Zenith Steel Pipes & Industries Ltd Directors Report.

To the Members of

Zenith Steel Pipes & Industries Limited

(formerly known as Zenith Birla (India) Limited)

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of Zenith Steel Pipes & Industries Limited (formerly known as Zenith Birla (India) Limited) ("the Company"), which comprise the Balance Sheet as at 31st March 2021, the Statement of Profit and Loss (including Other Comprehensive Income),the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (herein after 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, subject to the effect of the matters described in the Basis for Qualified opinion paragraph below the aforesaid standalone 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 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 31st March 2021,the loss and the total comprehensive loss, 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 provisions of section 73 to 76 of the companies Act, 2013 read with Rules made there under with regard to repayment of deposits and interest on due date, maintenance of liquid assets to the extent required and also not fully complied with the orders passed by the Company Law Board. (Refer note 18 to the extend current maturities of fixed deposits and interest payable there of)

2. The balance confirmations in respect of Trade Payables, Trade Receivables, Loans, Advances, Deposits etc. have not been received from the parties and hence we are unable to state whether these balances are recoverable /payable to the extent stated. (Refer note 43)

3. The Company has made provision of Rs. 12.82 lakhs in respect of certain current accounts maintained with banks, which have been frozen by regulatory authorities. In the absence of bank statements and year-end balance confirmations, we are unable to comment on the impact of shortfall in provision if any, which is made based on balance as per books of account. We are unable to comment on impact of shortfall in provisions, if any, which is made for frozen bank balances of certain banks accounts against which confirmation and statements are not available. (Refer note 56)

4. The Company has written-off Inter Corporate Deposits (ICDs) amounting to 834.44 lakhs due to uncertainty of recoverability and consequently interest income on these ICDs has not been recognized for the current year. In the absence of any external confirmations, we are unable to examine the correctness of amount of ICD written off during the year. (Refer note 47)

5. 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 standalone financial statements have been prepared on a going concern basis considering management assessment of the current situation and future prospects. (Refer note 50)

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act (SAs). Our responsibilities under those SAs are further described in the ‘Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies

Act, 2013 and the Rules there under, 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 matters forming part of the notes to the financial statements:

1. Note no. 45 & 46 regarding MOU entered into by the Company with Tribus Real Estate Pvt. Ltd (TREPL) for taking over the Companys secured bank loan, the amount to the extend paid by TREPL has been shown in the accounts as secured loan from others through bank / ARC is holding mortgaged securities which are not yet assigned in favor of the TREPL.

2. Note no 49 (i) regarding net impact of Rs. 173.51 lakhs on account of write-off of certain receivables amounting to 2174.16 lakhs and write-back of certain payables amounting to 2000.65 lakhs arising due to impact of COVID-19, being charged to the profit & loss for the current year.

3. Note no 49 (ii) regarding forfeiture of the deposit amount of 23.25 lakhs pursuant to a settlement agreement.

4. Note No. 57 regarding impact of COVID-19 on the operations of the Company.

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 standalone financial statements of the current period. These matters were addressed in the context of our audit of the 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
Evaluation of income tax provision In view of significance of matter, we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence:.
The Company is required to estimate its income tax liabilities in accordance with the tax laws applicable in India. • testing the design and operating effectiveness of the companys key controls over identifying uncertain tax position and matters involving litigations/disputes
Further, there are matters of interpretation in terms of application of tax laws and related rules to determine current tax provision and deferred taxed. • obtaining details of tax positions and tax litigations for the year and as at 31 March 2021 and holding discussions with designated management personnel.
The Company has material tax positions and litigations on a range of tax matters. • assessing and analysing select key correspondences with tax authorities and inspecting external legal opinions obtained by management for key uncertain tax positions and tax litigations.
This requires management to make significant judgements to determine the possible outcome of uncertain tax provisions and litigations and their consequent impact on related accounting and disclosures in the standalone financial statements. • evaluating underlying evidence and documentation to determine whether the information provides a basis for amounts reserved / not reserved in the books of account.
Refer Note 33 to the Standalone Financial Statements. • Involving our tax specialists and evaluating managements underlying key assumptions in estimating the tax provisions and estimate the possible outcome of tax litigations;. and in respect of tax positions and litigation, assessing the computation of provisions and consequent impact on related accounting and disclosures in the standalone financial statements
Net realisable value (NRV) of Inventory In view of the significance of the matter we applied the following audit procedures in this area, among others, to obtain sufficient audit evidence:
The total inventory of the Company amounting to Rs. 1081 lakhs (as on March 31, 2021) forms about 9.09% of the total assets of the Company. • Assessed the appropriateness of the accounting policy for inventories as per relevant Indian accounting standards.
This includes materials such as HR Coil, fuel, iron ore etc, which are susceptible to handling loss, moisture loss/gain, spillage etc. and determination of the same requires estimation based on experience and technical expertise. • Evaluated the design and implementation of key internal financial controls with respect to determination of NRV and tested the operating effectiveness of such controls on selected transactions.
Such judgment includes Companys expectations for future sale, inventory liquidation plans and future selling prices less cost to sell & modification cost. • Verified inventory ageing report by testing samples, selected using statistical sampling method.
In view of the above, assessment of NRV and its consequential impact, if any on the carrying value of inventories has been identified as a key audit matter. Refer Note 10 to the Standalone Financial Statements. • Tested the moving weighted average rate computation of inventory samples, selected using statistical sampling method.
• We examined the valuation process/methodology and checks being performed at multiple levels to ensure that the valuation is consistent with and as per the policy followed in this respect.
• The company has procedure of physical verification of inventories at regular intervals.
Allowance for credit losses
The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. Our audit procedures related to the allowance for credit losses for trade receivables included the following, among others:
The Company considered current and anticipated future economic conditions relating to industries the Company deals with and the geographical location where it operates. We tested the effectiveness of controls over the
In calculating expected credit loss, the Company has also considered credit reports and other related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID-19. We identified allowance for credit losses as a key audit matter because the Company exercises significant judgment in calculating the expected credit losses. • development of the methodology for the allowance for credit losses, including consideration of the current and estimated future economic conditions
Refer Notes 31 to the Standalone financial statements. • completeness and accuracy of information used in the estimation of probability of default and
• Computation of the allowance for credit losses.
For a sample of customers: We tested the input data such as credit reports and other credit related information used in estimating the probability of default by comparing them to external and internal sources of information.
We tested the mathematical accuracy and computation of the allowances by using the same input data used by the Company.
Evaluation of impairment risk and assessing whether triggers exist for any investment based on consideration of external and internal factors affecting the value and performance of the investment.
Investment impairment assessment
The Company has investments in subsidiaries. Our audit procedures included:
These investments are accounted for at cost less impairment. • Obtained management assessment of recoverable amount for investments where impairment risk is identified.
If an impairment exists, the recoverable amounts of the above investment are estimated in order to determine the extent of the impairment loss, if any. • Evaluated the mathematical accuracy of the cash flow projection and assessed the underlying key assumptions in managements valuation models used to determine recoverable amount considering external data, including assumptions of projected EBITDA, revenue growth rate, terminal growth rates, discount rates, and assessed the sensitivity of the assumptions on the impairment assessment and assessed the forecasts against the historical performance, including the impact of the COVID-19 pandemic.
Determination of triggers for impairment in value of these investments and recoverable amount involves significant estimates and judgements, including those related to the possible effect of the COVID-19 pandemic. Assessed the appropriateness of the related disclosures in the standalone financial statements.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys management and Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Directors Report including annexures to Directors Report, and Corporate Governance Report, But does not include the 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 on the other information obtained prior to date of this audit report, 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 Responsibilities for the Standalone Financial Statements.

The Companys management and Board of Directors are responsible for the matters stated in Section134 (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, including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. 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 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 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditors Responsibilities for the Audit of the Standalone financial statements

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

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

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143 (3) (i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to Standalone 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 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 standalone financial statements may be influenced. 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 standalone financial statements.

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

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

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

Other Matters

The figures for the previous financial year ended March 31,2020 have been audited by the then statutory auditors and their audit report furnished to us by the Management have been relied upon by us.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 (‘the Order) issued by the Central Government of India in terms of Section143 (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.

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

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

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

c. The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Actread with the Companies (Indian Accounting Standards) Rules, 2015 as amended;

e. On the basis of the written representations received from the directors as on 31st March 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2021 from being appointed as a director in terms of 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.Our report expresses an unmodified opinion on the existence of internal financial control with reference to financial statements and its operating effectiveness on the company.

g. In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h. With respect to the other matters to be included in the Auditors Report in accordance with Rule11 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 2021 on its financial position in its standalone financial statements Refer Note 33 to the standalone financial statements;

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

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

Annexure A to the Independent Auditors Report

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements section of our report of even date, to the members of Zenith Steel Pipes & Industries Limited (formerly known as Zenith Birla (India) Limited) ("the Company"), on the standalone financial statements for the year ended 31st March 2021.)

Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

1. a) The Company has not maintained records showing full particulars including quantitative details and situation of fixed assets.

b) The fixed assets of the Company are physically verified as per the program approved by the management for such verification. As per the information and explanation provided by the management, due to COVID-19 lock down, the aforesaid verification could not be undertaken by the Company as at the end of the current financial year. The management explanation that considering the past trend and having regard to the size of the Company and nature of its assets and related internal controls, there is unlikely to be any material discrepancy for the current financial year, has been relied upon. Further, the management has informed that post COVID-19 lock down, an interim physical verification shall be conducted for the next financial year (Refer note no 2.1)

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 Rs. 325.90 lakhs.

2. As per the information and explanation provided by the management, inventories have been physically verified by the management at reasonable intervals with the records. In our opinion, the Company is maintaining proper records of inventory. No material discrepancies were noticed by the management on physical verification of inventory as compared to the books of account.

3. In our opinion and according to the information and explanations given to us, the Company had granted an unsecured loans in the earlier year to other body corporates, covered in the register maintained under Section 189 of the Companies Act, 2013, the same has been written off during the current financial year.

4. In our opinion and according to the information and explanations given to us, the company has not complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of Loans, investments, guarantees, and security, where applicable.(Refer note 47)

5. 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 section 73 to 76 of the companies Act, 2013 read with Rules made thereunder with regard to repayment of deposits and interest on due date, maintenance of liquid assets to the extent required and also not fully complied with the orders passed by the Company Law Board.

6. 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.

7. 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 (Rs. in Lakhs)
1. Income Tax Deducted at Source 24.68
2. Provident Fund 29.04
3. Maharashtra Labour Welfare Fund 0.01
4. Profession Tax 0.44
5. Dividend Distribution Tax 359.08
6. Interest on Dividend Distribution Tax 398.58
7. Wealth Tax 1.88

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, and Value added tax and Income Tax as at March 31,2021, 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 Lakhs)
1985-86 High Court 3.45
Custom Act,1962 Custom Duty 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
2006-07 Joint Commissioner Appeal 1,739.30
2007-08 Joint Commissioner Appeal 2,577.63
Maharashtra Value Added Tax,2002 Value added Tax 2009-10 Deputy Commissioner for Reassessment 279.84
2011-12 Tribunal 50.98
2012-13 Joint Commissioner Appeal 330.30
2013-14 Joint Commissioner Appeal 30.67
2008-09 CIT (Appeal) 2,545.08
2009-10 CIT (Appeal) 102.01
Income Tax Act, 1961 Income Tax 2010-11 CIT (Appeal) 1,108.80
2011-12 CIT (Appeal) 189.88
2013-14 CIT (Appeal) 2.18

8. 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. The company has entered into an agreement with Tribus Real Estate Pvt. Ltd. for taking over the companys dues to the banks as reflected earlier in the company books on terms agreed to between the Company and Tribus Real Estate Pvt. Ltd.

Consequently, there are no Bank loan/outstanding in the Books of the Company as this has been transferred to Tribus Real Estate Pvt .Ltd during the previous year.

9. 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.

10. According to the information and explanations given to us and to the best of our knowledge, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

11. In our opinion and according to the information and explanations given to us, the managerial remuneration has been paid/provided by the Company during the current year is in accordance with the requisite approval mandated by the provision of section 197 read with schedule V to the Companies Act, 2013.

12. According to information and explanations given to us, the Company is not a Nidhi Company as prescribed under Section 406 of the Act. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

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

14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence reporting under paragraph 3 (xiv) of the Order is not applicable to the Company.

15. According to information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with them and hence clause 3(xv) of the Order is not applicable to the Company.

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

Annexure B to the Independent Auditors Report

(Referred to in paragraph 2(f) under ‘Report on Other Legal and Regulatory Requirements section of our report to the members of Zenith Steel Pipes & Industries Limited (formerly known as Zenith Birla (India) Limited) of even date.)

Report on the Internal Financial Controls with reference to standalone financial statements under Clause (i) of Sub- section 3 of Section 143 of the Companies Act, 2013 (‘the Act).

We have audited the internal financial controls with reference to standalone financial statements of Zenith Steel Pipes & industries Limited (formerly known as Zenith Birla (India) Limited) (‘the Company) as of 31 March 2021 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management and Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal control with reference to 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 (‘the Guidance Note) 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

Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note issued by ICAI and the Standards on Auditing prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. 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 internal financial controls with reference to financial statements 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 with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, 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 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 with reference to financial statements.

Meaning of Internal Financial Controls over Financial Statements

A companys internal financial control with reference to financial statements 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 statements includes those policies and procedures that

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) 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

(iii) 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 Statements

Because of the inherent limitations of internal, financial controls with reference to financial statements, including the possibility of collusion or improper management over ride 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 with reference to financial statements to future periods are subject to the risk that the internal financial control 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.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has maintained, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31st March, 2021 "except for the facts the Company maintains Stock records pertaining to production on a consolidated basis with other companies in the Group using the same manufacturing facilities on job work basis, based on internal financial control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For C K S P AND CO LLP
Chartered Accountants
FRN - 131228W / W100044
Debmalya Maitra
Partner
M. No. 053897
UDIN: 21053897AAAAAW3708
Place: Mumbai
Date: 29.06.2021