rts power corporation ltd share price Auditors report


To the Members of

RTS Power Corporation Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the standalone Ind AS financial statements of RTS Power Corporation Limited ("the Company"), which comprises the Balance sheet as at 31st March 2023, and the Statement of Profit and Loss (Including Other Comprehensive Income), Cash Flow Statement and the Statement of changes in equity for the year ended, and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information for the year ended on that date (hereinafter referred to as "standalone Ind AS financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its profits (including other comprehensive income) and its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) 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 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 Companies Act, 2013 and the Rules made 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 opinion on standalone Ind AS financial Statements.

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

Sl No.

Key Audit Matters

Auditors Response

Verification of Inventories and Valuation thereof

1.

The size of the Inventory relative to the total assets of the Company and the estimates and judgements described below, the determination and valuation of Inventory required significant audit attention.

Our audit procedures based on which we arrived at the conclusion regarding reasonableness of determination of year-end inventory and valuation thereof include the following:
As disclosed in Note 3.11, Inventories are held at lower of cost or Net Realizable Value determined using the First in First Out method. At year end, valuation of Inventories is reviewed by the management and the cost of Inventory is reduced in cases where the Net Realizable value is lower. Evaluating the accounting policy followed for valuation of inventory and appropriateness thereof with respect to relevant accounting standards in this respect.
Management reviews the Ageing reports together with historical trends to estimate the likely future salability of slow moving and older inventory items and performed a line-by-line analysis to ensure that it is stated at the lower of cost or net realizable value. Review of the process of physical verification and reconciliation with the book stock.
Understanding and testing the design and operating effectiveness of controls as established by the management in determination of cost of production and inventory and consistency with respect to policy followed in this regard.
Assessing the adequacy of the method used, relevance and reliability of data and the systems & procedures followed for arriving at the cost of inventory.
We have examined the valuation process/ methodology and checks being performed at multiple levels to ensure that the valuation is consistent with and as per the policy followed in this respect.
Sl No.

Key Audit Matters

Auditors Response

2.

Trade Receivables

Gross Trade Receivable of the Company includes significant amounts, which have fallen due for payment and are lying outstanding for a considerable period of time. (Note No. 15 of the standalone Ind AS financial statements) Our audit procedures based on which we arrived at the conclusion regarding the carrying amount of Trade Receivables include the following:
The Company evaluates whether there is any objective evidence that trade receivables are impaired and determines the amount of impairment allowance as a result of the inability of the customers to make required payments. The Company bases the estimates on the ageing of the trade receivables balance, creditworthiness of the trade receivables and historical write-off experience. We obtained an understanding from the Management, assessed and tested the design and operating effectiveness of the Companys key controls over the recoveries against the outstanding amounts and resultant impairment assessment of material Trade Receivables;
We reviewed Managements assessment and evaluation on the credit worthiness of the major trade receivables and historical trends and current dealing with the customers;
We further discussed with the Management the adequacy of the impairment as recognized and reviewed the supporting documents provided in relation to such assessment.
3.

Provisions and Contingencies

Recognition of provision and/or disclosure for contingencies are based on estimates requiring application of judgement with respect to existing facts and circumstances which are subject to variation on actual crystallization. Our audit procedures based on which we arrived at the conclusion regarding reasonableness of the Contingent Liabilities include the following:
The Company has certain outstanding matters involving direct and indirect taxes which are pending before appropriate authorities. (Note 44 of Standalone Ind AS Financial Statements) We tested the effectiveness of controls for estimating the possible effect of matters keeping in view the provisions of the relevant laws and regulations;
Management judgment for estimating the possible outflow of resources, if any, in respect of contingencies/ claim/ litigations/ against the Company is essential as it is not possible to predict the outcome of pending matters with accuracy. We discussed with management the recent developments and the status of the matters having significant application;
We reviewed Managements judgements relating to the estimates keeping in view the expected outcome thereof;
Due consideration has been given to experts view and opinion on the matters of significance;
Reviewed the appropriateness and adequacy of amounts involved, as required in terms of the requirement of IND AS 37 "Provisions, Contingent Liabilities and Contingent Assets".

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, Corporate Governance and Shareholders Information, but does not include the standalone Ind AS financial statements and our auditors report thereon.

Our opinion on the standalone Ind AS 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 Ind AS 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 Ind AS 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.

Responsibility of the Management 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 gives a true and fair view of the standalone financial position, standalone financial performance, standalone 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) prescribed 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 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 gives 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, 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 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 financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
  • 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 ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone 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.

Report on Other Legal and Regulatory Requirements

  1. As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the 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:
    1. 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;
    2. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
    3. 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 Statements of Cash Flows dealt with by this report are in agreement with the books of account;
    4. In our opinion, 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 Statement of Cash flows comply with the Indian Accounting Standards (Ind AS) specified under section 133 of the Act;
    5. On the basis of the written representations received from the directors as on March 31, 2023 and 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;
    6. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting;
    7. With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended: In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
    8. 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:
    9. The company has disclosed the impact of pending litigations which would impact financial position. (Refer Note 44 to standalone Ind AS Financial statement)
    1. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
    2. There has been no delay in transferring amounts, which were required to be transferred to the Investor Education and Protection Fund by the Company.
    3. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the

Company to or in any other person 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;

      1. The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) 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;
      2. 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 under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement
    1. The Company has not declared any dividend during the year.
    2. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

For Jain Shrimal & Co.

Chartered Accountants

FRN: 001704C

(Anshul Chittora)

Partner

Place: Jaipur Membership Number: 414627

Date: May 30, 2023 UDIN:23414627BGXOLD3745

The Annexure referred to in our Independent Auditors Report to the members of RTS Power Corporation Limited (the Company) on the Ind AS financial statements for the year ended on 31st March 2023. We report that:

  1. In respect of the Companys Property, Plant and Equipment:
    1. The Company
      1. has maintained proper records showing full particulars, including quantitative details and situation of Property Plant and Equipment.
      2. has maintained proper records showing full particulars, of intangible assets.
    2. Property, Plant and Equipment have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.
    3. According to information and explanation given to us and the records examined by us including registered title deeds, we report that, the title deeds of all immovable properties disclosed in the standalone Ind AS financial statements are held in the name of company.
    4. According to information and explanation given to us and records examined by us we report that company has not revalued its Property, Plant and equipment (including Right of use assets) or intangible assets or both during the year.
    5. According to information and explanation given to us and records examined by us we report that no proceeding have been initiated or are pending against company for holding any benami property under the Benami Transaction (Prohibition) Act 1988 (45 of 1988) and rules made thereunder.
  2. In respect of Inventory:
    1. In our opinion and according to the information and explanations given to us, physical verification of inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed on physical verification.
    2. The Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of certain current assets in respect of which monthly statements (hereinafter referred to as "Statements") have been filed with the banks. These Statements have been prepared in accordance with the books of account and there are no material differences at the quarter ends in this respect other than those as set out below:

    (Rs in Lakhs)

    Name of Bank

    Quarter Ended on

    Amount of current assets as charged to the banks Difference

    Amount as per Books

    Amount as per Statement filed with bank

    State Bank of India, Dhulagarh 30/06/2022 802.25 858.59 -56.34
    30/09/2022 845.98 1,128.25 -282.27
    31/12/2022 1,191.69 1,324.95 -133.26
    31/03/2023 1,778.73 1,923.54 -144.81
    ICICI Bank, Bank of Baroda & Punjab National Bank, Jaipur 30/06/2022 1241.92 1171.47 70.45
    30/09/2022 1290.11 1259.58 30.54
    31/12/2022 1246.94 1343.56 -96.62
    31/03/2023 1084.39 1005.02 79.37
  3. a) The Company has made investments during the year The Company has not provided any guarantee or security or not provided any loans/advance in nature of loans, secured or unsecured to any Companies or firms during the year except loan given to its wholly owned subsidiary ‘Reengus Wires Private Limited amounting Rs 1130 Lakhs and balance outstanding at balance sheet date is Nil.
  1. In respect of the aforesaid investments made and loans granted, the terms and conditions under which such investments made and loans granted are not prejudicial to the Companys interest.
  2. According to the information and explanations given to us and based on the audit procedures performed by us the schedule of repayment of principal and payment of interest have been stipulated for loans and advances in nature of loans, and the repayments of principal amount of loans and receipts of interest have been regular during the year.
  3. According to the information and explanations given to us and based on the audit procedures performed by us there is no amount overdue of loans and advances in the nature of loans granted by the company.
  4. There were no loans /advances in nature of loans which fell due during the year and were renewed/ extended. Further, no fresh loans were granted to same parties to settle the overdue loans/advances in nature of loan.
  5. The company has not granted any loan without specifying any terms of period of repayment. So, reporting under clause 3(iii)(f) is not required.
  1. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of Companies Act 2013 in respect of any loans, guarantees or security or any investments.
  2. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits or no amount which are deemed to be deposit under the provisions of Sections 73 to Section 76 or any other relevant provisions of the Companies Act, 2013 during the year. Hence, the provisions of Clause 3(v) of the Order are not applicable to the Company.
  3. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records U/s 148 (1) of the Companies Act 2013 relating to activities for which such rules are applicable, and on the basis of certificate received from cost accountant by the company, are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.
  4. According to the information and explanations given to us in respect of statutory dues:
    1. The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Sales Tax, Value Added Tax, duty of Custom, duty of Excise, Cess, Goods and Service Tax and other statutory dues with the appropriate authorities during the year. No undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2023 for a period of more than six months from the date they became payable.
    2. According to the information and explanations given to us, there are no dues of income tax, sales tax, service tax, Goods and Service Tax, duty of customs duty, duty of excise duty or value added tax and cess which have not been deposited on account of any dispute except are as stated here-under:
    Name of the Statute Nature of Dues Period to which the Amount relates

    Amount (Rupees in Lakhs)

    Forum Where dispute is Pending

    Value Added Tax and Central Sales Tax Act, 1956

    VAT, CST, including interest thereon on Freight and Insurance 2007-08 14.99

    Revision pending before Tax Board, Rajasthan

    2008-09 20.84
    2009-10 19.44
    2010-11 24.13
    The Central Excise Act, 1944 Excise Duty Apr-14 to Jun-17 59.94 Revision pending before Commissioner Appeals
    The Central Excise Act, 1944 Excise Duty Oct-16 to Jun-17 5.01 Revision pending before Commissioner Appeals
    West Bengal Value Added Tax Act, 2003 Value Added Tax 2009-10 40.46

    Revision pending before Appellate Authority of Sales Tax

    West Bengal Value Added Tax Act, 2003 Value Added Tax 2016-17 2.5

    Revision pending before West Bengal Taxation Tribunal

    Income Tax Act, 1961 Demand u/s 156 AY 2014-15 66.09 Appeal pending before Commissioner Appeals
    Income Tax Act, 1961 Penalty u/s 274 AY 2018-19 52.59 Appeal pending before Commissioner Appeals
  5. Company has not surrendered or disclosed as income during the year in income tax assessment under income tax act, 1961 and accordingly reporting under clause 3(viii) of the Order is not applicable to the company.
  6. a) According to the information and explanations given to us, the company has not defaulted in repayment of loans and other borrowings or in the payment of interest thereon to any lender during the relevant financial year.
  1. According to the information and explanations given to us and on the basis of our audit procedures, we report that the company has not been declared wilful defaulter by any bank or financial institution or any lender.
  2. In our opinion and according to the information and explanations given to us, no term loans has been obtained by the company.
  3. According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the standalone Ind AS financial statements of the company, we report that the funds raised on short term basis have not been utilised for long term purpose.
  4. According to the information and explanations given to us and on an overall examination of the financial statements of the company, we report that Company has not taken any fund from any entity or a person on account of or to meet the obligation of its subsidiaries, associates or joint ventures.
  5. 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, joint ventures or associate companies.
  1. a) In our opinion and according to the information and explanations given to us, Company has not raised money by way of initial public offer or further public offer (including debt instrument) during the year and accordingly reporting under clause 3(x)(a) of the order is not applicable.
  2. b) In our opinion and according to the information and explanations given to us, Company has not made any preferential allotment or private placement of shares or convertible debentures during the year and accordingly reporting under clause 3 (x)(b) of the order is not applicable.

  3. a) According to the information and explanations given to us, no fraud by the company and no material fraud on the company has been noticed or reported during the year.
  1. Clause 3(xi)(b) is not applicable to the company in view of no fraud occurred during the year.
  2. As represented to us by the management, there are no whistle blower complaints received by the company during the year.
  1. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
  2. According to the information and explanations given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, where applicable and details have been disclosed in the standalone Ind AS financial statements as required by the applicable Indian Accounting Standards.
  3. a) In our opinion and based on our examination, the company has an internal audit system commensurate with the size and nature of its business.
  1. Reports of the internal auditors for the period under audit were considered by us.
  1. 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 him and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the company. Accordingly, paragraph 3(xv) of the Order is not applicable.
  2. a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable.
    1. Company has not conducted any non-banking financial or housing financial activity during the year.
    2. Company is not a core investment company (CIC) as defined in the regulation made by Reserve bank of India.
  1. Company has not incurred any cash loss in the financial year and immediately preceding financial year and has no accumulated losses.
  2. The Previous statutory auditor of the company retired due to rotation in pursuance to the provisions of the Companies Act, 2013 and rules made thereunder and we were appointed as an auditor in the last AGM of the company. Further, no issues, objections or concerns were raised by the outgoing auditors
  3. According to the information and explanations given to us and on the basis of the financial ratios, aging 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.
  4. a) There is no unspent amount which is to be transferred to a Fund specified in Schedule VII to the Companies Act Accordingly, reporting under clause 3(xx)(a) of the order is not applicable.
  5. b) According to the information and explanations given to us and based on our examination of the books and records of the Company there are no amount unspent under section 5 of section 135 of the Act pursuant to any ongoing project. Accordingly, reporting under clause 3(xx)(b) of the order is not applicable.

  6. The reporting under paragraph 3(xxi) of the Order is not applicable in respect of audit of standalone Ind AS financial statements.

For Jain Shrimal & Co.

Chartered Accountants

FRN: 001704C

(Anshul Chittora)

Partner

Place: Jaipur Membership Number: 414627

Date: May 30, 2023 UDIN:23414627BGXOLD3745

"Annexure B" to the Independent Auditors Report :

(Referred to in paragraph 2 (f) under ‘Report on Other Legal and Regulatory Requirements of our report of even date)

Report on the Internal Financial Controls with reference to Standalone Ind AS 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 the Standalone Ind AS Financial Statements of RTS Power Corporation Limited ("the Company") as at March 31, 2023 in conjunction with our audit of the Standalone Ind AS 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 financial controls with reference to Standalone Ind AS 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 the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to Standalone Ind AS Financial Statements based on our audit. We conducted our audit in accordance with the Guidance Note issued by the ICAI and the Standards on Auditing notified under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to the Standalone Ind AS Financial Statements. 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 control with reference to Standalone Ind AS 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 with reference to Standalone Ind AS Financial Statements and their operating effectiveness. Our audit of internal financial controls with reference to Standalone Ind AS Financial Statements included obtaining an understanding of such internal financial controls with reference to Standalone Ind AS 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 Ind AS 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 with reference to Standalone Ind AS Financial Statements.

Meaning of Internal Financial Controls with reference to Standalone Ind AS Financial Statements

A Companys internal financial control with reference to Standalone Ind AS Financial Statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone

"Annexure B" to the Independent Auditors Report :

Ind AS Financial Statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial control with reference to Standalone Ind AS 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 Ind AS 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 Standalone Ind AS Financial Statements.

Inherent Limitations of Internal Financial Controls with reference to Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls with reference to Standalone Ind AS 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 with reference to Standalone Ind AS Financial Statements to future periods are subject to the risk that the internal financial control with reference to Standalone Ind AS Financial Statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls with reference to Standalone Ind AS Financial Statements and such internal financial controls with reference to Standalone Ind AS Financial Statements were operating effectively as at March 31, 2023, based on the internal financial controls with reference to Standalone Ind AS Financial Statements criteria established by the Company considering the essential components of internal control stated in the

Guidance Note issued by the Institute of Chartered Accountants of India.