Setco Automotive Ltd Directors Report.

TO

THE MEMBERS OF SETCO AUTOMOTIVE LIMITED

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

OPINION

We have audited the Standalone Financial Statements of Setco Automotive Limited ("the Company"), which comprise the Standalone Balance Sheet as at 31st March 2021, and the Standalone Statement of Profit and Loss (including Other Comprehensive Income), Standalone Statement of Changes in Equity, Standalone Statement of Cash Flows for the year then ended and notes to the Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information

In our opinion and to the best of our information and according to the explanations given to us the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rule 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, 2021, and Loss and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. 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 (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules 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 the standalone financial statement.

EMPHASIS OF MATTER

We draw attention to the following matters in the Notes to the Standalone Ind AS financial statements:

a) The managements assessment of the impact of COVID -19 pandemic on its liquidity position and the recoverability of its assets comprising property, plant and equipment, inventories, receivables and other current assets as at the balance sheet date and on the basis of evaluation, has concluded that no material adjustments are required in the financial statements. (Refer Note No. 53 of Standalone Ind AS Financial Statements).

b) The Companys subsidiary Lava Cast Private Limited has eroded entire net worth due to losses. However, no impairment is provided on value of investment, based on the valuation report of Independent Valuer, as per DCF method. (Refer Note no. 3(b) of Standalone Ind AS Financial Statements).

c) The company has not charged interest on unsecured loan to the subsidiaries. (Refer Note no. 12(a) of Standalone Ind AS Financial Statements).

d) The Company has made investment of Rs. 5860 Lakhs in 9% cumulative compulsorily redeemable preference shares of Setco Engineering Private Limited, a company in which directors have interest. SEPL, being an investment company, derives its major income from Setco Automotive Limited in form of dividend and sales commission. SEPL has incurred loss in current year and hence, the Company has made impairment provision for loss of dividend. (Refer Note No. 33(c) of Standalone Ind AS Financial Statements)

e) The Company has invested Rs. 1,535.00 lakhs in 30,70,000 equity shares of SE Transstadia Private Limited, a company in which directors have interest. The investee Company has eroded entire net worth due to losses. Due to non-payment of interest and instalments, companys accounts with bank have become NPA in December 2018. The investee company has submitted restructuring proposal to bank on 17.06.2020 and the same is under consideration. Based on the future projected profitable operations and report of Independent valuer as per DCF Method, the Company has provided impairment on this investment. (Refer Note No. 33(h) of Standalone Ind AS Financial Statements).

f) Amount receivable of Rs. 426 Lakhs towards sharing of common expenses from SE Transstadia Pvt. Ltd. (SETPL), a company in which directors are interested. Considering current financial position of SETPL, the said amount has remained outstanding. The company has made ECL provision of 20% of the outstanding amount. (Refer Note No. 33(g) of Standalone Ind AS Financial Statements)

g) The Companys wholly owned ultimate foreign subsidiary Setco Automotive UK Ltd. has eroded net worth due to losses. Based on the report of Independent Valuer as per DCF method, provision for impairment has been made on the Investment and loans receivables from the subsidiary Company. (Refer Note No. 33 (b) of Standalone Ind As Financial Statements).

h) The Companys wholly owned foreign subsidiary Setco MEA, DMCC has eroded net worth due to loss. The Company has provided impairment loss against trade receivable equal to the net assets deficit reported by the company. Pending compliance of Bank conditions, the Company could not remit share application money to this foreign subsidiary, since inception and hence, allotment of share and issue of share certificate is pending. The Company has recognized it as investment in the subsidiary company and consolidated the said subsidiary based on 100% control. The Company has decided to close this subsidiary vide Board Resolution dated 09.02.2021. (Refer Note No. 33(d) of Standalone Ind AS Financial Statements)

i) Trade receivables, Trade Payables and other debit/ credit balances are subject to reconciliation and confirmation. (Refer Note No. 44 of Standalone Ind AS Financial Statements).

j) In earlier year, the Company has recognized Rs. 398 Lakhs as income being reimbursement of Central Goods & Service Tax (CGST)/Integrated Goods & Service Tax (IGST) share of State for the Uttarakhand unit pending notification of incentives by the State Government. In absence of any notification in the said matter, the Company has filed writ petition in High Court. Pending any further progress in this matter, the Company has provided for impairment at 100%. (Refer Note No. 33(e) of Standalone Ind AS Financial Statements)

k) An amount of Rs. 1834.99 lakhs (Rs. 3260.97 lakhs) is pending against export receivables as on 31 March 2021, beyond the timelines stipulated under the Foreign Exchange Management Act, 1999. The management of the Company has submitted necessary application with the appropriate authority for condonation of delays to regularize the default. Impact thereof if any, will be considered when such application is disposed off. (Refer Note No. 9 of Standalone Ind AS Financial Statements)

l) The company has provided ECL on investments in Equity and preference shares in WEW Holdings Limited (Mauritius) in respect of its holding in Setco Automotive (UK) Ltd. (Refer Note No. 3(c) of Standalone Ind AS Financial Statements).

m) Capital advances for purchase of machinery to the supplier was unrecoverable and thus 100% impairment provision is made. (Refer Note No. 33(f) of Standalone Ind AS Financial Statements).

n) On physical verification of stocks, stock costing Rs. 1863.92 lakhs were found to be rusty, damaged and unfit for consumption and unretrievable without compromising the quality of finished products. Therefore, such items of stocks are written down in the accounts net of the existing provision and valued at NIL and the net effect is disclosed under the head "Exceptional Items". (Refer Note No. 33(i) of Standalone Ind AS Financial Statements).

o) The company has obtained consent of members to transfer the clutch manufacturing business to a wholly owned subsidiary in EGM held on 22nd May 2021.

Further the company has obtained members consent to purchase trademark/ Brand "LIPE" owned by foreign subsidiaries (SAUL & SANAI) based on valuations done by approved valuers.

In absence of binding agreements/ documents till date in this regard, no effect relating to said proposals are given or recognised in accounts for the year. (Refer to note no. 35 of the accompanying standalone Ind AS financial statement.)

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the Standalone Ind AS Financial Statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Product Development:
Kev Audit Matters How the matter was addressed in the audit
Intangible Assets: Product development 1. Testing managements controls over capitalization of Product development costs.
The Company conducts significant level of development activities and has to apply judgements in identifying product development expenses meeting the criteria for capitalization under the requirements of Ind AS. . Expenditure Identifiable and reliably measurable, incurred on product development yielding future economic benefits is capitalized as Product Development Expenses. We identified the capitalization of Product development costs as a key audit matter due to significant management judgements about the future performance and viability of the products. 2. Evaluating the nature of development expenses incurred that are capitalized into product development expense.
3. Assessing the reasonableness of the capitalization based on success of the product,
4. Verifying amortization of capitalization after commercial production commences as per consistent policy of Company to amortise over 10 years.
5. Obtaining fair valuation of product development capitalised from independent valuer.
6. Checking reasonableness of disclosure relating to research and development in financial statements.
Refer to note no. 2 (iii) of the accompanying standalone Ind AS financial statement.
2. Impairment assessment of long-term investments in, loans receivables and trade receivables from subsidiaries, joint venture and associates.
Kev Audit Matters How the matter was addressed in the audit
The assessment of recoverable amount of the Companys investment in and loans receivable and trade receivables from its subsidiaries and joint venture and other related entity involves significant judgement. The investments are carried at cost less any diminution in value of such investments and tested for impairment at each reporting date. These includes assumptions such as projected cash flows, discount rates, current work on hand, future contract future business plan, claims, recoverability of certain receivables as well as economic assumption such as growth rate. 1. Evaluated and tested the design and implementation of operating effectiveness of controls over the management review process of impairment assessment.
We focused on these areas as key audit matter due to judgement involved in forecasting future cash flows and selection of assumptions. 2. Compared the carrying amount of investment with the expected value of the business based on the discounted cash flow method.
3. Assessed the key assumptions including discount rate and estimated future growth, of independent valuation report obtained by the Company. Compared the previous forecast to actual results to assess the Companys ability to forecast accurately.
4. We checked the loans advanced / repaid in relation to these loans during the year through bank statements.
5. Evaluated accuracy of disclosure in the financial statements.
Refer Note no. 3 & 33 of accompanying Standalone Ind AS financial statements.

INFORMATION OTHER THAN THE STANDALONE 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 Companys annual report i. e. Corporate Information, Board of Directors, Management Discussion and Analysis, Directors Report and Corporate Governance Report but does not include the standalone financial statements and our auditors report thereon. The above information is yet to be provided to us.

MANAGEMENTS RESPONSIBILITIES FOR THE STANDALONE FINANCIAL STATEMENTS

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

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

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

• Obtain an understanding of internal 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 system 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 financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditors Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of section 143 (11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

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

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31st March, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2021 from being appointed as a director in terms of Section 164 (2) of the Act.

f) 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.

g) 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.

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 standalone financial statements - Refer Note 43 B to the standalone financial statements;

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE A TO INDEPENDENT AUDITORS REPORT

Referred to in paragraph under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the Members of Setco Automotive Limited on the Standalone Financial Statements as of and for the year ended on March 31, 2021

1. In respect of its fixed assets :

a) The Company has maintained proper records showing full particulars including, quantitative details and situation, of fixed assets. on the basis of available information.

b) The Company has a program of verification to cover all the items of fixed assets in phased manner, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. During the year, the Company has verified certain fixed assets in accordance with this program. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

c) The title deeds of immovable properties disclosed in Note No. 2 on Fixed Assets to the Standalone Financial Statements are held in the name of the Company. In respect of leased hold land that have been taken on lease and disclosed as fixed assets in the standalone financial statements, the lease agreements are in the name of the Company.

2. According to the information and explanations given to us, inventories (excluding stocks with third parties) were physically verified during the year by the management at reasonable intervals. On verification, the stocks which were found to be rusty, damaged and unfit for consumption and unretrievable without compromising the quality of finished products, such items of stocks were written down in the accounts net of the existing provision and valued at NIL and the net effect is disclosed under the head "Exceptional Items". In respect of inventory lying with third parties, these have substantially been confirmed by them.

3. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 except loans given to its wholly owned ultimate foreign subsidiary companies and Indian subsidiary Company and one Company in which two directors have substantial interest.

a) The terms and conditions of such loans are not prima facie prejudicial to the Companys interest.

b) No schedule of repayment of principal or interest has been stipulated for such loans.

c) In view of (b) above, the question of any overdue amount does not arise.

4. According to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to Loans & Investments made.

5. According to the information and explanations given to us, the Company has not accepted any deposits under the directives issued by the Reserve Bank of India or within the meaning of section 73 to 76 or any other relevant provisions of the Act and the rules framed there under.

6. We have been informed that Company is not required to maintain cost records u/s 148(1) of the Companies Act 2013. The Company has voluntarily maintained sufficient cost records for its internal use. We have broadly reviewed these cost records, however, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. According to the information and explanations given to us and on the basis of our examination of books of account :

a) The Company has been generally regular in depositing undisputed statutory dues with appropriate authorities. There is delay in deposition of Provident Fund and Employees State Insurance for three months, Professional Tax for two months, Goods and Service Tax for two months, TDS, TCS payable for almost twelve months, Income Tax & dividend tax for more than a year. According to the information and explanations given to us, there are undisputed statutory dues in respect of TDS/ TCS payable of Rs. 475.25 lakhs for A.Y 2021-22, Income tax Rs. 328.45 lakhs and dividend tax of Rs. 274.96 lakhs for A.Y 2019-20 outstanding as at 31st March, 2021 for more than six months from the date they became payable.

b) According to information and explanations given to us and records of the Company examined by us, there were disputed dues of Income Tax as of 31st March, 2021 which have not been deposited as per following details :

Sr. Name of the Statute Nature of the dues Amount (Rs. In Lakhs) Related F.Y / A.Y. Forum where dispute is pending Remark, if any
1 Income Tax Act, 1961 Demand Notice U/s 156 0.73 A.Y. 16-17 CIT(A) - Vadodara. *
2 Income Tax Act, 1961 Demand notice u/s 92CA(1) and 92D(3) 0.35 A.Y. 17-18 CIT(A)- Baroda *
3 Income Tax Act, 1961 Demand Notice u/s 156 472.10 A. Y. 11-12 ITAT- Ahmedabad
4 Income Tax Act, 1961 Notice U/s 271(c) - A.Y. 14-15 ITO, National e-assessment centre
5 Income Tax Act, 1961 Income Tax dues as per Intimation u/s 143(1) 2.00 A.Y. 15-16 CPC, Bengaluru *
* Matter covered by ITAT Judgement in Companys own case for earlier years for allowing product development expenses as revenue expense

8. In our opinion and according to the information & explanations given to us, the Company has not defaulted in repayment of loans or borrowing obtained from banks and financial institutions. The Company has neither taken any loan from government nor issued any debentures.

9. In our opinion and according to the information and explanations given to us and examination of records of the Company, the Company has not raised moneys by way initial public offer or further public offer (including debt instruments) during the year.

10. During the course of our examination of the books and records of the Company and according to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees were noticed or reported during the year.

11. The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V of the Act.

12. As the Company is not a Nidhi Company and hence reporting under clause 3(xii) of the Order is not applicable to the Company.

13. As per the information and explanation given to us, the transactions with the related parties are in compliance with Section 177 and 188 of the Act and the details there of have been disclosed in the standalone financial statements as per Ind AS 24, "Related Party Disclosures". (Refer Note No. 38 of the Standalone Financial Statements).

14. As per the information and explanation given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the period under review.

15. As per the information and explanation given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.

16. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

ANNEXURE B TO INDEPENDENT AUDITORS REPORT

Referred to in paragraph (g) under the heading "Report on Other Legal and Regulatory Requirements" by "Section 143(3) of the Act" of our report of even date.

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER SECTION 143(3)(I) OF THE ACT.

We have audited the internal financial controls over financial reporting of Setco Automotive Limited ("the Company") as of 31st March, 2021 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

MANAGEMENTS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the ICAI. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on the Companys internal financial controls 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 (the "Guidance Note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act 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 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 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 standalone 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 standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with 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 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.

OPINION

The Company has in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2021 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 ICAI. However, such internal financial controls over financial reporting need to be improved and strengthened further in future. The Company needs to strengthen its internal control over inventory, fixed assets and receiving external balance confirmation on periodic basis.

For V. Parekh & Associates Chartered Accountants
(Firm Registration No. 107488W)
(Rasesh V. Parekh) Partner
Membership No. 38615
UDIN: 21038615AAAAKL5714
Place : Nathdwara
Date : 8th August 2021