picturehouse media ltd Auditors report

To the Members of

Picturehouse Media Limited, Chennai.

Report on the Audit of the Standalone Financial Statements Qualified Opinion

We have audited the Standalone Ind AS financial statements of Picturehouse Media Limited, Chennai ("the Company"), which comprise the standalone balance sheet as at March 31, 2023, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the Standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Ind AS financial statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph below including the disclosure of "Material Uncertainty Related to Going Concern", the aforesaid Standalone Ind AS financial statements give the information required by the Companies Act, 2013 ("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, its Loss and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

(i) Attention is invited to note no. 43 to the Statement, in relation to inventory i.e., films production expenses amounting to Rs. 2,949.92 Lakhs, consists of advances granted to artists and co-producers. As represented by the Management the film production is under progress with respect to production of 2 movies costing Rs 70.09 lakhs. In respect of the balance inventory of Rs 2,879.83 lakhs the Board is confident of recovering the amount from the production houses. In the absence of documentary evidence as well as the confirmation of balance from the parties relating to the status of the inventory amounting to Rs 2,879.83 lakhs, we are unable to agree with the views of the Board. We are of the opinion that realization of inventories is doubtful but we are also unable to decide the quantum of loss that may arise on account of write down of inventory.

(ii) Attention is invited to note no.44 to the Standalone Financial Statements, Investment in wholly owned subsidiary viz. PVP Capital Limited, Chennai (PVPCL)

The subsidiarys networth stands at Rs. 515.20 lakhs (negative) as at 31.03.2023. The possibility of liberal cash flow is dim. The company has also defaulted in statutory dues are not remitted into the Government. PVPCL has not maintained minimum net owned funds as per RBI Regulations. Under these circumstances, regulatory authorities may cancel its registration as non-banking finance company. However, the Board of the Picturehouse Media Limited considers there is no need to provide for impairment in investment made. We do not agree with that view. But it is difficult to assess correctly the extent of erosion and the loss arising therefrom.

Material Uncertainty relating to Going Concern

We draw attention to the following matters in the Notes to the financial statements

Note No.45 in the financial statements which indicates that the company is advancing for production of movies, it is still incurring losses from operations (negative networth Rs. 4,033.45 lakhs). Adverse key financial ratios, non-payment of statutory dues, impact of our observations made in preceding paragraphs, and other related factors indicate that there is an existence of material uncertainty that will cast significant doubt on the companys ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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 Standalone Ind AS 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 Ind AS financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

independent auditors report on the standalone ind as financial statements to the members of picturehouse media limited, chennai for the year ended march 31, 2023

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Ind AS financial statements of the current year. These matters were addressed in the context of our audit of the Standalone Ind AS financial statements, 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 section, we have determined the matters described below to be the key audit matters to be communicated in our Report.

Contingent Liabilities in relation to Service Tax Litigations

Key audit matter	How the matter was addressed in our audit
The Company has received certain demand orders and notices relating to service tax matters. The company is contesting these demands (refer note no. 49 to the standalone financial statements).	Our audit procedures included the following:
There is high level of judgment required in estimating the level of provisioning. The managements assessment is supported by the facts of matter, their own judgment and advices from legal and independent service tax consultants where ever considered necessary.	(i) Understanding the current status of the service tax litigations.
Accordingly, unexpected adverse outcomes may significantly impact the managements reported loss and the Balance Sheet. We determined the above area as a Key Audit Matter in view of associated uncertainty relating to the outcome of these matters which requires application of judgment in interpretation of law. Accordingly, our audit was focused on analyzing the facts of subject matter under consideration and judgements/interpretation of law involved.	(ii) Examining recent orders and/or communication received from various service tax authorities and follow up action thereon.
	(iii) Evaluating the merit of the subject matter under consideration with reference to the grounds presented therein and available independent legal advice; and
	(iv) Review and analysis of evaluation of the contentions of the management through discussions, collection of details of the subject matter under consideration, the likely outcome and consequent potential outflows on service tax issues.

As a result of the above audit procedures no material differences were noted. We confirm the adequacy of disclosures made in the Standalone Ind AS Financial Statements.

Information Other than the Standalone Ind AS financial statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the management discussion and analysis, Boards Report including annexures to Boards Report and Report on Corporate Governance but does not include the standalone financial statements and our auditors report thereon. The above reports are expected to be made available to us after the date of the auditors report.

Our opinion on the standalone financial statements does not cover the other information and we will 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 when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the above reports, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance

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 the Management and Those Charged with Governance for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the 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 Ind AS 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 Ind AS financial statements, the Board of Directors 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 Ind AS financial statements

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

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

• Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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

• Conclude on the appropriateness of 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 Ind AS 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 Ind AS financial statements, including the disclosures, and whether the Standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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 Ind AS 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

As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(1l) of the Act, we give in "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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) Except for the effects of the matter 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 standalone Balance Sheet, the standalone Statement of Profit and Loss (including other comprehensive income), the standalone Statement of Changes in Equity and the standalone Cash Flows statement dealt with by this Report are in agreement with the books of account.

(d) Except for the effects of the matter described in the Basis for Qualified Opinion Paragraph above, in our opinion, the aforesaid Standalone Ind AS financial statements comply with the Ind AS specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) The matter described in the Basis for Qualified Opinion Paragraph above, in our opinion, may have an adverse effect on the functioning of the company

(f) On the basis of the written representations received from the directors as on 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.

(g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion Paragraph above

(h) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2".

(i) 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, during the year, the company has not paid remuneration to director(s). Therefore, the question of remuneration paid to the directors over and above the limits laid down under this section doesnt arise.

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 March 31, 2023 on its financial position in its Standalone Ind AS financial statements - refer note 49 to the Standalone Ind AS financial statements;

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

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

iv. a) The Board 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 or entity, including foreign entity ("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 Board has represented, that, to the best of its knowledge and belief, other than as disclosed in the note no15 to financial statements, no funds have been received by the Company from any person or entity, including foreign entity ("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 that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations provided under sub-clause (a) and (b) above, contain any material misstatement.

v. The company has not declared any dividend during the year. Hence, reporting with respect to compliance with the provisions of section 123 of the Act does not arise.

	For R P S V & Co.,
	Chartered Accountants
	Firms Registration Number: 0013151S
	D Purandhar
	Partner
	Membership no.: 221759
	ICAI UDIN: 23221759BGWAJM2650
Place: Chennai
Dated: May 23, 2023

Annexure 1 referred to in our report under "Report on Other Legal and Regulatory requirements Para 1" of even date on the accounts 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.

(B) The company does not own any intangible assets and hence para 3(i)(a) (B) is not applicable to the company.

(b) Property, Plant and Equipment are verified physically by the management in accordance with a regular programme at reasonable intervals. In our opinion the interval is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The Company does not have any immovable property and hence paragraph 3(i) (c) of the Order is not applicable to the Company

(d) The company has not revalued its Property, Plant and Equipment, (including Right of Use assets) during the year. The Company does not own any intangible assets.

(e) As explained to us by the Management no proceedings have been initiated during the year or are pending against the company as at March 31, 2023 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 by the management, the company is a service company, namely movie production.

The movie production/ making of content require various types, qualities of content related consumable and inputs. Due to the multiplicity and complexity of the items, it is not practicable to maintain the quantitative records/ continuous stock register. All the purchases of content related consumable/consumables are treated as consumed. In view of this, the company does not maintain stock register and also does not carry out physical verification of stock.

b) The company has not been sanctioned any working capital limits from banks or financial institutions on the basis of security of current assets and hence reporting under para 3(ii) (b) is not applicable

(iii) During the year, the company has neither made any investment , nor furnished any guarantee nor provided security nor granted any loan or advances in the nature of loans , secured or unsecured, to companies ( other than one wholly owned subsidiary), firms ,Limited Liability partnerships or any other parties. During the year the company has made interest free loan without specifying any term or period of repayment to one of its wholly owned subsidiary companies and treated the same as deemed investment as prescribed under Ind AS.

(a) During the year the company has made interest free loan to one of its wholly owned subsidiary companies and treated the same as deemed investment as prescribed under Ind AS

(A) - the aggregate amount of interest free loans advanced to the wholly owned subsidiary company during the year is Rs 0.97 lakhs

-the company has not made a provision of Rs 0.97 lakhs during the year and the balance outstanding as at the year end is 1.18 Lakhs.

The company does not have joint venture or an associate.

(B) During the year ,the company has not made any loans or advances and has not furnished guarantees or provided security to any party other than a wholly owned subsidiary. The balance outstanding at the balance sheet date with respect to loans and advances granted to other parties is Rs. Nil.

(b) The loan granted during the year as mentioned above is interest free and was fully provided for in the books of the company and hence it is prejudicial to the companys interest.

(c) The company has treated the interest free loan made to its wholly owned subsidiary as deemed investment as per Ind AS and hence reporting under clauses iii (c) ,iiii (d), iii (e) of para 3 of the Order, does not arise.

(d) During the year the company has made interest free loan without specifying any term or period of repayment to one of its wholly owned subsidiary companies and treated the same as deemed investment as prescribed under Ind AS. Aggregate amount of loan granted during the year is Rs 0.97 lakhs and percentage thereof to total loans granted during the year is 100%.

(iv) According to the information and explanations given to us, the company has complied with the provisions of section 185 of the companies act with respect to loans granted , investments made, guarantee furnished and security provided, as applicable. In respect of investments made, guarantee

furnished and security provided the company has complied with the provisions of Section 186 of the Act. However in respect of loans and advances granted, the company has not charged any interest and hence not in compliance with the provisions of section 186 of the Act.

(v) The company has not accepted any deposit or amounts deemed to be deposits as mentioned in the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 of the Act or any other relevant provisions of the Act and the rules framed thereunder. Accordingly, reporting under clause v of para 3 of the Order is not applicable.

(vi) The Central Government has not prescribed the maintenance of cost records for any of the products of the company under sub-section (1) of section 148 of the Act and hence reporting under this clause does not arise.

(vii) (a) According to the records provided to us, the company is generally regular (other than the dues mentioned below) in depositing undisputed statutory dues including Provident Fund, Employees State Insurance. Income Tax (including Tax Deducted at Source), Duty of Customs, Goods and Service Tax, Cess and other statutory dues with the appropriate authorities wherever applicable. The following undisputed amount is outstanding for a period of more than 6 months from the date they became payable

Name of the statue	Nature of Dues	Amount Rs in lakhs	Period to which it relates	Date of payment
Finance Act ,1994	Service Tax	4.69	RCM Payable as on 31.03.2017	Yet to be remitted
Income Tax Act, 1961	Tax deducted at source (TDS)	478.96	April 2016 to August 2021	-do-
Income Tax Act, 1961	Interest on TDS	329.30	April 2016 to March 2022	-do-
Goods and Service Act, 2017	Interest on GST payable	5.96	April 2017 to March 2019	-do-

(b) According to the information and explanation given to us, the dues outstanding with respect to income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and goods and service tax on account of any dispute, are as follows:

Name of the statue	Nature of Dues	Amount Rs in lakhs	Period to which it relates	Forum where dispute is pending
Finance Act ,1994	Service Tax	1604.76 (including penalty of 802.43)	FY 2011-12 to FY 2014-15	Customs, Excise & Service tax appellate tribunal
Finance Act ,1994	Service Tax	155.42 & penalty of 15.64	FY 2015-16 to FY 2017-18 (till June 2017)	Customs, Excise & Service tax appellate tribunal
Finance Act ,1994	Service Tax	117.58	FY 2015-16	Customs, Excise & Service tax appellate tribunal

(viii) According to the information and explanations furnished to us, the company has not surrendered or disclosed any transaction, previously unrecorded in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year.

(ix) (a) The company has neither defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender.

(b) The company has not been declared wilful defaulter by any bank or financial institution or other lender.

(c) The company has not availed any term loan and hence reporting under clause (ix) (c) is not applicable.

(d) The funds raised on short term basis have not been utilized for long term purposes.

(e) The company has not availed any funds from any entity or person on account of or to meet the obligations of its wholly owned subsidiaries. The company does not have a joint venture or an associate.

(f) The company has not raised loans during the year on the pledge of securities held in its subsidiaries. The company does not have a joint venture or an associate.

(x) (a) The Company has not raised money by way of public issue offer or further public offer (including debt instruments) and hence the question of utilization of money raised by way of initial public offer does not arise.

(b) The company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year and hence reporting under this clause does not arise.

(xi) (a) Based on the audit procedures adopted and information and explanations furnished to us by the management, no fraud on or by the company has been noticed or reported during the year.

(b) In view of what is stated in point no. xi (a) above, no report under sub-section 12 of section 143 of Companies Act, 2013 has been filed in Form ADT-4 during the year.

(c) According to information furnished to us, the company has not received any whistle-blower complaints during the year.

(xii) The Company is not a Nidhi Company. Therefore, reporting under paragraph 3(xii) of the Order is not applicable to the Company

(xiii) According to the information and explanation given to us, all transactions entered into by the Company with the related parties are in compliance with section 177 and 188 of the Act, where applicable and the details have been disclosed in the Standalone Ind AS Financial Statements etc., as required by the applicable accounting standards.

(xiv) (a) In our opinion, the company has an internal audit system commensurate with its size and nature of its business.

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

(xv) According to the information and explanations furnished to us, the company has not entered into any noncash transactions with directors or persons connected with him as referred to in section 192 of Act.

(xvi) (a) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934). Hence, the provisions of clause 3 (xvi) (a) is not applicable to the company.

(b) The company has not conducted any non banking financial or housing finance activities. Hence, reporting under this para 3 (xvi) (b) is not applicable to the company.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, para 3 (xvi) (c) of the order is not applicable

(d) In our opinion, the group has more the one core investment company as part of the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) .There are two core investment companies which are part of the group

(xvii) The company has incurred cash loss of Rs. 565.97 Lakhs in the financial year. The company has not incurred cash loss in the preceding financial year .

(xviii) During the year, there is no resignation of statutory auditors. Accordingly , reporting under this clause 3

(xviii) is not applicable.

(xix) Based on the information available and explanations furnished to us , in respect of loan availed from one party(balance as at the year end - Rs 6496.44 lakhs), there is no fixed due date for repayment within a period of one year from the balance sheet date. We have been represented that steps are being taken to extend the tenor of the loan .However report under this clause has to be read along with point no (iv) of "Basis of Qualified Opinion paragraph regarding Going Concern.

(xx) (a) The company was not required to spend Corporate Social Responsibility expenditure under section 135 of the Act for the financial year ended March 31, 2023.

(b) The company was not required to spend under section 135 of the Act for the financial year ended March 31, 2023. Hence reporting under this sub clause does not arise.

(xxi) Regarding qualifications or adverse remarks by the respective auditors in the Companies (Auditors Report) Order (CARO) reports of the companies included in the consolidated financial statements, refer Point no 2 under " Report on Other Legal and Regulatory Requirements" in our report of even date on Consolidated Financial Statements.

independent auditors report on the standalone ind as financial statements to the members of picturehouse media limited, chennai for the year ended march 31, 2023

annexure - 2 to independent auditors report to the members on the standalone financial statements of picturehouse media limited, chennai for the year ended march 31, 2023

Report on the Internal Financial Controls with reference to Financial Statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls with reference to standalone financial statements of Picturehouse Media Limited, Chennai ("the Company") as of March 31, 2023 in conjunction with our audit of the standalone financial statements of the Company for the period ended on that date.

Managements Responsibility for Internal Financial Controls with reference to Financial Statements

The Companys management is responsible for establishing and maintaining internal financial controls with reference to financial statements based on 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 with reference to financial statements 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 based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements, both issued by ICAI. Those Standards and the Guidance

Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the 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 with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

A companys internal financial control with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control with reference to financial statements includes those policies and procedures that;

I. pertain to the maintenance of records, that in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

II. 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

III. provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls to future periods are subject to the risk that the internal financial control 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.

Qualified Opinion

According to the information and explanations given to us and based on our audit, the following weaknesses have been identified in the operating effectiveness of the companys internal financial control over financial reporting with reference to the standalone financial statements as at 31st March, 2023

"The companys internal financial control with regard to assessment of carrying value of loans and advances and inventory as more fully explained in note nos.43 and 44 to these financial statements were not operating effectively and could potentially result in the understatement to the carrying value of such assets and also company needs to strengthen its documentation relating to disbursement of loans".

Attention is also invited to Basis of our Qualified Opinion in our main report.

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, except for the possible effects of the material weakness described above on the achievement of the objectives of the control criteria, the company has, maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as 31st March, 2023, based on internal control over financial reporting established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the ICAI

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 the standalone financial statements of the company and we have issued a qualified opinion on the standalone financial statements.

	For R P S V & Co.,
	Chartered Accountants
	Firms Registration Number: 0013151S
	D Purandhar
	Partner
	Membership no.: 221759
	ICAI UDIN: 23221759BGWAJM2650
Place: Chennai
Dated: May 23, 2023