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Jindal Steel & Power Ltd.

BSE: 532286 Sector: Metals & Mining
NSE: JINDALSTEL ISIN Code: INE749A01030
BSE 13:54 | 20 Feb 253.45 3.35
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NSE 13:39 | 20 Feb 252.00 2.00
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OPEN 250.15
PREVIOUS CLOSE 250.10
VOLUME 641989
52-Week high 294.15
52-Week low 92.15
P/E
Mkt Cap.(Rs cr) 23,226
Buy Price 252.95
Buy Qty 488.00
Sell Price 253.45
Sell Qty 200.00
OPEN 250.15
CLOSE 250.10
VOLUME 641989
52-Week high 294.15
52-Week low 92.15
P/E
Mkt Cap.(Rs cr) 23,226
Buy Price 252.95
Buy Qty 488.00
Sell Price 253.45
Sell Qty 200.00

Jindal Steel & Power Ltd. (JINDALSTEL) - Auditors Report

Company auditors report

TO THE MEMBERS OF JINDAL STEEL & POWER LIMITED

Statements Report on the standalone Ind AS financial

We have audited the accompanying standalone Ind AS financial statements of JINDALSTEEL & POWER LIMITED ("the Company") which comprise the Balance Sheetas at 31st March 2017 the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement for the year then ended and the statement of changes inequity for the year then ended and a summary of the significant accounting policies andother explanatory information (herein after referred to as "standalone Ind ASfinancial statements").

Management's Responsibility for the standalone Ind AS Financial Statements

The Company's Board of Directors is responsibleforthematters statements. Webelieve that stated in Section 134(5) of the Companies Act 2013 ("the Act")with respect to the preparation of these standalone Ind AS financialstatements that give atrue and fair view of the financial position financialperformance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) prescribed under Section issued thereunder. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; statements and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial 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 in accordance with the Standards on

Auditing specified underSection143(10) oftheAct. (11) of section 143 of the Act andrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financialstatements are free frommaterial misstatement. agraphs 3 and 4 of the Order

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments control relevant to the the auditor considers internalfinancial Company's preparation of the standalone Ind AS financial that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our audit opinion onthe standalone Ind AS financial statements.

Basis of Qualified Opinion:

We draw attention regarding impact on the net carrying value of fixed assets/investmentmade in mining assets not been considered for the reason stated in the Note133oftheActreadwithrelevantrules No. 58 to the standalone financialstatements of the company for the year ended 31st March 2017 and the management's viewabout additional levy paid of amounting to Rs 1274.46 crore (being differential amountbetween Gross and Net) as stated in the Note No. 57 to the standalone financial selectionof the Company for the year ended 31st March 2017 which shown as good and recoverable.

Qualified Opinion controlsthatwereoperatingeffectivelyforensuring the

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects/ possible effects of our observation stated in"Basis of Qualified Opinion paragraph" above the aforesaid standalone Ind ASfinancial statements give the information required by the Act in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India including the Ind AS of the state of affairs (financial position) ofthe Company as at 31st March 2017 and its loss (financial performance including othercomprehensive income/loss) ) its cash flows and the changes in equity for the year endedon that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in on terms of sub-section the basis of suchchecks of the books and records of the Company as we considered appropriate and accordingto the information and explanations given to us during the course of audit we give in theAnnexure ‘A' a statement on the matters . specifiedinthe

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 bestof 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 theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome the Cash Flow Statement and statement of changes in equity dealt with by thisReport are in agreement with the books of account.

(d) In our opinion except for the effect / possible effect matters described in‘Basis of Qualified Opinion' above the aforesaid standalone Ind ASfinancialstatements comply with the Accounting Standards specifiedunder Section

133 of the Act read with relevant rule issued thereunder.

(e) The Matters described in ‘Basis of Qualifiedopinion' paragraph above in ouropinion may not have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act.

(g) As required by section 143(3)(i) of the Companies Act 2013 and based on thechecking of the books and records of the

Company as we considered appropriate and according to the information and explanationsgiven to us our separate with respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsis as per Annexure ‘B'.

(h) With respect to the other matters to be included in the

Auditor's Report in accordance with Rule 11 of the Companies

(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements refer Note no. 41 to the standaloneInd AS financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long term contracts includingderivatives contracts. the iii. There has been no delay in transferring amounts requiredto be transferred to the Investor Education and ProtectionFund by the Company.

iv. The company had provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 and these are in accordance with the books of accountsmaintained by the company. Refer Note No. 15 to the standalone Ind AS financialstatements.

Annexure "A" referred to in paragraph 1 under the heading "Report onother legal and regulatory requirements" of our report of even date on the StandaloneFinancial Statements of JINDAL STEEL & POWER LIMITED for the year ended 31st March2017

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of Physical Verification of its Fixed assets bywhich fixed asset been verified by the management according to the programe of periodicalphysical verification in a phased manner which in our opinion is reasonable having regardto the size of the Company and the nature of its fixed on such physical assets. Thediscrepancies noticed verification were not

(c) According to the information and explanationsgiven to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded in fixed assets are held in the name of the Company.

2. The inventories of the Company [except stock lying with the third parties (read withfootnote of Note no. 55 (a)) and in transit] part of stores and spares have beenphysically verified by the management at reasonable intervals. In our opinion theprocedures of physical verification of inventory followed by the Management are reasonablein relation to the size of the Company and nature of its business. The discrepanciesnoticed on such physical verification of inventory ascompared tobook to the extentrecords were not material.

3. The Company has not granted any loans secured or unsecured to companies firms orother maintained under section 189 of the Companies Act 2013.

4. According to the information explanations and representations provided by themanagement and based upon audit procedures performed we are of the opinion that inrespect of loans investments guarantees and security the Company has complied with theprovisions of the Section 185 and 186 of the Companies Act 2013.

5. In our opinion and according to the information and explanationsgiven to us theCompany has not accepted any deposit from the public within the meaning of the directiveissued by the Reserve Bank of India and the provisions of Section 73 to76 of the Act orany other relevant provisions of the Act and the rules framed there under (to the extentapplicable). We have been informed that no order has been passed by the Company Law Boardor NationalCompany Law Tribunal or Reserve Bank of India or any Court or other Tribunal inthis regard.

6. . We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central

Government for the maintenance of cost records under section 148(1) of the Act inrespect of the Company's products to which the said rules are made applicable and are ofthe opinion that prima facie the prescribed records have been made and maintained. Wehave however not made a detailed examination of the said records with a view todetermine whether they are accurate or complete.

7. (a) According to the records of the Company the Company is regular in depositingundisputed statutory dues including provident fund employees' state insurance incometax sales-tax service tax duty of customs duty of excise value added tax cess andother material statutory dues with the appropriate authorities and there are no undisputedstatutory dues payable for a period of more than six months from the date they becomepayable as at 31st March 2017 except coveredintheregister electricity duty / cess1.65 crore CST Rs 4.66 crore VAT Rs 5.93 crore Royalty Rs 0.86 crore TDS/TCS Rs1.04crore Development & Env. Tax Rs 0.78 crore service tax Rs 0.21 crore Exciseduty Rs 0.12 crore & Professional tax Rs 0.01 crore.

(b) According to the records and information & explanations given to us the duesin respect of income tax service tax duty of customs duty of excise sales tax and valueadded tax thathavenotbeendepositedwiththeappropriateauthoritieson account of any disputeand the forum where the dispute is pending are given below: -

Name of Statute Nature Of Dues Amount (Rs crore) Period to which amount relates Closing Forum where dispute is pending
1 The Income Tax Act 1961 Income Tax 921.16 FY 2004-05 to FY 2010-11 Income Tax Appellate Tribunal New Delhi
2 The Income Tax Act 1961 Income Tax 350.08 FY 2007-08 to FY 2008-09 Punjab & Haryana High Court Chandigarh
3 The Income Tax Act 1961 Income Tax 42.26 FY 2003-04 to FY 2004-05 Punjab & Haryana High Court Chandigarh
4 Central Excise Act 1944 Excise Duty 100.43 FY 2001-02 to FY 2013-14 CESTAT – Delhi
5 Custom Act 1962 Custom Duty 13.98 FY 2013-14 CESTAT – Hyderabad
6 The Finance Act 1994 Service Tax 9.78 FY 2003-04 to FY 2010-11 CESTAT – Delhi
7 The Finance Act 1994 Service Tax 0.41 FY 2011-12 to FY 2015-16 Additional Commissioner Raipur
8 Tamil Nadu Sale Tax Act State Sales Tax 0.72 FY 2008-09 to FY 2009-10 The Appellate Deputy Commissioner-III Chennai
9 The Odisha Entry Tax Act & Rules Entry Tax 73.14 FY 2007-08 to FY 2010-11 Sales Tax Tribunal Cuttack Odisha
10 The Odisha Entry Tax Act & Rules Entry Tax 8.53 November 2010 to july 2011 Hon'ble High Court of Orissa
11 The Odisha Entry Tax Act & Rules Entry Tax 0.16 FY 2007-08 Add. Commissioner of Sales Tax Cuttack
12 The Odisha Entry Tax Act & Rules Entry Tax 0.01 FY 2006-07 Deputy CommissionerCommercal Tax (Appeals)Cuttack
13 Central Sales Tax 1956 Central Sales Tax 0.09 FY 2005-06 Deputy Commissioner Sales tax Rourkela
14 Central Sales Tax 1956 Central Sales Tax 0.45 FY 2006-07 Deputy CommissionerCommercial Tax Cuttack
15 The Odisha Value Added Tax Act 2004 State Sales Tax 0.16 FY 2006-07 Deputy CommissionerCommercial Tax (Appeals)Cuttack
16 The Odisha Entry Tax Act & Rules Entry Tax 22.04 FY 2007-08 to FY 2010-11 Additional CCT of Cuttack
17 The Finance Act 1994 Service Tax 0.59 FY 2015-16 Commissioner of Central Excise (Appeal) Raipur
18 Custom Act 1962 Custom Duty 3.66 FY 2013-14 CESTAT Kolkata
19 Custom Act 1962 Custom Duty 1.86 FY 2005-06 CESTAT – Mumbai
20 The Chattisgarh Entry Tax Act & Rules Entry Tax 0.08 FY 2013-14 Joint Commissioner of Commercial Tax Cuttack
21 Central Excise Act 1944 Excise Duty 0.50 FY 2014-15 to FY 2015-16 Commissioner Appeal Ranchi
22 Central Excise Act 1944 Excise Duty 0.33 FY 2010-11 CESTAT New Delhi
23 Central Excise Act 1944 Excise Duty 11.33 FY 2011-12 Commissioner of Central Excise Raipur
24 Central Excise Act 1944 Excise Duty 0.01 FY 2006-07 to FY 2016-17 Assistant Commissioner of Central Excise Raigarh
25 Central Excise Act 1944 Excise Duty 1.69 FY 2015-16 Commissioner of Central Excise (Appeal) Raipur
26 Central Excise Act 1944 Excise Duty 55.24 FY 2007-08 to FY 2016-17 Commissioner of Central Excise Raipur
27 Central Excise Act 1944 Excise Duty 20.71 FY 2004-05 to FY 2015-16 CESTAT New Delhi
28 Central Excise Act 1944 Excise Duty 0.71 FY 2007-08 to FY 2013-14 Hon'ble High Court Bilaspur
29 Central Sales Tax 1956 Central Sales Tax 7.52 FY 2012-13 to FY 2013-14 Hon'ble Orissa High Court
30 Central Sales Tax 1956 Central Sales Tax 0.11 FY 2005-06 Deputy Commissioner of Commercial Tax Cuttack
31 Central Sales Tax 1956 Central Sales Tax 23.66 FY 2010-11 to FY 2014-15 Deputy Commissioner of Commercial Tax Ramgarh
32 Central Sales Tax 1956 Central Sales Tax 0.09 FY 2010-11 Revision Board (Tribunal)
33 Central Sales Tax 1956 Central Sales Tax 0.16 FY 2011-12 to FY 2012-13 Joint Commissioner
34 Central Sales Tax 1956 Central Sales Tax 0.01 FY 2013-14 Joint Commissioner
35 The Odisha Value Added Tax Act State Sales Tax 17.07 FY 2006-07 to FY 2013-14 Hon'ble High Court of Orissa
2004
36 The Odisha Value Added Tax Act 2004 State Sales Tax 0.16 FY 2006-07 Deputy Commissioner of Commercial Tax Cuttack
37 The Jharkhand Value Added Tax Act 2005. State Sales Tax 2.75 FY 2011-12 to FY 2013-14 Deputy Commissioner of Commercial Tax Ramgarh
38 The Jharkhand Value Added Tax Act 2005. State Sales Tax 0.07 FY 2015-16 Commissioner of Commercial Tax Ranchi Jharkhand.
39 West Bengal Sales Tax ACT State Sales Tax 0.05 FY 2010-11 Revision Board (Tribunal)

8. In our opinion on the basis of audit procedures and according to the informationand explanations given to us the company has defaulted in repayment of dues (includinginterest) to banks and financial institutions at various days during the year (read withnote nos. 23 & 27). The maximum amount of default on a particular date was Rs 1657.98crore (including default of Rs 66.85 crore w.r.t. outstanding debentures) and maximumdelay (no. of days) noticedwas less than 90 Days (maximum delay of less than 90 Daysw.r.t. outstanding debentures). As at March 31 2017 the overdue financial obligations tobanks/ financial institutions/debenture holders was Rs 544.39 crore with maximum delay ofless than 90 Days the lender wise detail of amount of default at year-end is as follows:

Bank Name Amount of Default as at balance sheet date Rs In crore Period of Default
Andhra Bank 3.80 Less than 90 Days
Axis Bank 44.32 Less than 90 Days
Bank of America 2.12 Less than 90 Days
Bank of Baroda 0.40 Less than 90 Days
Bank of India 0.87 Less than 90 Days
Bank of Maharashtra 10.65 Less than 90 Days
Canara Bank 11.30 Less than 90 Days
Central Bank of India 4.69 Less than 90 Days
Corporation Bank 9.34 Less than 90 Days
Credit Agricole 9.05 Less than 90 Days
DBS 0.19 Less than 90 Days
Deutsche Bank 7.85 Less than 90 Days
Exim Bank 6.93 Less than 90 Days
Franklin Templeton Asset Management 27.81 Less than 90 Days
(India) Private Limited *
HDFC Bank 11.65 Less than 90 Days
ICICI Bank 54.73 Less than 90 Days
ICICI Bank (Hong kong) 36.80 Less than 90 Days
IDBI Bank Limited 1.32 Less than 90 Days
IDFC Limited 18.78 Less than 90 Days
Indian Bank 9.59 Less than 90 Days
L&T Infra 5.30 Less than 90 Days
LIC OF INDIA 36.80 Less than 90 Days
Mizuho Bank Limited 32.60 Less than 90 Days
Punjab & Sindh Bank 7.22 Less than 90 Days
Punjab National Bank 18.41 Less than 90 Days
Standard Chartered Bank 2.96 Less than 90 Days
State Bank of Bikaner & Jaipur 11.03 Less than 90 Days
State Bank of Hyderabad 8.19 Less than 90 Days
State Bank of India 13.90 Less than 90 Days
State Bank of Mysore 6.27 Less than 90 Days
State Bank of Patiala 43.04 Less than 90 Days
State Bank of Travancore 7.58 Less than 90 Days
Syndicate Bank 35.59 Less than 90 Days
UCO Bank 9.89 Less than 90 Days
Union Bank of India 19.80 Less than 90 Days
Vijaya Bank 13.62 Less than 90 Days
Grand Total 544.39

On the basis of information and explanationsgiven to us term loan were applied for thepurpose for which the loans were obtained.

No moneys have been raised during the year by way of initialpublic offer or furtherpublic offer.

10. Based on the audit procedure performed and on the basis of informationandexplanations provided by the management no fraud by the Company and no material fraud onthe Company by its officers or employees has been noticed or reported during the course ofthe audit.

11. According to the information and explanations us and based on our examination ofthe records of the Company managerial remuneration has been paid/ provided in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV to the Companies Act read with note no. 54 B

12. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

13. According to the information and explanations and made available by the managementof the Company and audit procedure performed for transactions with the related partiesduring the year the Company has complied with the provisions of Section 177 and 188 ofthe Act where applicable. As explained and as per records details of related partytransactions have been disclosed in the standalone Ind AS financial statements as per theapplicable Accounting Standards [Read with note no. 54 B].

14. According to the information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year read with note no. 21(e); except allotment of equity sharesunder employees share purchase scheme 2013 of the Company in respect of which requirementof section 42 of the Act have been complied with and the amount raised have been used forthe purpose for which the funds were raised.

15. On the basis of records made available to us and according to information andexplanations given to us the Company has not entered into non-cash transactions with thedirectors or given to persons connected with him.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

Annexure ‘B' To The Independent Auditor's Report of Even Date on The StandaloneInd As Financial Statements of Jindal Steel & Power Limited

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of of March31 2017 in conjunction with our audit of the standalone Ind AS financial statements ofthe Company for the year ended on that 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat operating effectively for ensuring the orderly and efficient of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detectionof frauds and errors the accuracy and completeness of the accountingrecords and the timelypreparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting

"Guidance Note") and the Standards on Auditing issued by ICAI deemed to beprescribed under section 143(10) of the Act 2013 to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain were reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financialcontrols system over financial reporting and their operatingeffectiveness. Our internal financial controls over financial reporting included obtainingan understanding of internal financial controls over financial reporting assessing therisk that a material weakness exists and testing and evaluating the design and operatinginternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial

Reporting

A company's internalfinancialcontrol over financialreporting is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control overfinancialreporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures and reported of the company are being made only in accordance withauthorizations of management and directors of the company; and (3)providereasonableassuranceregardingpreventionor timely of the detection of unauthorizedacquisition use or disposition 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 financialreporting 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 financialcontrols over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations on our audit the following materialweaknesses has been identified in the operating effectiveness of the Company's internalfinancial controls over financial reporting as at 31st March 2017: of (a)Adjustment/provision to be made in regard to expense relating to additionalcoal levy couldpotentially result in the Company recording lower expense. (Note No…) effectivenessof (b) Provision/Impact of the net carrying value of fixed assets/ investment made inmining assets not been considered (presently not determinable); which may result incarrying the statementswhether assets at higher value. (Note No…)

A ‘material weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the Company's annual or interim financialstatements will not be prevented or detected on a timely basis.

In our opinion except for the effects / possible effects of the material weaknessesdescribed above in (a) and (b)under Qualified paragraph on the achievement of theobjectives of the control criteria the Company has in all material respects an adequateinternal financialcontrols system over financial reportingand such internal financialcontrols over financial reporting were operating effectively as of March 31 2017 basedon the internal control over financialreporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

We have considered material weakness above in determining the nature timing andextent of audit tests applied in our audit of the March31 2017 standalone financialstatements of the Company and these material weaknesses affect our opinion on standalonefinancial statements of the Company for the year ended 31st March 2017 [our audit reportdated May 23 2017 which expressed an qualified opinion on those standalone financialstatements of the Company].

For LODHA & CO.

Chartered Accountants

FRN: 301051E

N.K. LODHA

Partner

Membership No. 085155

Place: New Delhi

Dated: 23rd May 2017