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Vivimed Labs Ltd Auditor Reports

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Vivimed Labs Ltd Share Price Auditors Report

To the Members of

VIVIMED LABS LIMITED

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying Standalone financial statements of M/s VIVIMED LABS LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including other comprehensive income), the Statement of changes in equity, Statement of cash flows for the year ended and Notes to 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, except for the effects of the matters described in the "Basis for Qualified Opinion" section of our report, 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, 2024, the loss and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

1. As disclosed in Note 28 of financial statements, The Company has not recognized interest on an accrual basis, amounting to C 453.34 Millions, which is not in compliance with the applicable Indian Accounting Standards (Ind AS). Consequently, the reported loss for the period is understated by C 453.34 Million. This deviation from Ind AS requirements impacts the accuracy of the financial statements, particularly affecting the reported loss for the period.

Further, the Company is engaged in negotiations with Bankers for settlement. As these negotiations have not yet materialized, any potential adjustments arising from a finalized settlement have not been accounted for in the financial statements. Considering the uncertainties, we are unable to ascertain/quantify the amount of impact which is required to be stated in the financial statements.

2. The balances related to Trade payables (Note no 21), Trade Receivables (Note no 8), Other Financial Assets (Note no 11), Other

Current Assets (Note no 13) and Banks including borrowings are subject to confirmation, as the Company has not provided external confirmations for these balances. In the absence of such confirmations, we are unable to verify the accuracy, completeness, and validity of these balances.

3. As disclosed in the Note 6 of standalone financial statements, investment carrying amounts are reduced from C 1,543.91 Million (31/03/2023) to C 560.58 Million (31/03/2024). However, the details of diminution, including the assumptions, methodology, and supporting evidence used by management to determine the value for these investments, was not provided to us for verification.

In the absence of sufficient documentation and evidence, we are unable to evaluate whether the diminution has been appropriately adjusted in the financial statement.

Going Concern Section

Uncertainty Relating to Going Concern

We draw attention to the certain factors that may indicate potential uncertainities regarding the Companys ability to continue as a going concern. During the _nnancial year, the Company has incurred cash losses, has defaulted on its borrowings, and is reporting negative _ncial ratios as at the reporting date. These conditions indicate a concern on company ability to continue as a going concern.

In evaluting of the going concern assumption, management has considered factors such as future business prospects, cost cutting measures and plans to restructure borrowings to improve liquidity (Refer Notes 2.7A). Based on these actions, management is optimistic that the Company will be able to meet its obligations and continue its operations in the foreseeable future. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, 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 How the matter was addressed in our audit
Contingent Liabilities and litigation Matters
Refer note 2.17 of the basis of preparation of financial statements and Our audit procedures included the following:
Note 33 to the standalone financial statements.
The Company is subject to number of significant litigations. Major risks identified by the Company in that area are related to Income Tax . The amount of litigation may be significant and estimates of the amounts of provisions or contingent liabilities are subject to significant Management judgment. Evaluating the design and testing the effectiveness of controls over the recognition and measurement of provisions for litigation and claims.
These provisions are based on judgements and accounting estimates made by management reflect in determining the likelihood and magnitude of an unfavourable outcome on the claims. Accordingly, unexpected adverse outcomes could significantly impact the Companys reported profit and balance sheet position Corroborating managements assessment by:
? Conducting enquiries with the Companys in-house legal counsel.
? Reviewing relevant correspondence, orders, and appeals related to ongoing litigation.
? Obtaining confirmations from internal legal counsel, where applicable, and/or assessing any external legal opinions obtained by management.
? Reviewing significant adjustments to legal provisions during the year to identify any indication of management bias.
? Assessing the adequacy of disclosures provided in Note 33 to the standalone financial statements to ensure they are comprehensive and accurate.

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 comprises the information included in the Management Discussion and Analysis, Boards Report including Annexure to Boards Report, Business Responsibility Report, Corporate Governance report and Shareholders Information, 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.

Responsibilities of Management and Those Charged with Governance 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, including the accounting Standards specified under section 133 of "the Act". This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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 Standalone Financial statements

Our objective is to obtain reasonable assurance about whether the financial statements free from material misstatements, 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 it is not guarantee that an audit conducted in accordance with the Standards on Auditing 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 economic decisions of users taken the basis of these standalone financial statements.

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

? Identify and assess the risks of material misstatement of the 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 financial statements, including the disclosures, and whether the 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 de_ciencies 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 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.

Emphasis of Matter paragraph

1. We draw attention to Note 7 and Note 23 of the financial statements, which describe the disposal of inventory at the Companys Bidar plant amounting to _269.18 Million. Our opinion is not modified in respect of this matter.

2. Company has received questionnaire from SEBI and is in the process of compiling/consolidating/drafting the reply. Our opinion is not modified in this matter.

Report on Other Legal and Regulatory Requirements

1. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

2. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of subsection (11) of Section 143 of the Act, we give in the "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the order, to the extent applicable.

3. As required by section 143(3) of the Act based on our audit, we report, to the extent applicable, 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 including the manner prescribed in Rule 3(1) of Companies (Accounts) Rules,2014, except that the audit trail feature was not enabled as reported under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended). 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 relevant books of account. d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 as amended except as reported in the "Basis for qualified opinion" paragraph. e) On the basis of the written representations received from the directors as on March 31, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 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". wherein we have expressed modified opinion; and. g) 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. As detailed in note 33 to standalone financial statements, the company has disclosed the impact of pending litigations on its financial position as at 31 March 2024. ii. As detailed in note 35.1, the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2024; iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. iv. The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to accounts, 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 persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries. v. The management has represented, that, to the best of its knowledge and belief, other than as disclosed in the notes to accounts, 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, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries. vi. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub- clauses (a) and (b) above contain any material misstatement. vii. The company has not declared or paid any dividend during the year. viii. The Company uses accounting software for maintaining its books of account which has a feature of recording Audit Trial (edit log) facility, but the same was not enabled in the software during the year.

"ANNEXURE A" TO THE INDEPENDENT AUDITORS REPORT

Annexure referred to in Independent Auditors Report to the Members of M/s VIVIMED LABS LIMITED on the financial statements for the year ended March 31, 2024, we report that:

i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) The Company has a program of verification to cover all the items of fixed 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 fixed assets were physically verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us, the records examined by us and based on the examination of the title deeds of immovable properties, they are held in the name of the company.

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year.

(e) According to information and explanations given to us and on the basis of our examination of the records of the Company, there are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended) and rules made there under. ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the Periodicity of such verification is reasonable and procedures and coverage as followed by the management were appropriate. Inventories are stated at the lower of cost or Net Realisable Value. The company periodically reviews the value of items in inventory and provides write-downs or write-o_s of inventory based on its assessment of market conditions. Write-downs and write-o_s are charged to cost of goods sold. During the year, the company experienced total write-o_s of C269.19 million which is inclusive of expired stock of nil/zero

realizable value. This written off inventory is mostly related to the segment Specialty Chemicals. The Written off value of Inventory of C 269.19 million is included in Changes in Inventories of finished goods work in progress and stock-in- Trade.

(b) The Company has not been sanctioned working capital limits in excess of C 5 crores in aggregate from banks and financial institutions during the year on the basis of security of current assets of the Company. Hence reporting under clause 3(ii)(b) of the Order is not applicable. iii) 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. Accordingly, paragraph 3(iii) of the Order is not applicable. iv) According to the information and explanations given to us and on the basis of examination of records of the Company, The Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of loans granted, investments made and guarantees and securities provided, as applicable. v) The Company has not accepted any deposits or amounts which are deemed to be deposits from the public. Accordingly, clause 3(v) of the Order is not applicable. vi) We have broadly verified the books of accounts and records maintained by the company in respect of products where, pursuant to the rules made by the central government of India, the maintenance of cost records has been specified under the subsection (1) of section 148 of the Companies Act 2013, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. vii) According to the information and explanations given to us, in respect of statutory dues: a) The Company is not 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. b) There were undisputed amounts payable in respect of the following statutory dues as at March 31, 2024 for a period of more than six months from the date they became payable which are given below:

S. No Nature Amount in Rs
1 TDS 6,57,32,460
2 TCS 1,22,235
3 Professional Tax 14,19,200
4 Provident Fund 4,61,81,662
5 Employee State Insurance 22,30,573
6 Entry tax 7,71,304
7 GST 25,61,862
8 Service tax 1,92,43,729
9 Income tax 97,50,360
10 IRPFHeadcount, Professionals, Non-Residents 5,87,71,545

c) According to the information and explanation given to us and based on the records of the company examined by us, there are no statutory dues other than referred in sub clause (a) which have not been deposited as at March 31, 2024 on account of any dispute except the following:

S. No Nature Assessment Year Demand Amount in D Forum where the matter is pending Section No.
1 Income Tax,1961 2014-15 21,41,96,832 CIT(A) 271(1)(c)
2 Income Tax,1961 2015-16 23,11,83,295 CIT(A) 271(1)(c)
3 Income Tax,1961 2017-18 6,68,61,780 CIT(A) 270A
4 Income Tax,1961 2018-19 1,50,000 CIT(A) 271B
5 Income Tax,1961 2020-21 16,83,413 CIT(A) 154
6 Income Tax,1961 2021-22 4,57,325 CIT(A) 154
7 Income Tax,1961 2022-23 6,06,132 CIT(A) 154
8 Income Tax,1961 2022-23 - CIT(A) 143(3)
9 The Central Sales Tax,1956 2011-12 17,78,511 Sales Tax (A) -
10 The Central Sales Tax,1956 2012-13 25,96,406 Sales Tax (A) -
11 Goods and Service Tax Act, 2017 2017-18 47,26,585 Appellate Tribunal

viii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not surrendered or disclosed any transactions, previously unrecorded as income in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year.

ix) (a) Based on our audit procedures and according to the information and explanations given to us, the company has defaulted in repayment of dues to various banks and financial institutions as at 31st March 2024 are as given below:

Nature of Name of the Bank/Institution Amount (Mn) not paid on due date* Whether principal or interest or
Borrowing both
Term Loan SBI (CTL) 406.54 Both
Term Loan IFC ECB 357.70 Both
Term Loan Vehicle Loans 0.09 Both
Term Loan IFC FCCB 629.50 Both
Working Capital SBI 2135.05 Both
Working Capital SBI -FITL 177.21 Both
Working Capital BBK 50.25 Both
Working Capital Allahabad Bank 3.16 Both

*In the above statement, amount not paid on due date does not include the interest accrued for the FY 2023-24.

The above loan accounts with SBI, IFC and Allahabad bank have become NPA.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been declared a willful defaulter by any bank or financial institution or government or government authority.

(c) According to the information and explanations given to us by the management, the Company has not obtained any term loans during the year. Accordingly, clause 3(ix)(c) of the Order is not applicable.

(d) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been utilized for long-term purposes by the Company. (e) According to the information and explanations given to us and on an overall examination of the standalone financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries or associates during the year.

(f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries or associate companies.

x) (a) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause 3(x)(a) 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 on 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 has been noticed or reported during the course of the audit.

(b) According to the information and explanations given to us, no report under sub-section (12) of Section 143 of the Act has been filed by the auditors in Form ADT-4 as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules, 2014 with the Central Government.

(c) The company has not received any whistle blower complaints during the year.

xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause 3(xii) of the Order is not applicable.

xiii) In our opinion and according to the information and explanations given to us, the transactions with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 wherever applicable, and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

xiv) (a) In our opinion, the Company has an internal audit system that does not commensurate with the size and the nature of its business.

(b) Internal audit reports provided at short notice, hence not considered.

xv) In our opinion during the year the Company has not entered into any non-cash transactions with its directors or persons connected with its directors. and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

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

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

(c) 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)(c) of the Order is not applicable.

(d) The Company is not part of any group (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016 as amended). Accordingly, the requirements of clause 3(xvi)(d) is not applicable.

xvii) The Company has incurred cash losses of C 259.72millions during the current year i.e., FY 2023-24 and immediately preceding financial year i.e., FY2022-23 of C 3082.60millions.

xviii) There has been a resignation of the statutory auditors during the year and we have taken into consideration the issues, objections or concerns raised by the outgoing auditors.

xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that the 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.

xx) In our opinion and according to the information and explanations given to us, there is no unspent amount under sub-section (5) of Section 135 of the Act pursuant to any project. Accordingly, clauses 3(xx)(a) and 3(xx)(b) of the Order are not applicable.

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

"ANNEXURE B" TO THE INDEPENDENT AUDITORS REPORT

Independent Auditors Report on the internal financial controls with reference to the standalone financial statements under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (‘the Act)

In conjunction with our audit of the standalone financial statements of M/s VIVIMED LABS LIMITED (‘the Company) as at and for the year ended 31 March 2024, we have audited the internal financial controls with reference to financial statements of the Company as at 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 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 (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 for the Audit of the Internal Financial Controls with Reference to Financial Statements

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 Standards on Auditing issued by the ICAI prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements and the Guidance Note issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls 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 Judgment, including the assessment of the risk 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 and the companys internal financial control system over financial reporting.

Meaning of Internal Financial Controls with Reference to Financial Statements

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 these 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 authorization of 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 Limitation of Internal Financial Controls with Reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override ofcontrols, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

In our opinion, as a result of matters give in the Basis for Qualified Opinion section of this report, we have not obtained sufficient and appropriate audit evidence regarding the companys internal financial controls over financial reporting. Consequently, we are unable to determine whether the company has established adequate internal financial controls over financial reporting, or whether such controls were operating effectively as of March 31, 2024. This opinion is based on the criteria established in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting, issued by the Institute of Chartered Accountants of India.

For SVRL & Co Chartered Accountants
Firms Regn.No:016182S
Sd/-
G Ramakrishna Partner
Place: Hyderabad M No: 213487
Date: 14-11-2024 UDIN: 24213487BKHRAH1614

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