thakral services india ltd share price Auditors report

To the members of Thakral Services (India) Limited

Report on the Audit of Financial Statements Qualified

Opinion:

1. We have audited the accompanying Financial Statements of M/s. Thakral Services (India) Limited (the "Company"), which comprises the Balance Sheet as at March 31, 2022, the statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the statement of Cash Flow for the year then ended, March 31, 2022, and the Notes to the financial statements, including a summary of the significant accounting policies and other explanatory information. (herein after referred as "financial statements")

2. 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 matters described in the Basis for Qualified Opinion section of our report, the aforesaid financial statements for the year ended March 31, 2022 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 accounting principles generally accepted in India including Indian Accounting Standards ("Ind AS") specified under section 133 of the Act, of the state of affairs (financial position) of the Company as at March 31, 2022 and its loss (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion:

3. The company has trade receivables, retention Money receivable from the customers and earnest money deposits amounting to Rs. 1,101.08 Lakhs for which Company has neither obtained balance confirmations nor statement of account from its customers to reconcile the receivables. Further significant trade receivables amounting to Rs.582.39 Lakhs is outstanding for a period of more than six months. As a result of this, we are unable to comment on the provision to be accrued for the doubtful receivables/expected credit losses in respect of trade receivables, retention money receivable from the Customers and earnest money deposits as on the balance sheet date and its consequential impact on the financial statements.

4. The company has closing stock amounting to Rs. 272.46 Lakhs as on March 31, 2022 out of which inventory amounting to Rs.22.40 Lakhs are lying with customers. However, company has neither conducted physical verification nor obtained supporting documents from the customers to confirm that stock is available with them. Accordingly, we are unable to comment on the existence of the stock lying with the customers as per books of account and its impact on the carrying value of the inventory as on March 31, 2022.

5. The Company has obtained interest free loans and have an outstanding amount of Rs. 1,095.35 lakhs as on March 31, 2022. As per Ind AS 109 ‘Financial Instruments, the Company has to recognize interest free loan at amortised cost by discounting the interest free loan and amortize the interest expense over the loan period by applying the effective interest rate. However, the Company has not been accounted any Ind AS adjustment as per Ind AS 109 in the financial statements. Accordingly, we are unable to comment on the same.

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 Financial Statement 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 (‘the ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinion.

Going Concern:

6. We draw attention to note 41 of the financial statements, that the Company has accumulated losses of Rs.558.31 Lakhs as on March 31, 2022 and its net worth has been fully eroded which indicate that a material uncertainty exists that may cast significant doubt on the Companys ability to continue as a going concern.

Based on the customer orders on hand and future projections, the Company is expecting positive cash flows in the subsequent years, further the Company has raised interest free loans to clear the Bank loans and other statutory dues, and considering the past experience in the recovery of the overdue trade receivables, the Company has prepared its financial statements by applying the going concern assumption.

Our opinion is not modified in respect of this matter.

Emphasis of Matter:

7. Without qualifying our opinion, we draw attention to Note 42 of the financial statements which deals with subsequent events and specifically the possible effects of the future implications of COVID- 19 Pandemic on the companys future prospects, performance and cash flows. Management have also described how they plan to deal with these events and circumstances.

Our opinion is not modified in respect of this matter.

Information other than the Financial Statements and the Auditors Report thereon:

8. The Companys Board of Directors is responsible for the other Information. The other information comprises the information included in the Annual Report, but does not include the financial statement and our auditors report thereon. The Annual report is expected to be made available to us after the date this auditors report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information 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 Annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matters to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Financial Statements:

9. The accompanying financial statements have been approved by the Companys Board of Directors .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 financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act 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 accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

10. In preparing the financial statements, the Board of Directors are 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.

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

Auditors Responsibility for the Audit of the Ind AS Financial Statements:

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

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

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

ii. 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 system in place and the operating effectiveness of such controls.

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

iv. Conclude on the appropriateness of the 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 a significant doubt on the companys ability to continue as going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

14. Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, make it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and quantitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

15. 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.

16. 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:

17. With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) if the Act, as amended:

In our opinion and to the best of information and according to the explanations given to us, the remuneration paid by the Company to its directors/ managers during the current year is in accordance with the provisions of Section 197 read with schedule V of the Act.

18. 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 Companies Act, 2013, we give in "Annexure-A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extend applicable.

19. 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 purpose of our audit;

b) Except for the possible effects of the matters described in the Basis for Qualified Opinion section, proper books of accounts 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), Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of accounts;

d) Except for the possible effects of the matters described in the Basis for Qualified Opinion section, the aforesaid financial statements comply with Ind AS specified under Section 133 of the Act;

e) The matters specified in the Basis for the Qualified Opinion section, in our opinion, may have an adverse effect on the functioning of the company.

f) On the basis of written representations received from the directors as on March 31, 2022 taken on record by the Board of directors, none of the directors are disqualified as on March 31, 2022 from being appointed as directors in terms of Section 164(2) of the Act;

g) The qualification relating to the maintenance of accounts and other matters connected therewith are stated in the Basis for Qualified Opinion paragraph section;

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, we refer our separate report in "Annexure B". Our report expresses a qualified opinion on the adequacy and the operating effectiveness of the companys internal financial controls with reference to financial statements.

INDEPENDENT AUDITORS REPORT

i) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - (Refer Note No 35 to the 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 were no amounts required to be transferred to the Investor Education and Protection Fund by the Company.

iv. a. The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any persons or entities, including foreign entities (‘the 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 (‘the Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

b. The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities (‘the Funding Parties), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our attention that causes us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.

v. The Company has not declared or paid any dividend during the year ended March 31, 2022.

	For K.S. Rao & Co.,
	Chartered Accountants
	ICAI Firm registration no: 003109S
	Hitesh Kumar P
	Partner
Place: Bengaluru	Membership number: 233734
Date: June 08, 2022	UDIN: 22233734AOMAUP8719

Annexure - A to the Independent Auditors Report:

The Annexure referred to in the Independent Auditors Report to the members of the Company on the financial statements for the year ended March 31, 2022, we report that:.

i. In respect of the Property, Plant and Equipment and Intangibles

a) As per the information and explanations provided to us, the company has not maintained proper records showing full particulars including quantitative details and situation of Property, Plant and Equipment.

The Company does not have intangible assets and hence this clause is not applicable to the company.

b) The Management has conducted the physical verification of Property Plant and Equipment during the year.

c) As per the information and explanations provided to us, there are no immovable properties held in the name of the Company, so no reporting is required under this clause.

d) The Company has not revalued any of its Property, Plant and Equipment during the year.

No proceedings have been initiated during the year or are pending against the Company as at March 31, 2022 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

ii. a. The company has conducted physical verification of inventories at reasonable intervals, except for the stock lying with customers.

b. In our opinion and based on the information and explanations provided to us, there are no working capital loans availed from any of the bank/financial institutions during the year.

iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to any company, firm, Limited Liability Partnership or other parties listed in the register maintained under section 189 of the Companies Act, 2013 ("the Act"). Accordingly, the clauses from (iii) (a) to (iii) (f) of paragraph 3 of the Order is not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, the company has not entered into any transactions covered under section 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and security. Accordingly, the provisions of clause 3 (iv) of the order are not applicable.

v. According to the information and explanations given to us, the company has not accepted deposits and does not have any unclaimed deposits within the meaning of Section 73 to 76 of the Act and Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordingly, the provisions of clause 3 (v) of the order are not applicable.

vi. The central government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the company. Accordingly, the provisions of clause 3 (vi) of the order are not applicable.

vii. According to the information and explanations given to us in respect of statutory dues:

a) In our opinion, according to the records as produced and examined by us, the company is not regular in depositing the undisputed statutory dues including income tax, sales tax, service tax, value added tax, goods and service tax, customs duty, excise duty, cess and other statutory dues, as applicable, with appropriate authorities. Arrears of outstanding statutory dues as at March 31, 2022 for a period of more than six months from the date they become payable are as follows:

Name of The Statute	Nature of Dues	Amount (Rs. in lakhs)
Employee Provident Fund Act, 1952	EPF	44.98
Employee State Insurance Act, 1948	ESI	9.94

b) According to the information and explanations given to us, there are no dues in respect of income tax, sales tax, service tax, value added tax, goods and service tax, customs duty, excise duty, cess which have not been deposited on account of dispute except for the below:

Name of the Statute	Nature of Dues	Amount Involved (Rs. in Lakhs)	Period for which the amount relates	Forum where dispute is pending
Tamil Nadu value Added Tax Act, 2006	Disallowance of Input Tax Credit	5.13*	FY 2011-12	Appellate Deputy Commissioner of Commercial Taxes
West Bengal Value Added Tax Act, 2003.	VAT Dues	7.18**	FY 2010-11	Joint commissioner of Commercial Taxes.
Central Sales Tax (West Bengal) Rules	CST Dues	1 81***	FY 2009-10	Joint commissioner of Commercial Taxes.

*Amount includes penalty of Rs. 1,70,875/-. The company has deposited Rs. 85,438/- under protest.

**Amount includes penalty of Rs. 14,044/-. The company has deposited Rs. 30,068/- under protest.

***Amount includes penalty of Rs. 1,57,985/-.

viii. According to the information and explanations given to us, there were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

ix. a. According to the information and explanations provided to us and based on examination of financial statements, the Company has not defaulted in repayment of loans or borrowings to any lender and the loans obtained are of interest free.

b. According to the information and explanations provided to us, the Company has not been declared willful defaulter by any bank or financial institution or other lender.

c. According to the information and explanations provided to us and based on examination of financial statements, money raised by way of term loans were applied for the purposes for which these are obtained.

d. According to the information and explanations provided to us and based on an overall examination of financial statements, the Company has not raised any funds on short-term basis, prima facie, Accordingly, reporting under this clause is not applicable.

e. According to the information and explanations provided to us and based on the examination of financial statements, the Company is not having any subsidiary or Joint venture or associate companies. Accordingly, reporting under this clause is not applicable.

f. According to the information and explanations provided to us and based on the examination of financial statements, the Company is not having any subsidiary or Joint venture or associate companies. Accordingly, reporting under this clause is not applicable.

x. a. The company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the Order is not applicable.

b. During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence reporting under clause 3(x)(b) of the Order is not applicable.

xi. a. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or on the Company by the officers and employees of the Company has been noticed or reported during the period.

b. No report under sub-section (12) of section 143 of the Companies Act has been filed with the Central Government, during the period covered by our audit.

c. We have not received any whistle blower complaints during the year (and up to the date of this report). Accordingly, reporting under this clause is not applicable.

xii. 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.

xiii. According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements, as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and on an overall examination of the books of account

a. In our opinion the Company does not have adequate internal audit system commensurate with the size and the nature of its business.

b. We have not been provided with the internal audit reports for the year under audit. Accordingly reporting under this clause is not applicable.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him as referred to in section 192 of companies Act, 2013. Accordingly, reporting under clause is not applicable.

xvi. In our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, reporting under this clause is not applicable.

xvii. The Company has incurred cash losses during the financial year amounting to Rs. 230.90 Lakhs covered by our audit and in the immediately preceding financial year the Company has incurred cash losses amounting to Rs. 215.12 Lakhs.

xviii. There has been no resignation of the statutory auditors of the Company during the year. Accordingly, reporting under clause is not applicable.

xix. On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements and 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 indicating 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.

There are no unspent amounts towards Corporate Social Responsibility (CSR) and there are no ongoing projects.

Accordingly, reporting under this clause is not applicable.

xx. The reporting under clause 3(xxi) is not applicable in respect of audit of financial statements of the Company. Accordingly, no comment has been included in respect of said clause under this report.

	For K.S. Rao & Co.,
	Chartered Accountants
	ICAI Firm registration no: 003109S
	Hitesh Kumar P
	Partner
Place: Bengaluru	Membership number: 233734
Date: June 08, 2022	UDIN: 22233734AOMAUP8719

Annexure - B to the Independent Auditors Report:

Independent Auditors Report on the Internal Financial Controls 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 financial statements of M/s Thakral Services (India) Limited ("the company") as of March 31, 2022 in conjunction with our audit of the financial statements of the company for the year ended and as on that date.

Responsibilities of Management and Those Charged with Governance for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to 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 issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its Assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls 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 Companies Act, 2013, to the extent 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 whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material aspects.

Our Audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial statements and their operating effectiveness. Our audit 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 depends on the auditors professional judgement, including the assessment of the risk of material misstatements of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the companys internal financial controls system over financial reporting of financial statements.

Meaning of Internal Financial Controls over Financial Reporting with reference to financial statements.

A Companys internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with the generally accepted accounting principles. A companys internal financial controls over financial reporting includes those policies and procedures that, (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of the management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of the Internal Financial Controls over Financial Reporting with reference to Financial Statements

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 evaluations of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of the changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion on adequacy and operating effectiveness of internal financial controls over financial reporting with reference to financial statements.

According to the information and explanation given to us and based on our audit, the following material weaknesses has been identified as at March 31, 2022:

a) The Company did not have appropriate internal control system for inventory with regard to accounting of receipts, issues and discrepancies noted in physical verification. These could potentially result in material misstatement in the companys trade payables, consumption and Inventory Valuation.

b) The Company did not have appropriate internal control system for collection/recovery of the trade receivables within due date, periodical balance confirmation and reconciliation, adjusting of amounts received from customers with respect to respective invoices, recording of due dates for receipt of retention money and earnest money deposits withheld by the customer which may result in non-recognition of the bad debts and incorrect estimation of provision for bad and doubtful debts/expected credit losses in respect of trade receivables, deposits, other advances, lease receivables, retention monies etc., which may affect the funds for the working capital.

c) The Company did not have appropriate internal control system for customer acceptance, credit evaluation and establishing customer credit limits for sales, which could potentially result in the company recognizing revenue without establishing reasonable certainty of ultimate collection.

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 a 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 control system over financial reporting, and such internal controls over financial reporting were operating effectively as at March 31, 2022, based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial controls over financial reporting issued by the Institute of Chartered Accountants of India, and except for the possible effect of the material weakness described above on the achievement of the objective of the control criteria, the companys internal control over financial control over financial reporting with reference to the standalone financial statements were operating effectively as of March 31, 2022.

We have considered the material weaknesses identified and reported above in determining the nature, timing and extent of audit tests applied in our audit of the financial statements of the Company as at and for the year ended March 31, 2022, and the material weaknesses have affected our opinion on the financial statements of the Company and we have issued a qualified opinion on the financial statements.

	For K.S. Rao & Co.,
	Chartered Accountants
	ICAI Firm registration no: 003109S
	Hitesh Kumar P
	Partner
Place: Bengaluru	Membership number: 233734
Date: June 08, 2022	UDIN: 22233734AOMAUP8719