undefined share price Auditors report


To

The Members Ador Fontech Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of Ador Fontech Limited (‘the Company), which comprise the Balance Sheet as at March 31, 2023, the Statement of Pro t and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and a summary of significant accounting policies and other explanatory information (hereinafter referred to as ‘the Standalone Financial Statements).

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) Rules, 2015, as amended, (‘Ind AS) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, the profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for opinion

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone 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 independence requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made there under and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.

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 Financial Statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters Auditors Response
REVENUE RECOGNITION PRINCIPAL AUDIT PROCEDURES
Revenue from sale of goods (hereinafter referred to as ‘Revenue) is recognised when control of products being sold is transferred to the customer and Our audit procedures, related to revenue recognition, included, but were not limited, to the following:
Assessed the appropriateness of the Companys revenue recognition accounting policies in line with Ind AS 115 (‘Revenue from contracts with customers) and testing thereof.
when there are no longer any unful lled obligations. The timing of revenue recognition is relevant to the reported performance of the Company.
Evaluated the design and operating effectiveness of Companys controls (including automated controls) around revenue recognition (including rebates / discounts).
Tested the effectiveness of such controls over revenue cut off at year-end by selecting samples and veri ed the same with underlying documents, which included shipping documents, loading receipt, gate register. We carried out a combination of procedures involving inquiry and observation, re-performance and inspection of evidence in respect of operation of these controls.
The Management considers revenue as a key measure for evaluation of performance.
The timing of recognition of
revenue in case of products is when control over the same is transferred to the customer, which is mainly upon delivery. The performance obligations are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on the customers terms. Inspected the samples of sales return and checked the appropriateness of sales return accounted in the books by verifying its approval from authorised person and goods inward note.
Selected a sample of continuing & new contracts and performed the following procedures:
(i) Read, analysed and identified the performance obligations in these contracts;
(ii) Compared these performance obligations with that identified and recorded by the Company;
(iii) Considered the terms of contracts to determine the transaction price including any variable consideration used to compute revenue and to test the basis of estimation of the variable consideration; and
(iv) Determined the allocation of transaction price to identify performance obligations in the contract.
Scrutinised sales ledgers to verify completeness of sales transactions.
We performed substantive testing by extracting samples of revenue transactions recorded during the year by verifying the underlying documents, which included shipping documents, lorry receipts, sale orders, approved price list, proper recording in ledger of receivables etc.
Performed analytical procedures on current year revenue based on overall revenue recognised, customer wise analysis, product wise analysis and where appropriate, conducting further enquiries and testing.
Key Audit Matters Auditors Response
DIRECT TAX BALANCES PRINCIPAL AUDIT PROCEDURES
The Company has uncertain tax positions including matters under appeal and for reconsideration, which involves significant judgement to determine the possible outcome of the decisions. Obtained details of completed tax assessments and demands for the year ended
March 31, 2023 from the Management. We involved our internal experts to challenge the Managements underlying assumptions in estimating the tax provisions and the possible outcome of the disputes. Our internal experts also considered legal precedence and other rulings in evaluating the Managements position on these uncertain tax positions. The same have also been reflected as part of contingent liabilities in the notes to the accounts.
LEASE ACCOUNTING PRINCIPAL AUDIT PROCEDURES
Accuracy of recognition, measurement, presentation and disclosures of lease transactions in compliance with Ind-AS 116 ‘Leases (New Revenue Accounting Standard). We observed that the Company has entered in to lease agreement with Karnataka Industrial Area Development Board (KIADB) for lease of 12,465 Sq. mtr. for a period of 99 years. As the lease transaction is of a long term and the underlying asset is of significant value, the same requires compliance with IND AS 116.

As per IND AS 116, the fair value of asset has to be booked at the present value of all lease related payments to be made. The Company has considered one time lumpsum lease payment made to KIADB and has decided to charge/expense off annual fees payable year on year.

ACCOUNTING FOR IMPAIRMENT LOSS OF THE WHOLLY OWNED SUBSIDIARY
We observed that the impact of depreciation and related lease interest charges on the maintenance fee is not material. Therefore, we have not modified our opinion.
PRINCIPAL AUDIT PROCEDURES

Tested the design and operating effectiveness of relevant key controls around the Companys assessment of impairment of investments in the WOS.

The Company has investments in its wholly owned subsidiary (WOS),

Tested reasonability of the projections used by the WOS related to its sales growth, operating costs, cash flow forecasts etc.

which is at the nascent stage and still carrying out significant product and developmental activities. Currently the said WOS has minimal revenues and the Company in its consolidated financial statements continues to record losses, incurred by the said WOS. Given this context, the investment had to be tested for impairment. The same was determined using discounted free cash flow method, requiring
Involved an Independent Valuer to aid in evaluating besides usage of possible valuation assumptions and estimates including discount and growth rates.
Tested whether the Management analysis about the sensitivity of the outcome w.r.t. impairment assessment with possible changes in key assumptions reflect the risks inherent in the valuation.

Based on the aforesaid testing, evaluation and explanations given by the Management, we concluded that the investments in WOS need not be impaired as on March 31, 2023.

signi cant judgement and estimates. The related impairment testing was significant to our Audit.

Information other than the Standalone Financial Statements and Auditors Report thereon

The Companys Board of Directors is responsible for the preparation of the other information. The other information consists of details included in the Boards Report including annexures to the Boards report comprising Management Discussion and Analysis Report, Corporate Governance, Shareholders information etc. but does not include the Standalone Financial Statements and our Auditors report thereon.

Our opinion on the Standalone 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 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 Financial Statements or our knowledge obtained during the course of our 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.

Managements Responsibility 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 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 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 & prudent; design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring 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, the 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 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:

AUDITORS REPORT (STANDALONE)

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 controls.

Obtain an understanding of internal financial controls 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.

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

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 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.

Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be in uenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit ndings, 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

As required by Section 143(3) of the Act, based on our audit we report that:

(i) 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.

(ii) 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.

(iii) The Balance Sheet, the Statement of Pro t 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 relevant books of account.

(iv) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind-AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(v) On the basis of 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.

(vi) 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 A. Our report expresses an unmodi ed opinion on the adequacy and operating effectiveness of the Companys internal financial controls over nancials.

(vii) 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 Director during the year is in accordance with the provisions of Section 197 of the Act.

(viii) 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:

The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements.

The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

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

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 share premium or any other sources or kind of funds) by the Company to or in any other person or entities, including foreign entities (‘Intermediaries) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall: (i) Directly or indirectly lend or invest in other persons or entities, identified in any manner whatsoever (‘ultimate bene ciaries) by or on behalf of the Company or (ii) Provide any guarantee, security or the like to or on behalf of the ultimate bene ciaries.

AUDITORS REPORT (STANDALONE)

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 (‘funding parties), with the understanding, whether recorded in writing or otherwise, that the Company shall: (i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (‘ultimate bene ciaries) by or on behalf of the funding party or (ii) Provide any guarantee, security or the like from or on behalf of the ultimate bene ciaries and

Based on such audit procedures as 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 (d)(i) and (d)(ii) of the Companies (Audit and Auditors) Rules (as amended) contain any material mis-statement.

The dividend declared and paid during the year by the Company is in compliance with Section 123 of the Act.

As required by the Companies (Auditors Report) Order, 2020 (‘the Order) issued by the Central Government in terms of Section 143(11) of the Act, we give in the ‘Annexure B a statement on the matters specified in paragraphs 3 and 4 of the order.

ANNEXURE ‘A TO THE INDEPENDENT AUDITORS REPORT

(Referred to in the Report on Other Legal and Regulatory Requirements of our report to the Members of Ador Fontech Limited of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act)

We have audited the internal financial controls over financial reporting of Ador Fontech Limited (‘the Company) as of March 31, 2023 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

Key Audit Matters (KAM)

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Internal Control Systems of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole and in forming our opinion thereon.

Key Audit Matters Auditors Response
Implementation of Enterprise Resource Planning (ERP) The Finance and Accounts module of the Ramco System was made fully operational for the first time during FY 21-22. This being the second full financial year, the eAcacy of the system was proven to be fully established.
The Companys detective and corrective control systems We tested the design and operating effectiveness of detective & corrective controls and found that they are effective enough to detect & also correct errors and are fairly sufficient & appropriate for the nature and complexities of the business of the Company.
Valuation of retiral benefits We have relied upon the professional / expert opinion of the Actuarial valuation.

Managements Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaining internal financial controls based on internal controls 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. These responsibilities include design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring orderly and eAcient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds, errors, accuracy and completeness of the accounting records, timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company 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) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal

financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements; plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established, maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of internal financial control 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; 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 risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls Over Financial Reporting

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

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 risk that the internal financial control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with 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 control system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2023, 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.

For PRAVEEN & MADAN
Chartered Accountants
PRAVEEN KUMAR N
Partner (Membership No: 225884)
Firm Registration no.:011350S
Bengaluru UDIN: 23225884BGVJXY7383
May 29, 2023 Peer Review Certificate No.: 014926

ANNEXURE ‘B TO THE INDEPENDENT AUDITOS REPORT

(Referred to in the Report on Other Legal and Regulatory Requirements of our report to the Members of Ador Fontech Limited of even date)

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit and to the best of our knowledge and belief, we report that:

The Company is maintaining proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

The Company is maintaining proper records showing full particulars of intangible assets.

The Company has a program of veri cation to cover all the items of xed assets in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain xed assets were physically veri ed by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such veri cation.

According to the information and explanations given to us, the records examined by us and based on the examination of conveyance deeds/registered sale deeds provided to us, we report that the title deeds, comprising all immovable properties of land and buildings which are freehold, are held in the name of the Company as at the Balance Sheet date. Further, in respect of immovable properties of land and building that have been taken on lease and disclosed as xed assets in the Standalone Financial Statements, the lease agreements are in the name of the Company.

The Company has not revalued its Property, Plant and Equipment or Intangible assets during the year. Therefore, the reporting as per paragraph 3(i) (d) of the order is not required.

No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder. Accordingly, reporting under clause 3(i)(e) of the Order is not applicable to the Company.

We are informed that inventories have been physically veri ed by the Management during the year and also at the end of the year. In our opinion, the frequency of veri cation is reasonable. In our opinion and according to the explanations given to us, the procedures of physical veri cation of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventories. The discrepancies noticed on veri cation between physical stocks and book records were not more than 10% in each class and have been properly dealt with in the books of accounts.

The Company has working capital limit in excess of rupees ve crore sanctioned by the HDFC Bank based on the security of current assets and specified xed deposits. As per the sanction, limits can be swapped between funded and non-funded requirements. As on March 31, 2023 the Company has availed only bank guarantees and continues to be debt free, therefore reporting under para 3(ii)(b) of the order is not applicable.

The Company has granted unsecured loans to two bodies corporate by way of inter-corporate-deposits, covered in the Register maintained under Section 189 of the Companies Act, 2013. Details of which are as follows:

AUDITORS REPORT (STANDALONE)

Rupees In Lakhs

Organisation Type Amount as at March 31, 2022 Paid during the year Repaid during the year Amount as on March 31, 2023
3D Future Technologies Pvt. Ltd. Wholly owned subsidiary 1,239 80 (154) 1,165
Ador Powertron Ltd. Associate - 700 (700) -

Notes: (i) Ador Powertron has repaid inter-corporate-deposit in full along with interest as at March 31, 2023. (ii) in respect of 3D Future Technologies, extension of inter-corporate-deposit was facilitated and the percentage of fresh and roll over was in the ratio of 7:93.

According to the information and explanations given to us.

(i) The terms and conditions of the grant of such loans are in our opinion, prima facie, not prejudicial to the interest of the Company.

(ii) There are no overdue amounts remaining outstanding as at the end of the year.

(iii) In respect of the wholly owned subsidiary, inter-corporate-deposit have been provided for a general term of one year which have been extended/renewed. Further, the terms and conditions specify for repayment on demand.

In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits or there is no amount which has been considered as deemed deposit within the meaning of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, reporting under clause 3(v) of the Order is not applicable to the Company.

The Central Government has specified maintenance of cost records under sub-section (1) of section 148 of the Act only in respect of specified products of the Company. For such products, we have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under the aforesaid section, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

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

(i) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Goods and Service Tax, Customs Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(ii) There were no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Goods and Service Tax, Customs Duty, Cess and other material statutory dues in arrears as at March 31, 2023 for a period of more than six months from the date they became payable.

(iii) Details of dues of Income Tax, Goods and Service Tax, Sales Tax, Service Tax, Excise Duty and Value Added Tax whichhave not been deposited as at March 31, 2023 on account of dispute are given below:

Rupees In Lakhs

Nature of the statute Nature of dues Forum where dispute is pending Period to which the amount relates Amount
Income Tax Act, 1961 Corporate Income Tax Commissioner (Appeals) AY 2013-14 71
Assistant Commissioner AY 2016-17 10
Commissioner (Appeals) AY 2018-19 161
Commissioner (Appeals) AY 2021-22 260
TOTAL 502

Note: The Income Tax Department had raised claim of rupees forty crores for the Assessment year 2021-22. The Company had made representation that there is mistake apparent on record, being purchase and stock not considered in the computation. Simultaneously, there was scrutiny assessment in progress which upheld the return of income led by the Company and also con srmed nil demand. In the intermittent, the Company had led an Appeal and the Commissioner/National Faceless Assessment Centre has con rmed that order passed after scrutiny assessment will subsist as per law. The company has approached the Department for negating/deleting the demand being reflected in the Income Tax portal.

According to the information and explanations given to us, no transactions were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961) which have not been recorded in the books of accounts.

According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company did not have any loans or borrowings from any lender during the year. Accordingly, clause 3(ix)(a) of the Order is not applicable.

According to the information and explanations given to us including representation received from the Management of the Company, and on the basis of our audit procedures, we report that the Company has not been declared a wilful defaulter by any bank or financial institution or other lender.

In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of term loans (both for long and short term) during the year and there has been no utilisation during the current year of the term loans obtained by the Company during any previous years. Accordingly, reporting under Clause 3(ix)(c) of the Order is not applicable to the Company.

In our opinion and according to the information and explanations given to us, the Company has not raised any funds on short term basis during the year or in any previous years. Accordingly, reporting under clause 3(ix) (d) of the Order is not applicable to the Company.

According to the information and explanations given to us and on an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiary. Accordingly, reporting under clause 3(ix)(e) of the Order is not applicable to the Company.

According to the information and explanations given to us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiary. Accordingly, reporting under clause 3(ix)(f) of the Order is not applicable to the Company.

(i) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments), during the year. Accordingly, reporting under clause 3(x)(a) of the Order is not applicable to the Company.

(ii) During the year, the Company had subscribed to Rights issue of its Subsidiary and was allotted 15,30,528 equity shares of Rs.10/- each at an issue price of Rs.49 per equity share.

According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or (fully, partially or optionally) convertible debentures during the year. Accordingly, reporting under clause 3(x)(b) of the Order is not applicable to the Company.

To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or on the Company has been noticed or reported during the period covered by our audit.

No report under Section 143(12) of the Act has been led with the Central Government for the period covered by our audit.

According to the information and explanations given to us including the representation made to us by the Management of the Company, there are no whistle-blower-complaints received by the Company during the year.

The Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it. Accordingly, reporting under clause 3(xii) of the Order is not applicable to the Company.

In our opinion and according to the information and explanations given to us, all transactions entered into by the Company with related parties are in compliance with Sections 177 and 188 of the Act, where applicable. Further, details of such related party transactions have been disclosed in the Standalone Financial Statements, as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified in Companies (Indian Accounting Standards) Rules 2015 and prescribed under Section 133 of the Act.

In our opinion and according to the information and explanations given to us, the Company has an internal audit system as required under Section 138 of the Act which is commensurate with the size and nature of its business.

We have considered the reports issued by the Internal Auditors of the Company till date for the period under audit.

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

The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, reporting under clause 3(xvi) of the Order is not applicable to the Company.

The Company is not a core investment company (CIC) as defined in the Regulations made by the Reserve Bank of India. Accordingly, clause 3(xvi) of the Order is not applicable.

The Company has not incurred any cash loss in the current as well as in the immediately preceding financial year. However, the wholly owned subsidiary of the Company had incurred cash losses in the financial year 2022-23 and in the preceding financial year.

There has been no resignation of the Statutory Auditors during the year. Accordingly, reporting under clause 3(xviii) of the Order is not applicable to the Company.

According to the information and explanations given to us and 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 Standalone Financial Statements, our knowledge of the plans of the Board of Directors and Management, 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.

According to the information and explanations given to us, the Company does not have any unspent amount in respect of any other than ongoing project as at the expiry of the financial year. Accordingly, reporting under clause 3(xx)(a) and 3(xx)(b) of the Order is not applicable to the Company.

There has been no adverse remarks provided by Statutory Auditor of the wholly owned subsidiary in respect of the Company Auditors Report Order (CARO), 2020.

For PRAVEEN & MADAN
Chartered Accountants
PRAVEEN KUMAR N
Partner (Membership No: 225884)
Firm Registration no.:011350S
Bengaluru UDIN: 23225884BGVJXY7383
May 29, 2023 Peer Review Certificate No.: 014926