Zenith Birla (India) Ltd Auditors Report.

To the Members of ZENITH BIRLA (INDIA) LIMITED

Report on the Audit of the Standalone Ind AS Financial Statements

Qualified Opinion

We have audited the Standalone Ind AS financial statements of ZENITH BIRLA (INDIA) LIMITED (‘the Company), which comprise the balance sheet as at 31stMarch 2019, and the statement of profit and loss (including other comprehensive income), the statement of changes in equity and the cash flow statement for the year then ended, and notes to the Ind AS financial statements, including a summary of the significant accounting policies and other explanatory information (herein after referred to as ‘Ind AS financial statements).

In our opinion and to the best of our information and according to the explanations given to us, subject to the effect of the matters described in the Basis for Qualified opinion paragraph below the aforesaid Ind AS financial statements give the information required by the Companies Act, 2013 (‘the Act) in the manner so required and give true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31stMarch 2019, its Loss (including their comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

1. The Company has not complied with the provision of section 74 or any other relevant provision of the Act, and the Companies (Acceptance of Deposits) Rules, 2014 with regard to non repayment of deposits and interest on due date, maintenance of liquid assets to the extent required as well as not fully complying with the orders passed by the Company Low Board.

2. With reference to Note No 43 regarding the balance of Sundry Creditors, Debtors, Loans and Advances, Deposits, Currents Liabilities, inter Group, etc being not confirmed by the parties and hence our inability to state whether these balances are recoverable/payable to the extent stated.

3. Material uncertainty related to going concern

With reference to Note No 49 which indicates that the company has accumulated losses exceeding the share capital and reserves and its Net worth has been fully eroded. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the companys ability to continue as a going concern. However the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said Note.

4. Interest payable to Micro, Small and medium enterprises parties, on delayed payments to them has neither been ascertained nor provided.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditors Responsibilities for the Audit of the Ind AS financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Ind AS 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 we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to the following:

1) The outstanding balance of Rs.109.05 Crores from the Companys 100% subsidiary

In United Arab Emirates (Zenith Middle East FZE) has been considered as irrecoverable and hence provided for as doubtful

2) During the year the Company has entered into an agreement with M/S Tribus Real Estate Pvt. Ltd. for taking over the Companys bank outstanding as reflected earlier in the companys books on terms agreed to between the Company and Tribus Real Estate Pvt. Ltd irrespective of the amount settled with the bank. Consequently the outstanding of the banks in the books of the Company are transferred to Tribus Real Estate Pvt. Ltd and hence now classified as "Secured Loan from others" though the security for the loan continue to be in favor of the Banks Our opinion is not modified in respect of these matters.

Key Audit Matters

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

Description of Key Audit Matter: Going Concern Basis of Accounting

Key Audit Matters Auditors Response
Our procedures included:
?• The Company has accumulated losses exceeding its Share Capital and Reserves and its Net Worth has been fully eroded. ?• Discussion with management about their assessment of the Companys ability to continue as a going concern and managements plans to address the problems.
?• The Company has defaulted in repayment/servicing of its bank loans and interest thereon ?• Evaluating managements plans for future actions in relation to its going concern assessment, whether the outcome of these plans is likely to improve the situation and whether the managements plans are feasible in the circumstances.
?• The company has been unable to fully pay its public deposit holders ?• Evaluating the forecasted future cash flows prepared by the management.
?• Balances of Sundry Creditors, Debtors, Loans and Advances, Deposits, Current liabilities are not confirmed by the parties and hence their recoverability/playability is uncertain ?• Perusing the agreements made with third parties for assignment and settlement of the Companys dues to banks and public deposit holders.
?Labor problems at the company main factory. ?• Verifying the financing plans proposed by the management as well as the strategic understanding with suppliers/customers.
?• All the above circumstances cast a doubt on the Companys ability to continue as a going concern. ?• Concluding, on the basis of evidence obtained, on the appropriateness of managements use of the going concern basis of accounting in the preparation of the financial statements.

Other Information

The Companys management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companys annual report, but does not include the financial statements and our auditors report thereon. Our opinion on the Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Managements Responsibility for the Ind AS Financial Statements

The Companys management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs, loss and 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. 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 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Ind AS financial statements, management and 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.

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

Auditors Responsibilities for the Audit of the Ind AS financial statements

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

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

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

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

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant defficiencies 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 Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditors Report) Order, 2016 (‘the Order)issued by the Central Government in terms of Section 143 (11) 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.

A) As required by Section 143(3) of the Act we report that:

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

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

c) The balance sheet, the statement of profit and loss (including other comprehensive income), the statement of changes in equity and the cash flow statement dealt with by this report are in agreement with the books of account;

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

e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors, one of the directors is disqualified as on 31st March 2019 from being appointed as a director in terms of Section164(2) of the Act

f) 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, refer to our separate Report in ‘Annexure B.

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

i). The Company has disclosed the impact of pending litigations as at 31st March 2019 on its financial position in its Ind AS financial statements - Refer Note 36 to the Ind AS financial statements;

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

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

C) With respect to the matter to be included in the Auditors Report under Section197(16) of the Act, in our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

For, Thakur, Vaidyanath Aiyar& Co.
Chartered Accountants
Firms Registration No. 000038N
C. V. Parameswar
Place: Mumbai Partner
Date: 7th May, 2019 Membership No. 11541

Annexure A to the Independent Auditors Report on the Standalone Ind AS Financial Statements of ZENITH BIRLA (INDIA) LIMITED

(Referred to in paragraph 2 under the heading ‘Report on Other Legal & Regulatory Requirement ‘of our report of even date to the Standalone Ind AS Financial statements of the Company for the year ended March 31, 2019):

i. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets from the financial year 2016-17 onwards. We are informed that the fixed assets records pertaining to the earlier periods have been lost in transit and hence not available. The records for the year 2018-19 are in the process of being updated.

(b) The Fixed Assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which in our opinion is reasonable having regard to the size of the company and nature of its assets. However, physical verification of fixed Assets has been carried out during the year

(c) As per the information and explanations provided to us, title deeds of immovable properties are generally in the name of the Company except in case of one freehold property valued at 325.90 Lacs.

ii. The inventory (excluding stock with third parties) has been physically verified by the management during the year. In respect of inventories lying with third parties these have been confirmed by them. In our opinion the frequency of verification is reasonable. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. The Company has granted unsecured loans in the earlier years to eight Companies covered in the register maintained under Section 189 of the Companies Act, 2013: The balances with 6parties have been recovered/ adjusted during the year except for the companys two subsidiaries.

The terms and conditions of such loan are not prejudicial to the companys interest. The schedule of repayment of principal and payment of interest has not been stipulated.

As there is no stipulation about repayment of principal and payment of interest, there is no overdue amount.

iv. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and I86 of the Companies Act, 2013 in respect of Loans, investments, guarantees, and security, where applicable.

v. In our opinion and according to the information and explanations given to us, in respect of compliance by the Company with the directive issued by the Reserve Bank of India, the provisions of Sections 74 or any other relevant provisions of the Act and the rules framed thereunder, with regard to the deposits accepted from the public, we have to state that these have not been complied with in respect to non repayment of deposits and interest on due date and maintenance of liquid assets to the extent required as per Rule 13 of the Companies (Acceptance of Deposit) Rules, 2014. The Company has also not fully complied with orders passed by Company Law Board. / NCLT.

vi. We have broadly reviewed the books of accounts maintained by the Company in respect of products where, pursuant to the rules made by Central Government of India, the maintenance of cost records has been prescribed under sub section (i) 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 however not made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us in our opinion except for dues in respect of Dividend Distribution Tax, Tax Deducted at Source, Profession tax, Tax Collected at Source, Provident Fund, Labour Welfare Fund and Excise Duty the Company is generally regular in depositing the undisputed statutory dues including Custom Duty, Cess and other material statutory dues, as applicable. The following balances remained in arrears as at the last day of the financial year for a period exceeding six months from the date they become payable:

Nature of Due Amount Outstanding()
Income Tax Deducted at Source 35,56,725
Income Tax Collected at Source 52,172
Provident Fund 27,65,529
Labour Welfare Fund 768
Profession Tax 2,10,363
Excise Duty 59,28,897
Dividend Distribution Tax 3,59,08,091
Interest on Dividend Distribution Tax 3,33,94,524
Central Sales Tax 15,695
Value Added Tax 2,10,383

(b) According to the information and explanation given to us and the records of the Company examined by us, there were no disputed dues in respect of Service Tax. The particulars of Dues of Customs Duty, Excise Duty, Sales Tax, Value added tax and Income Tax as at March 31, 2018, which have not been deposited on account of disputes are as follows:

Name of the Statute Nature of Dues Period to which the matter pertains to Forum where dispute is pending Amount (Rs. In Lacs)
Custom Act,1962 Custom Duty 1985-86 High Court 3.45
1998-99 Tribunal 82.00
Central Excise Act,1959 Excise Duty 1995-96 Commissioner Appeal 129.78
Central Sales Tax Act, 1956 Central Sales Tax 1995-96 Tribunal 78.88
Maharashtra Value Added Tax, 2002 Value Added Tax 2006-07 Joint Commissioner Appeal 8,181.18
2007-08 Joint Commissioner Appeal 2,577.63
2009-10 Joint Commissioner Appeal 6,215.77
2011-12 Tribunal 50.98
2012-13 Passed Order under Rectification with Deputy Commissioner 825.89
2013-14 Joint Commissioner Appeal 30.67
Income Tax Act, 1961 Income Tax 2008-09 CIT (Appeal) 2,545.08
2009-10 CIT (Appeal) 102.01
2010-11 CIT (Appeal) 1,108.80
2011-12 CIT (Appeal) 189.88
2013-14 CIT (Appeal) 2.18

viii. According to the records of the Company examined by us and the information and explanations given to us, there has been default in payments to the banks since August 2012 During the year under audit the Company has entered into an agreement with M/S Tribus Real Estate Pvt. Ltd. for taking over the companys bank outstanding as reflected earlier in the company books on terms agreed to between the Company and Tribus Real Estate Pvt. Ltd.

ix. Based upon the audit procedure performed and the information and explanations given by the management, the Company has not raised moneys by way of initial public offer or further public offer including debt instruments and not availed term loan during the year. Accordingly, the provisions of clause 3(ix) of the order are not applicable to the Company.

x. Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us, Managerial remuneration has been Paid/ Provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule. V to the ACT.

xii. In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause3 (xii) of the order are not applicable to the Company.

xiii. In our opinion, all transactions with the related parties are in compliance with section177 and 188 of Companies Act, 2013 and the details have been disclosed in the Standalone Ind AS Financial Statements as required by the applicable accounting standards.

xiv. Based upon the audit procedures performed and the information and explanations given by the management, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly the provisions of clause 3 (xiv) of the order are not applicable to the Company.

xv. Based upon the audit procedures performed and the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the order are not applicable to the Company.

xvi. In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the order are not applicable to the Company.

For, Thakur, Vaidyanath Aiyar& Co.
Chartered Accountants
Firms Registration No. 000038N
C. V. Parameswar
Place: Mumbai Partner
Date: 7th May, 2019 Membership No. 11541

Annexure B to the Independent Auditors Report of even date on the Ind AS Financial Statements of ZENITH BIRLA (INDIA) LIMITED for the year ended 31st March 2019

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 ZENITH BIRLA (INDIA) LIMITED ("the Company") as of 31st March, 2019 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal 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 Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, 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, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment , including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of 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 authorizations 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 Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2019, based on 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, Thakur, Vaidyanath Aiyar& Co.
Chartered Accountants
Firms Registration No. 000038N
C. V. Parameswar
Place: Mumbai Partner
Date: 7th May, 2019 Membership No. 11541

Statement on impact of Audit Qualifications (for audit report with modified opinion) submitted along-with Annual Audited Financial Results (Standalone)

(Rs. in Lakhs)
S R . No. Particulars Audited Figures Rs in lacs (as reported before adjusting for qualifications) Adjusted Figures Rs in lacs (audited figures after adjusting for qualifications)
I 1. Turnover/ Total Income 15008 15008
2. Total Expenditure 26280 26280
3. Net Profit/(Loss) (11242) (11242)
4. Earnings Per Share (Rupees) (9.09) (9.09)
5. Total Assets 23460 23460
6. Total Liabilities 46591 46591
7. Net Worth (23131) (23131)
8. Any other financial item(s)( as felt appropriate by the management) - -

II Audit Qualification( each audit qualification Separately):

a. Details of Audit Qualification:

1. The Company has not complied with the provisions of the section 74 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014 with regard to non repayment of deposits and interest on due date, maintenance of liquid assets to the extent required as well as not fully complying with the orders passed by the Company Law Board.

2. With reference to Note No. 7 regarding the balance of Sundry Creditors, Debtors, Loans and Advances, Deposits, Current Liabilities , inter units etc being not confirmed by the parties/units and hence our inability to state whether these balance are recoverable/payable to the extent stated.

3. With reference to Note No. 8 which indicates that the Company has accumulated losses exceeding the Share Capital and Reserves and its net worth has been fully eroded. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Companys ability to continue as a going concern. However the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said note.

4. The outstanding of Rs.109.05 Cr. From the companys 100% subsidiary in Dubai (Zenith Middle East FZE) has been considered as irrecoverable and hence provided for as doubtful during the year.

5. Interest payable to Micro, Small and Medium Enterprise parties on delayed payments to them has neither been ascertained nor provided.

b. Type of Audit Qualification: Qualified/ Disclaimer of Opinion/ Adverse Opinion

c. Frequency of Qualification Qualification no. 1 to 3 is repetitive.

d. For Audit Qualification(s)where the impact is quantified by the auditor, Management views:

The Subsidiary Company was following up with its customer for its receivables but due to financial meltdown in Dubai and Middle East Countries in the year under consideration they have founded it difficult to recover outstanding amount recoverable from its customers as most of the Companies had got liquidated. In view of the same, the parent Company advanced to its subsidiary is doubtful of recovery and hence provision of the same has been made.

e. For Audit Qualification(s)where the impact is not quantified by the auditor:

(i) Managements estimation on the impact of audit qualification:

(ii) If management is unable to estimate the impact, reasons for the same:

For qualification on balances of sundry creditors, debtors, etc: Reconciliation of balances of sundry creditors, debtors and other parties are an ongoing basis and the figures would be ascertained only when the reconciliation is finalised. Hence at this stage, impact of the same is not ascertainable.

For qualification on non compliance of section 74(2) of the Companies Act, 2013: The company has taken action on priority to clear the dues of deposit holders who are incapacitated and to comply with the orders of existing authorities.

For the rest, the company has already started the process of settling their dues through sale proceeds of the assets sold by MPID court of the other Company who has given NOC for using the amount towards repayment of the Fixed Deposits of the Zenith Birla (India) Limited and will complete it before the end of Financial Year 2019-20 For qualification on accounting ongoing concern basis:

On account of strategic understanding with suppliers/ customers, which is continuing, the Company is on revival mode and is operating some of its units. In view of the same going concern concept holds good.

For qualification on Interest payable to Micro, Small and Medium Enterprise:

The declaration received from various suppliers was late and identification of them as MSME was fag end of the year. However the amount outstanding if any of those MSME have been cleared as on the year end but interest on the same could not be ascertained and there has been no claim loss with the Company by any of the MSME towards interest payable to them iii) Auditors Comments on (I) or (II) above No further comments.

III Signatories:

Director : (Purushottam Sonavane)
Chief Financial officer : (B. Girvanesh)
Audit Committee Chairman : (Sadhana Patil)
Statutory Auditor
( M/s Thakur, Vaidyanath Aiyar & Co. Chartered Accountants, Mumbai) : (C. V. Parameswar)
Partner
Place: Mumbai
Date: 07.05.2019