

Naraingarh Sugar Mills Limited.

1. Qualified Opinion

We have audited the accompanying financial statements of Naraingarh Sugar Mills Limited which comprise the Balance Sheet as at 31^s1 March, 2023, the Statement of Profit & Loss (including other Comprehensive Income), Statement of Changes in Equity and Cash Flow Statement for the year then ended, and notes to the 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, except for the effects of the matters described in the Basis for Qualified Opinion Section of our report the aforesaid financial statements give the information required by the Companies Act 2013, as amended ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs of the Company as at 31^s1 March, 2023, its loss including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

2. Basis for Qualified Opinion

a. We draw attention to Note 4.2 of the financial statements regarding Contingent Liabilities & Commitments (including default in repaying Term/Soft Loans and guarantees) can adversely affect the financial viability of the Company. Adverse decision by various adjudication authorities can further erode the working capital as well as Share capital too. In spite of such serious nature, the management of the Company has prepare the financial statements without acknowledging the liability and prepare it on "Going Concern concept" However we have not been able to corroborate the Managements contention of "doing Concern". Accordingly, we are unable to comment on the "Going Concern Principle" of the Company.

b. We draw attention to Note 4.4 of the financial statements regarding default by Company in repaying Loans (Principal and Interest) from Bank/Financial Institution. An FIR dated 25" December, 2021 was lodged u/s. 12011, 406, 409, 420, 465 & 471 of I PC against relative of Ex-Directors and other officers of the Company. The management of the Company is also taken over by the State Government. Further Land measuring 64 Acre in the name of Company was also attached by lion hie Court vide order dated 25" February, 2022. These developments can adversely affect to the overall functioning of the Company and may also affect the "Going Concern Concept" of the Company. In spite of such serious nature, the management of the Company has prepare the financial statements without acknowledging the liability and prepare it on "Going Concern concept" However we have not been able to corroborate the Managements contention of "Going Concern". Accordingly, we are unable to comment on this point.

c. We draw attention to Note 4.5, 4.12 <? 4.13 of the financial statements regarding party balances including balance due from Mr. Rahul Anand who is the prime party of FIR along with other Companies/Firms related to him. We are unable to comment on this point, since the matter is subjudiced.

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

3. Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, 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. We have considered the matters described below to be the key audit matters for incorporation in our report.

Key Audit Matter	How our audit addressed the Key Audit Matter
Impact of Government Policies/Notifications on recognition of subsidy accruals/claims and their recoverability:
During the year, the Company has recognised Subsidy Claims aggregating to Rs 1,313.20 Lakh in terms of Schemes notified by the State Government to offset the cane cost for sugar season 2022-2023.	We understood and tested the design and operating effectiveness of controls as established by management in recognition and assessment of the recoverability of the claims. We evaluated the managements assessment regarding reasonable certainty for complying with the relevant conditions as specified in the notification/policies and collections.
We considered this as a key audit matter because recognition of Subsidy Claims is subject to satisfaction of certain conditions mentioned in the related notification. Assessment of recoverability oj the claim is subject to significant judgement of the management including certainty with respect to the satisfaction of conditions specified in the notification/policies, collections thereof.
	We considered the relevant notifications/policies issued by various authorities to ascertain the appropriateness of the recognition of accruals/claims, adjustments to claims already recognised pursuant to changes in the rates and basis for determination of claims.
	Based on the above procedures performed, the managements estimates related to recognition of subsidy accruals/claim and their recoverability are considered to be reasonable.

4. Information other than the financial statements and Auditors Report thereon.

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in Management Discussion and Analysis Report, Boards Report including Annexures to the Boards Report, Corporate Governance Report, but does not include the financial statements and our auditors report thereon.

Our report 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.

5. Managements Responsibility for Financial Statements

The Companys Management & Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 with respect to the preparation of these Ind AS 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgement and estimates _&at₌are reasonable and prudent; and design, implementation and maintenance of adequate internal financi^^Sjjftfil^x that were operating effectively for ensuring the accuracy and completeness of the accounting reeprds, relevaitt<Rsv, to the preparation and presentation of the financial statements that give a true and fair view and are free! from ^c^j 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.

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

6. Auditors Responsibilities 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 judgement and maintain professional skepticism throughout the audit. We also:

a) Identity 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 Companies Act, 2013 we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls reference to financial statement 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 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 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/Cfhlcal 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.

7. Attention is invited to the following points of Note ‘4 of the financial statements.

i) Note 4.1 - regarding confirmation of attachment of Fixed Assets of the Company under the Prevention of Money Laundering Act, 2002 by the Adjudicating Authority.

ii) Note 4.2 - Contingent Liabilities & Commitments.

iii) Note 4.3 - regarding calls in arrears and Redeemable Preference Shares.

8. Net-worth of the Company has completely eroded; the management is of the opinion that the Company shall carry on its business as usual, hence the financial statements of the Company have been prepared on a going concern basis; the appropriateness of the said basis is inter-alia dependent upon future performance and profitability and presently we are unable to express an opinion on the same.

9. Report on Other Legal and Regulatory Requirements

A) As required by the Companies (Auditors Report) Order, 2020 issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in the paragraph 3 and 4 of the Order.

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

(a) Except for the matters described in the basis of Qualified Opinion Paragraph, 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) Except for the matters described in the basis of Qualified Opinion Paragraph, the 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 & Loss (including other comprehensive income), Statement of Changes in Equity and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) Except for the matters described in the basis of Qualified Opinion Paragraph, the aforesaid Ind AS financial statements, comply with the Indian Accounting Standards, specified under Section 133 of the Act;

(e) on the basis of the written representations received from the Directors as on 31^st March, 2023 taken on record by the Board of Directors, none of the Directors is disqualified as on 3 l^sl March, 2023 from being appointed as a Director in terms of Section 164(2) of the Act;

(f) with respect to the recording of Audit Trail (edit log) facility, the feature was not enabled in the accounting software of the Company throughout the audit period.

The provisions are applicable to the Company w.e.f. 01st April, 2023.

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

(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, 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 (Refer note 4.1,4.2,4.4 & 4.7);

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

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, no funds have been advanced or loaned or invested (either from borrowed funds or any other sources) by the Company to/in any person or entity ("Intermediary"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest, in any person or entity, identified in any manner whatsoever ("Ultimate Beneficiaries"), by or on behalf of the Company 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 or entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in any person or entity identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

c) Based on the audit procedures adopted by us, nothing has come to our attention that has caused us to believe that the representations made by the management under sub clause (a) & (b) above, contain any material misstatement.

v. The Company has not declared or paid any dividend, during the year.

C) With respect to the matter to be included in the Auditors Report under Section 197(16):

In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its Director during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any Director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

"ANNEX11RK A" TO IIIK INDEPKMDKNT AUDITORS It FLOUT

(Referred to in paragraph 9 of our report of even date on accounts of Naraingarh Sugar Mills Limited for the year ended 31^s1 March, 2023).

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

B) The Company does not have any Intangible Assets.

b) The Company has a regular programme of physical verification of its Property, Plant & Equipment by which all Property, Plant & Equipment are verified in a phased manner, over a period of three years.

In our opinion, the periodicity of physical verification is reasonable having regarding to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification.

c) According to the information and explanations given by the management & on the basis of examination of the records of the Company, Title Deeds of Immovable Properties are held in the name of the Company.

d) The Company has not revalued its Property, Plant & Equipment (including Right of use assets) or Intangible Assets or both, during the year.

e) According to the information and explanations given by the management & on the basis of examination of the records of the Company, no proceeding has been initiated or pending against the Company for holding any Benami Property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

ii. a) As explained to us, the inventories were physically verified, during the year, by the management at reasonable intervals and we are unable to comment on the method and value of inventory adopted by management.

b) The Company has not 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.

Accordingly, paragraph 3(ii)(b) of the Order is not applicable.

iii. According to the information and explanations given by the management & on the basis of examination of the records, the Company has not made any investment, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured to Companies, Firms, Limited Liability Partnerships or any other parties. Corporate Guarantee given by the Company to the Bank, for the loans given to the Cane Farmers, is not in conformity with the provisions of Section 186 of the Companies Act, 2013.

Accordingly, paragraph 3(iii)(a), (b), (c), (d), (e) and (f) of the Order is not applicable and hence not commented upon.

iv. According to the information and explanations given to us, the Company has not granted any loans or provided any guarantees or security to the parties covered under Section 185 of the Companies Act, 2013. Corporate Guarantee given by the Company to the Bank, for the loans given to the Cane Farmers is not in conformity with the provisions of Section 186 of the Companies Act, 2013.

Accordingly, paragraph 3(iv) of the Order is not applicable.

v. According to the information and explanations given to us, the Company has complied with the provision of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder

vi. We have broadly reviewed the books of account maintained by the Company pursuant to the Companies (Cost Records and Audit) Amendment Rules, 2014 made by the Central Government for the maintenance of cost records under Section 148 of the Companies Act, 2013 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 records with a view to determine whether they are accurate & complete.

vii. a) According to the information & explanations given to us and on the basis of our examinatiniTof the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Goods and Services Tax, Provident Fund, Employees State Insur; jice, Income Tax, Sales Tax, Excise Duty, Custom Duty, Value Added Tax, Cess and othe /S0\ dues, have been regularly deposited, during the year, by the Company with the approprkte SPN authorities. (I^LQjMneiA oik

According to the information and explanations given to us, no undisputed amounts payable, in respect of Goods and Services Tax, Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Excise Duty, Custom Duty, Value Added Tax, Cess and other statutory dues (except Cuite Purchase Tax - f 15.32 lakh, for the financial year, 2016-2017 and Rs8.58 lakh, for the month of April, 2017) were in arrears, as on 31^st 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, there are no statutory dues referred to in sub-clause (a) which have not been deposited with appropriate authorities on account of any dispute, except as mentioned below:

Name of the Statue	Nature of dues	Amount Involved (Rs In lakh)	Amount deposited under protest (Rs In lakh)	Financial Year/Pcriod	Forum where dispute is pending
i. Income Tax Act, 1961	Penalty u/s 271(1 )(c)	5.46	Nil	2007-2008	Income Tax Appellate Tribunal, New Delhi
ii. Central Excise Act, 1944	Excise Duty (inc. penalty)	37.27	2.49	March, 2015 to March, 2016	CESTAT, New Delhi
iii. Finance Act, 1994	Service Tax (inc. penalty)	30.85	4.72	2010-2011	CESTAT, New Delhi
iv. Punjab Sugarcane Act, 1953	Cane Purchase Tax	202.34	Nil	1996-2002	Punjab & Haryana High Court, Chandigarh

viii. According to the information and explanations given to us, the Company has not surrendered or disclosed any income, previously unrecorded in the books of accounts, in the tax assessments under the Income Tax Act, 1961, as income, during the year.

Accordingly, paragraph 3(viii) of the Order is not applicable.

ix. a) Based on our audit procedures and on the basis of information & explanations given by the management, the Company had defaulted in repayment of loans or other borrowings or in the payment of interest thereon, which are as under : [Refer note 4.4]

S.No. Name of Lender	Amount not paid on due date	Whether principal or interest	Period of default
	Rs in Lakh
1. Indian Renewable Energy Development Agency Ltd.	1,439.94	Principal	March, 2020 to March, 2023
2. Indian Renewable Energy Development Agency Ltd.	4,215.15	Interest	March, 2020 to March, 2023
3. The Ambala Central Cooperative Bank Ltd.	9,865.47	Principal	June, 2019 to Sept., 2020
4. The Ambala Central Cooperative Bank Ltd.	Rs 4,562.59	Interest	June, 2020 to March, 2023

b) Willful defaulter: The Company is in default in repayment of loans taken from Banks/Financial institutions. Flowever, we could not able to comment whether Company is willful defaulte^or not.

c) According to the information and records available, the Company has not utilized fdndk fsr the purpose it was availed for, the matter is subjudiced.

d) According to the information and explanations given to us, the Company has utilised short-term funds Rs 11,861.20 lakh for long-term purposes as on 31^s March, 2023.

e) The Company does not have any Subsidiary, Associate or Joint Venture; Accordingly paragraph 3(ix)(e) and (f) of the Order is not applicable.

x. a) According to the information & explanations given to us, the Company has not raised money by way of Initial Public Offer or Further Public Offer (including Debt Instruments), during the year.

b) According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible Debentures, during the year.

xi. a) According to the information available on the records, a case of fraud was lodged by lenders against relative of ex-director and the Company. We are unable to comment on the same as the matter is subjudiced.

b) No report has been filed under Section 143(12) of the Companies Act 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 were received, during the year, by the Company.

xii. According to the information & explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii)(a), (b) and (c) of the Order is not applicable.

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

xiv. a) In our opinion and information and explanations given to us, the internal audit system of the Company is not commensurate with the size and nature of its business, because of issues reported in Report on the Internal Financial Controls (Annexurc- B) b) Reports of the Internal Auditor for the period under audit were not received by us.

xv. According to the information and explanations given to us, during the year, the Company has not entered into any non-cash transactions with its Directors or persons connected to them and hence provisions of Section 192 of the Companies Act are not applicable.

Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi. According to the information & explanations given to us, the Company is not required to be registered under Section 45-1A of the Reserve Bank of India Act, 1934.

Accordingly, paragraph 3(xvi)(a), (b), (c) and (d) of the Order is not applicable.

xvii. According to the information & explanations given to us, the Company has incurred cash losses in the financial year Rs 513.27 lakh and in the immediately preceeding financial year Rs 48.76 lakh.

xviii. According to the information & explanations given to us, there was no resignation of Statutory Auditors, during the year.

Accordingly, paragraph 3(xviii) of the Order is not applicable.

xix. According to the information & 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, 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 our attention, which causes us to believe that any material uncertainty exists as on the date of the 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 a 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 & explanations given to us, the Company is not required to comply with Section 135(5) of the Act. Accordingly, paragraph 3(xx)(a) and (b) of the Order is not applicable.

"ANNKM KK B" TO THE INDICPKNDKNT AUDI TORS REPORT

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

Opinion

We have audited the internal financial controls over financial reporting of Naraingarh Sugar Mills Limited as of 3 I^s1 March, 2023 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 (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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.

Qualified Opinion

According to the information and explanations given to us and based on our audit, material weakness has been identified in the Companys internal financial controls over financial reporting as at 31^st March, 2023 as regards:

a. Contingent Liabilities & Commitments (including default in repaying Bank loans and guarantees) can adversely affect the financial viability of the company. Adverse decision by various adjudication authorities can further erode the working capital as well as Share capital too.

b. Default by company in repaying loan (principal & Interest) from various banking/ financial institutions. An FIR dated 28/12/2021 was lodged u/s 120B, 406,409,420,468 & 47t of IPC against relative of ex-director and other officers of the company, The management of the company is also taken over by the state government. Further land measuring 64 Acre in the name of Company was also attached by Honble Court vide order dated 25/02/2022. These developments can adversely affect to the overall functioning of the company and may also effect the "Going Concern Concept" of the company.

c. Parties balances including balance from Mr. Rahul Anand who is the prime party of FIR along with other firms related to him. (l\ote 4.5, 4.12 & 4.13 of the 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 or interim financial statements will not be prevented or detected on a timely basis.

In our opinion regarding the material weaknesses described above, the Company has failed to maintain adequate internal financial controls over financial reporting with reference to these financial statements as on 31^st March, 2023.