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Bhushan Steel Ltd.

BSE: 500055 Sector: Metals & Mining
NSE: BHUSANSTL ISIN Code: INE824B01021
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VOLUME 141100
52-Week high 102.80
52-Week low 39.10
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Mkt Cap.(Rs cr) 1,494
Buy Price 66.10
Buy Qty 1174.00
Sell Price 0.00
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OPEN 67.00
CLOSE 66.25
VOLUME 141100
52-Week high 102.80
52-Week low 39.10
P/E
Mkt Cap.(Rs cr) 1,494
Buy Price 66.10
Buy Qty 1174.00
Sell Price 0.00
Sell Qty 0.00

Bhushan Steel Ltd. (BHUSANSTL) - Auditors Report

Company auditors report

To

The Members of Bhushan Steel Ltd.

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of BhushanSteel Ltd. ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 and the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Cash Flows and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation (herein after referred to as "Standalone Ind AS Financial Statements).

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of the stateof affairs (financial position) profit or loss (including other comprehensive income)cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)prescribed under section 133 of the Act read with rules issued thereunder. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there-under.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements.

The procedures selected depend on the auditor’s judgment including the assessmentof the risks of material misstatement of the standalone Ind AS financial statementswhether due to fraud or error. In making those risk assessments the auditor considersinternal financial control relevant to the Company’s preparation of the standaloneInd AS financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of theaccounting estimates made by the Company’s Board of Directors as well as evaluatingthe overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Basis of Qualified Opinion

The Supreme Court of India vide its order dated 24.09.2014 cancelled number of coalblocks allocated to various entities which includes one coal block allocated to thecompany which was under development. Subsequently the Government of India has issued theCoal Mines (Special Provision) Act 2015 which inter-alia deal with the payment ofcompensation to the effected parties in regard to investment in the coal blocks.

No effect has been taken on the value of investment made by the company in thede-allocated coal blocks amounting to 56289.96Rs. Lacs (including expenditure incurred of13546.46 lacs and advance given of` 42743.50Rs. Lacs). In the opinion of the managementthe company will receive back the payments / expenditure paid / made including borrowingcost and other incidental expenditure relating to de-allocated coal block. The companyhas filed its claim for compensation with the Government of India Ministry of Coal.Subsequently the company has filed a petition before the Hon’ble Delhi High Courtfor early recovery of amount in which notice has been issued to the Union of India andthe matter is still pending for disposal. We are unable to comment on the impact on thevalue of investment made by the company in the de-allocated coal blocks and theirconsequent impact on the losses for the financial year ended March 31 2017.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the matter described in the Basis of QualifiedOpinion paragraphabove the aforesaid standalone Ind AS financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the state ofaffairs of the Company as at 31st March 2017 and its loss (including other comprehensiveincome) its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

1. W e draw attention on Note No. 50 to the Ind AS financial statements whichindicates that the company has negative net worth as at 31.03.2017. Further it hasincurred net cash losses of `243278 lacs in the current financial year and `246462lacs in the immediate preceding financial year. The current liabilities of the companyexceeded its current assets as at the balance sheet date by `2174381 lacs. Theseconditions may cast doubt about the Company’s ability to continue as a going concern.However the financial statements of the company are prepared on a going concern basis forthe reasons stated in the said Note.

2. I ndian Accounting Standard (Ind AS) - 101 requires to provide details of materialadjustments relating to Balance Sheet and Statement of Profit and Loss in compliance toall applicable Ind AS in the Equity Reconciliation Statement as on 01.04.2015 and31.03.2016 with respect of reported and restated figures; the company has disclosed neteffect of these adjustments due to transition to Ind AS in the Equity ReconciliationStatement. (Refer Note No. 45 to the Ind AS financial statements) Our opinion is notmodified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order.

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

(a) W e have sought and except for the possible effect of the matter described in theBasis of Qualified Opinion paragraph above obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) Ex cept for the possible effect of the matter described Basis of Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby the Company so far as appears from our examination of those books;

(c) The Balance Sheet Statement of Profit and Loss Comprehensive Income the statementof cash flows statement of changes in equity dealt with by this Report are in agreementwith the books of account;

(d) Ex cept for the possible effect of the matter described Basis of Qualifiedaforesaid standalone Ind AS financial statements comply with the Indian AccountingStandards specified under section 133 of the Act read with Rules issued thereunder;

(e) The matters described in the ‘Basis of Qualified ‘Emphasis ofMatter’ paragraphs above in our opinion may have an adverse effect on thefunctioning of the Company; (f) On the basis of written representations received directorsas on March 31 2017 taken on record by the Board of

Directors none of the directors is disqualifiedas on March 31 2017 from beingappointed as a director in terms of sub-section (2) of Section 164 of the Act; whereas infact the company has defaulted in redeeming certain debentures on due date and in paymentof interest thereon. However according to information and explanations given to us LIChas shown its willingness to restructure it as per S4A scheme of RBI vide its letter dated12.04.2017. Meanwhile as per directions of RBI dated 13.06.2017 the lenders areconsidering to refer the matter of restructuring of borrowings to National Company LawTribunal (NCLT) for final resolution. (g) The qualification relating to the maintenance ofother matters connected therewith are as stated in the basis of Qualified Opinionparagraph above;

(h) Wi th respect to the adequacy of the internal financial over financial reporting ofthe Company and the operating effectiveness of such controls refer to our separate Reportin "Annexure B"; and

(i) wi th respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and the Auditors) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us:i. the Company has disclosed the impact of pending litigations on its financial positionin its standalone Ind AS financial Statements – Refer Note - 42 to the standalone IndAS other financial statements; and the ii. the company has made provisions as requiredunder applicable law or accounting standards for material foreseeable losses if any onlong-term contracts including the derivative contracts – Refer Note - 43 to thestandalone Ind Opinion paragraph above in our opinion the AS financial statements; iii.ther e has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company; and and iv. the Company hasprovided requisite disclosures in its standalone Ind AS financial statements as regards toholdings as well as dealings in Specified Bank Notes as the defined in the NotificationS.O. 3407(E) dt. 2016 of the Ministry of Finance during the period from 8th November2016 to 30th December 2016. Based on audit procedure performed and the representationprovided to us by the management we report that the disclosure are in accordance with thebooks of account maintained by the Company as produced to us by the management. - ReferNote 11 to the standalone Ind AS financial statements.

For MEHRA GOEL & CO. For MEHROTRA & MEHROTRA
Chartered Accountants Chartered Accountants
(FRN: 000517N) and (FRN: 000226C)
sd/- sd/-
R.K. Mehra M.P. Mehrotra
Partner Partner
controls M. No: 006102 M. No : 005699
Place: New Delhi
Dated: 5th July 2017

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT

The Annexure ‘A’ referred to in our Independent Auditors’ Report to themembers of the Company on the standalone Ind AS financial statements of Bhushan Steel Ltd.for the year ended 31st March 2017 we report that:

(i) I n respect of its property plant and equipment:

(a) The Company is maintaining proper records particulars including quantitativedetails and situation of property plant and equipment on the basis of availableinformation;

(b) The property plant and equipment covering were physically verified during the yearby the management at such intervals which in our opinion provides for the physicalverification of all the property plant and equipment at reasonable intervals havingregard to the size of the Company and nature of its business. According to the informationand explanations given to us no material discrepancies were noticed on such verification;

(c) Ac cording to the information and explanations given to on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of company except in respect of guest house building at Mumbai havingGross block of `74.00 lacs and Net block of `65.64 lacs as at 31st March 2017.

(ii) Ac cording to the information and explanations given to inventory of finishedgoods semi-finished goods and raw material at works were during the year physicallyverified

In respect of stores spare and stock at yards in the custody of the third party andstock in transit were verifiedwith the confirmation or statement of account orcorrespondence of the third parties or certification by management or reports ofinspection and different audits carried out by the banks. In our opinion and according tothe information and explanations given to us the interval of such physical verificationis reasonable having regard to the size of the Company and nature of its business andaccording to the information and explanations given to us no material discrepancies werenoticed on such verification.

(iii) Ac cording to the information and explanations given to

Company has not granted secured or unsecured loan to a company firm LLP or otherentity covered in the register maintained under Section 189 of the Companies Act 2013.Accordingly the provisions of sub-paragraph (a) and (b) of the Order are not applicable.

(iv) I n our opinion and according to the information and explanations given to us theCompany has generally complied with the provisions of section 185 and 186 of CompaniesAct 2013 with respect to the fullloans investments guarantees and security.

(v) Ac cording to the information and explanations given to us the Company has notaccepted any deposits during the year. Hence the value directives issued by the ReserveBank of India and the provisions of section 73 to 76 or any other relevant provisions ofthe Companies Act 2013 and the rules framed there-under are not applicable to theCompany.

(vi) I n our opinion and according to the information and explanations given to usspecified accounts and records as Central Government in terms of sub-section (1) ofsection 148 of the Companies Act 2013 have been prima facie made and maintained by andthe company. However we have not nor we are required carried out any detailedexamination of such accounts and records. (vii) (a) According to the information andexplanations given to us and on the basis of our examination of the records the Companyhas generally been regular in depositing undisputed statutory dues including providentfund employees’ state insurance income- the tax sales-tax service tax duty ofcustoms value added tax cess and any other material statutory dues with some delays bythe management. to the appropriate authorities to the extent these are applicable exceptdeposit of duty of excise where payment is continuously irregular.

According to the information and explanations given to us no undisputed dues were inarrears as at 31st March 2017 for a period of more than six months from the date theybecome payable except dues of excise including interest of `9861.41 lacs and electricityduty of `399.21 lacs.

(b) According to the information and explanations given to us the following dues ofsales tax duty of excise service tax value the added tax and other statutory dues havenot been deposited by the Company on account of disputes:

Name of the Statute Nature of Dues Amount (Rs. In Lacs) Period to which the amount pertains Forum where the dispute is pending
The Central Excise Act 1944 Excise Duty 55.80 April2010 -March2013 Commissioner (Appeals)
133.83 April2011-March2015 Commissioner of Central Excise Ghaziabad
15.20 April2013-June2014 Commissioner (Appeals) Noida
1.48 May1998-October1998 Supreme Court
20506.35 Aug’05 to Jul’ 09 Aug ’09 to Mar’10 Apr’09 to Jan’10 & Apr’10 to Jan’11 CESTAT Kolkata
24.79 Feb’10 to Nov’11 Apr’10 to Jan’11 & Apr’08 to Mar’11 Commissioner (Appeals) Bhubaneswar
531.87 July’13-March’14 Commissioner of Central Excise Raigad
0.86 June2001-July2001 Allahabad High Court
2491.95 2006-2007 2009-2010 & CESTAT New Delhi
April2006-Mar2009
Custom Act 1962 Custom Duty 371.80 30th Jun’2009 2009-10 Commissioner of Custom Vizag
Finance Act 1994 [Service Tax Provisions] Service Tax 5532.51 Dec’05 to Aug’08 Oct’09 to Sep’10 CESTAT Kolkata
4.41 2006-07 to 2007-08 & Mar’11 Commissioner (Appeal) Bhubaneswar
52.33 Dec’04-Nov’07 Commissioner of Central Excise Raigad
Uttar Pradesh Tax on entry of goods into Local Areas Act2007 Entry Tax 25.30 2000-01 High Court of Allahabad
31451.22 2007-20082008-20092012-2013 & 2013-2014 Additional Commissioner (Appeal) Ghaziabad
Odisha Entry Tax Act 1999 Entry Tax 44295.33 Dec’07 to Mar’12 Supreme Court
3983.71 Apr’05 to Jan’08 & Apr’10 to Mar’12 Addl. Commissioner of Sales Tax (Appeal) Cuttack
Sales Tax Acts of various States Local Sales Tax 47136.88 Apr’05 to Mar’12 Orissa High Court at Cuttack
49.92 July'06 to Nov'10 Additional Commissioner of Sales Tax (Appeals) Cuttack
2875.07 2011-20122012-20132013-2014 Apr’14-October2014 Allahabad High Court
8484.69 January2008-March20082008-2009 2010-2011 & April2016- June 20162015-2016 Additional Commissioner (Appeal) Ghaziabad
15390.19 2012-20132013-2014 Assessing Authority
45.97 2006-2007 Additional Commissioner (Appeal) Ghaziabad
82.69 1991-1992 &2007-2008 Tradetax Tribunal Ghaziabad
Central Sales Tax Act1956 CST 327.06 2006-2007 Additional Commissioner (Appeal) Ghaziabad
26844.21 2012-2013 & 2013-2014 Assessing Authority
182.42 2007-2008 Tradetax Tribunal Ghaziabad
6253.66 January2008-March2008 2008- 20092010-2011 Additional Commissioner (Appeal) Ghaziabad
10927.13 June2014-June2015 Commercial Tax Tribunal
2083.55 2002-03 2003-042004-2005 & April2006 to October2006 High Court of Allahabad
Orissa Minor Minerals Concession Rules 2004 Royalty 5434.74 2006-2014 Odisha High Court
Income Tax Act1961 Income Tax 11694.20 2008-20092009-20102012- 20132013-20142014-2015 Commissioner of Income Tax (Appeals)

(viii) B ased on our audit procedure and according to the information and explanationsgiven to us we are of the opinion that the Company has defaulted in repayment of loans /borrowings to the financial institutions banks Government or debenture holders as perdetails given here-under:

Particulars Amount of Default as on Balance Sheet Date (Rs. In Lacs) Maximum Period of Default (in Days)
Principal Interest Principal Interest
(i) Name of the Lenders : In case of :
A. Banks (INR loans)
1 Allahabad Bank - 13555.89 - 426
2 Andhra Bank 1087.50 5776.54 366 427
3 Axis Bank 50.00 16007.46 275 366
4 Bank of Baroda 300.00 15074.04 275 488
5 Bank of India 31143.00 22623.52 428 460
6 The Bank of Tokyo-Mitsubishi UFJ Ltd. 365.00 1040.01 91 367
7 Bank of Maharashtra - 17878.40 - 488
8 Canara Bank 1550.00 16706.22 366 458
9 Central bank of India - 17287.83 - 518
10 Corporation bank - 10505.93 - 366
11 Dena Bank 2084.86 7067.85 275 426
12 ICICI Bank 374.72 5862.08 351 276
13 Indian Bank - 9247.58 - 457
14 Indian Overseas Bank - 6569.76 - 518
15 Jammu & Kashmir Bank - 10069.69 - 518
16 Karur Vyasa Bank Limited - 1332.46 - 244
17 Lakshmi Vilas Bank - 108.03 - 60
18 Oriental Bank of Commerce 225.00 14210.14 275 457
19 Punjab & Sind Bank 1785.71 10303.99 365 518
20 Punjab National Bank - 15548.53 - 518
21 Saraswat Co-operative Bank - 2607.20 - 366
22 State Bank of Bikaner and Jaipur 237.50 1083.38 91 91
23 State Bank of India 6750.00 22873.05 366 426
24 State Bank of Hyderabad 1325.00 8713.12 366 426
25 State Bank of Mysore 4836.00 5007.80 511 305
26 State Bank of Patiala 1700.00 12496.46 366 397
27 State Bank of Travancore 1087.50 6913.34 366 397
28 South Indian Bank - 467.09 - 91
29 Syndicate Bank 400.00 18626.93 275 488
30 UCO Bank - 13080.99 - 426
31 Union Bank of India 200.00 11809.25 275 518
32 United Bank of India - 10190.42 - 610
33 Vijaya Bank - 5895.18 - 518
Total (A) 55501.79 336540.16
B. Foreign Currency Loans
1 AXIS Bank - 1459.95 - 411
2 Crdit Agricole Corporate and Investment Bank 5511.03 0.65 1027 75
3 Deutsche Zentral Genossenschafts Bank 26872.23 - 1128 -
4 Deutsche Bank 9963.04 329.99 549 183
5 DBS Bank - 1099.06 - 369
6 HSH Nordbank 42063.69 462.67 1158 1158
7 ICICI Bank 8034.60 5245.92 241 367
8 ING Bank 270.02 0.34 1006 -
9 State Bank of India (Consortium) 24557.62 19726.72 489 489
Total (B) 117272.23 28325.30
C. Financial Institutions
1 EXIM Bank - 4602.84 - 367
2 Industrial Development Bank of India 3925.00 21881.34 456 518
3 Industrial Financial Corporation of India 438.50 3515.97 238 214
4 DBS Bank 3333.33 2102.77 366 426
5 L&T Finance Ltd - 185.70 - 60
6 SICOM Ltd. - 0.62 - 1
7 STCI Finance Ltd - 194.19 - 32
Total (C) 7696.83 32483.43
(ii) Secured Debentures 29078.01 37848.27 231 840
Total (D) 29078.01 37848.27
Grand Total (A+B+C+D) 209548.86 435197.16

The mpany is enjoying working capital facility (funded and non- Co funded) and there isoutstanding balance of `1302454.78 lacs as at 31st March 2017 against which interestof `128246.42 lacs is overdue.

(ix) Ac cording to the information and explanations given to Company has raised moneyby way of term loans during the year and to the best of our knowledge and according to theinformation and explanations given to us the amount received by means of these loans havebeen pooled and utilized through Trust Retention Account (TRA) maintained by State Bank ofIndia the lead banker on behalf of all other consortium members.

(x) T o the best of our knowledge and according to the information explanations givento us no material fraud by the company or on the Company by its officers or employees hasbeen noticed or reported during the course of our audit.

(xi) Ac cording to our information and explanations given to us and on our examinationof the records of the Company managerial remuneration has been paid / provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act except the payment of leave encashment provident fund andtaxable car perquisites for which clarification sought by the management from CentralGovernment is awaited. (Refer Note - 54 to the standalone Ind AS financial statements)(xii) I n our opinion and according to the information and given to us the Company is nota Nidhi company. Accordingly para 3 (xii) of the Order is not applicable to the Company.

(xiii) Ac cording to the information and explanations given to us and on ourexamination of the records of the company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone Ind AS financial statement as requiredby the applicable accounting standards.

(xiv) Ac the cording to the information and explanations given to us and based on ourexamination of the records of the company the company has made private placement ofredeemable cumulative preference shares during the year under review and in our opinionthe requirement of section 42 of the Act have been complied with and the amount raisedhave been used for the purposes for which the funds were raised.

(xv) Ac cording to the information and explanations given to us and based and on ourexamination of the records of the company the company has not entered into non-cashtransactions with directors or persons connected with him.

(xvi) As per our information the company is not required to be registered based underSection 45-1A of the Reserve Bank of India Act 1934.

For MEHRA GOEL & CO. For MEHROTRA & MEHROTRA
Chartered Accountants Chartered Accountants
(FRN: 000517N) (FRN: 000226C)
sd/- sd/-
R.K. Mehra M.P. Mehrotra
Partner Partner
M. No: 006102 M. No : 005699
based Place: New Delhi
Dated: 5th July 2017

Annexure - B to the Auditors’ Report

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of BhushanSteel Limited ("the Company") as of 31st March 2017 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on theCompany’s internal finan report-cial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial Controls and both issued by theInstitute of Chartered Accountants of In-dia. Those Standards and the Guidance Noterequire that we comply with controls ethical requirements and plan and perform the auditto obtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial -porting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financialcontrols over financial a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe standalone Ind AS financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company’s internal financial controls system over financialreporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of fi -nancialreporting and the preparation of financial purposes in accordance with generally acceptedaccounting principles. A company’s internal financial control policies and proceduresthat (1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflectthe transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company’s assets that could have a material effect on thefinancial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over finan -cialreporting 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 over financialreporting to future periods are subject totherisk that the internal financial overfinancial -ing may become inadequate because of changes in conditions or that the degreeof compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanation givento us the Company has in all material respects anadequatecontrolsbothapplicabletoanauditofInternalFinancial controls system over financialreporting and such internal financial financial over financial reporting were operatingeffectively as at 31st March 2017 based on the internal control over financial reportingcri -teria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

For MEHRA GOEL & CO. For MEHROTRA & MEHROTRA
Chartered Accountants reporting assessing Chartered Accountants the risk that
(FRN: 000517N) (FRN: 000226C)
sd/- sd/-
R.K. Mehra M.P. Mehrotra
Partner Partner
M. No: 006102 M. No : 005699
Place: New Delhi
Dated: 5th July 2017