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Ashoka Buildcon Ltd.

BSE: 533271 Sector: Engineering
NSE: ASHOKA ISIN Code: INE442H01029
BSE 14:49 | 13 Aug 64.40 3.90
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NSE 14:44 | 13 Aug 64.35 3.95
(6.54%)
OPEN

61.45

HIGH

66.40

LOW

61.35

OPEN 62.00
PREVIOUS CLOSE 60.50
VOLUME 537766
52-Week high 127.90
52-Week low 37.00
P/E 4.62
Mkt Cap.(Rs cr) 1,808
Buy Price 64.40
Buy Qty 439.00
Sell Price 64.50
Sell Qty 290.00
OPEN 62.00
CLOSE 60.50
VOLUME 537766
52-Week high 127.90
52-Week low 37.00
P/E 4.62
Mkt Cap.(Rs cr) 1,808
Buy Price 64.40
Buy Qty 439.00
Sell Price 64.50
Sell Qty 290.00

Ashoka Buildcon Ltd. (ASHOKA) - Auditors Report

Company auditors report

To the Members of Ashoka Buildcon Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of AshokaBuildcon Limited ("the Company") which comprise the Balance sheet asat March 31 2019 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2019its profit including other comprehensive income its cash flows and the changes in equityfor the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficientand appropriate to provide a basisfor our audit opinion on the standalone Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 31 2019. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key audit matters How our audit addressed the key audit matter
(a) Revenue recognition for long term construction contracts (as described in note 31 of the standalone Ind AS financial statements)
The Company's significant undertaken through long term construction contracts. Revenue from these contracts is recognized over a period of time in accordance with the requirements of Ind AS 115 Revenue from Contracts with Customers. Due to the nature of the contracts revenue recognition involves usage of percentage of completion method which is determined based on proportion of contract costs incurred to date compared to estimated Total contract costs which involves significant judgments identification of contractual obligations and the Company's rights to receive payments for performance completed till date changes in scope and consequential revised contract price and recognition of the liability for loss making contracts. Our audit procedures included the portion of business is following:
• Reading the Company's revenue recognition accounting policies and assessing compliance with the policies in terms of Ind AS 115.
• We performed test of controls over revenue recognition with specific focus on determination of progress of completion recording of costs incurred and estimation of costs to complete the remaining contract obligations through inspection of evidence of performance of these controls.
• We performed tests of details on a sample basis and read the underlying customer contracts for terms and conditions performed review of costs incurred with estimated costs to identify significant variations and assess whether those variations have been considered in estimating the remaining costs to complete and consequential determination of stage of completion which formed the basis of revenue recognition under the input method.
• We reviewed the management's evaluation process to recognize revenue over a period of time status of completion for projects and Total cost estimates.
• We tested contracts with exceptions including contracts with low or negative margins contracts with significant changes in planned cost estimates contacts with significant contract assets and contract liabilities and significant overdue net receivable positions for contracts and tested these exceptions with its correlation with the underlying contracts documents for the triggers during the period.
• We tested that the contractual positions and revenue for the year are presented and disclosed in compliance of Ind AS 115 in the Standalone Ind AS financial statements.
Impairment of Company's Interest in subsidiaries and joint ventures (as described in note 4 of the standalone Ind AS financial statements)
Management reviews regularly whether there are any indicators of impairment of the investments and where impairment indicators exist the management estimates the recoverable amounts of the investments being higher of fair value less costs of disposal and value in use. The value in use of the underlying businesses is determined based on the discounted cash flow projections. Significant judgements are required to determine the key assumptions used in the discounted cash flow models such as revenue growth discount rate traffic growth and toll rates. Accordingly the impairment of the Company's interest in subsidiaries was determined to be a key audit matter in our audit of the standalone Ind AS financial statements. Our audit procedures included the following:
• We performed the test of control over the management assessment of impairment indicators of interest in subsidiaries and joint ventures and where impairment indicators exists the control over the management estimate for the recoverability of these investments.
• We assessed the assumptions around the key drivers of the cash flow forecasts including traffic growth toll rates discount rates and expected revenue growth rates.
• We also assessed the recoverable value headroom by performing sensitivity testing of key assumptions used.
• We discussed potential changes in key drivers as compared to previous year / actual performance with management in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable.
• With the support of internal valuation specialist we assessed the appropriateness of the valuation methodology and the reasonableness of the key assumptions adopted in the cash flow forecasts for select investments.
• We tested the arithmetical accuracy of the models.
Disputed Tax Matters (as described in note 51(e) of the standalone Ind AS financial statements)
The Company has disclosed disputed tax matters in Note 51(e) of Rs. 17705 lakhs including income tax demand of Rs. 5385 lakhs made during the current year pursuant to the search proceedings carried in April 2016. Our audit procedures include the following:
Tax litigation exposures have been identified as a key audit matter due to: • Obtained understanding and assessed the internal control environment relating to the identification recognition and measurement of provisions for disputed tax matters.
• Significance of these amounts. • Obtained the summary of disputed tax matters from management and assessed management's position through discussions on both the probability of success in significant cases and the magnitude of any potential loss.
• Significant and assumptions required by management in assessing the exposure of each case to evaluate whether there is a need to set up a provision and measurement of exposures as well as the disclosure of contingent liabilities. • Read evidence judgement to corroborate management's assessment of the risk profile in respect of tax disputed matters.
• Assessment orders were received for the financial years 2010-11 to 2016-17 pursuant to the search proceedings by treating certain sub- disputed contractors payments as non -genuine. • We verified underlying documents submitted by the Company to the tax authorities including the response to the income tax assessment orders under section 153A for the financial years 2010-11 to 2016-17.
We focused on this matter because of the potential financial impact on the financial statements. Additionally the treatment of tax litigation require significant judgement due to the complexity of the cases and timescales for resolution. • We involved tax specialists to assist us in evaluating tax positions taken by management.
• We read the orders received by the Company relating to the disallowance of certain sub-contractors payments.
We assessed the disclosures relating to the tax matters as mentioned in Note 51(e) of the Standalone Ind AS financial statements.

We have determined that there are no other key audit matters to communicate in ourreport.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone Ind AS financial statements and our auditor's report thereon.

Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flowsand changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation 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.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone Ind AS financial statements.

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

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

Obtain an understanding of internal control relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

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

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone Ind AS financialstatements for the financial year ended March 31 2019 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

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 terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.

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 including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;

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

(e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure 2" to this report;

(g) In our opinion the managerial remuneration for the year ended March 31 2019 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements Refer Note 51(i) 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 includingderivative contracts Refer Note 22 and 29 to the standalone Ind AS financial statements;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For S R B C & CO LLP

Chartered Accountants and Loss

ICAI Firm Registration Number: 324982E/E300003

sd/-

per Amyn Jassani

Partner

Membership Number: 046447

Place of Signature: Mumbai

Date: May 22 2019

ANNEXURE 1 TO THE INDEPEDENT AUDITORS' REPORT

ANNEXURE 1 - STATEMENT ON MATTERS SPECIFIED IN PARAGRAPHS 3 AND 4 OF THE COMPANIES(AUDITOR'S REPORT) ORDER 2016

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

(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the company except for title deed in case of two buildings (Gross Block ofRs.151.64 Lakhs Net Block Rs.136.62 Lakhs) for which transfer deed is yet to be executedin the name of the Company.

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

(iii) (a) The Company has granted loans to nineteen companies covered in the registermaintained under section 189 of the Companies Act 2013. In our opinion and according tothe information and explanations given to us the terms and conditions of the grant ofsuch loans are not prejudicial to the company's interest.

(b) The Company has granted loans to nineteen companies covered in the registermaintained under section 189 of the Companies Act 2013. The schedule of repayment ofprincipal and payment of interest has been stipulated for the loans granted and therepayment/receipts are regular.

(c) There are no amounts of loans granted to companies firms or other parties listedin the register maintained under section 189 of the Companies Act 2013 which are overduefor more than ninety days.

(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities given in respect of whichprovisions of section 185 and 186 of the Companies Act 2013 are applicable and hence notcommented upon.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) 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 undersection 148(1) of the Companies Act 2013 related to road and other infrastructureprojects and are of the opinion that prima facie the specified accounts and records havebeen made and maintained. We have not however made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of custom duty of excise value addedtax goods and service tax cess and other material statutory dues have been regularlydeposited with the appropriate authorities though there has been a slight delay in a fewcases.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax goods and service tax cessand other statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable.

(c) According to the records of the Company the dues of income-tax sales-tax servicetax duty of custom duty of excise value added tax goods and service tax and cess onaccount of any dispute are as follows:

Name of Statute Nature of dues Amount (Rs. in lakhs) Period to which the amount relates Forum where dispute is pending
Income Tax Act Tax 1961 Interest and Penalty 611.72 2003-04 Bombay High Court
20.50 2010-11 Income Tax Appellate Tribunal
5716.80 2010-11 2011-12 2012-13 2013-142014-15 2015-16 2016-17 Commissioner of Income Tax (Appeals)
Customs Act 1962 Custom Duty 83.34 2000-01 CESTAT Mumbai
Finance Act 1995 Service Tax 71.06 2005-06 Supreme Court of India
State and Central Tax Interest 1.93 2008-09 Deputy Commissioner (Appeals) Gujarat
Sales Tax Acts and Penalty 19.52 2008-09 Deputy Commissioner (Appeals) Chhattisgarh
22.34 2009-10 Appellate Additional Commissioner (Appeals) Chhattisgarh
1512.78 2011-12 & 2013-14 Senior Joint Commissioner West Bengal
4669.34 2006-07 & 2009-10 Maharashtra Sales Tax Tribunal
46.41 2014-15 Commercial Taxes Tribunal Bihar
0.32 2007-08 Assistant Commissioner Rajasthan
1739.21 2014-15 West Bengal Tax Tribunal
1013.03 2012-13 & 2014-15 Assessing Officer/Joint Commissioner Maharashtra

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to afinancial institution bank or dues to . debenture holders

(ix) In our opinion and according to the information and explanations given by themanagement the Company has utilized the monies raised by way of term loans/ debtinstrument for the purposes for which they were raised. The Company has not raised anymoney by way of initial public offer / further public offer during the year.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no fraud on the companyby the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) In our opinion the Company is not a Nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company.

(xiii)According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

Sd/-

per Amyn Jassani

Partner

Membership Number: 046447

Place of Signature: Mumbai

Date: May 22 2019

ANNEXURE 2 TO THE INDEPEDENT AUDITORS' REPORT

ANNEXURE 2 - TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS OF ASHOKA BUILDCON LIMITED

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

We have audited the internal financial controls over financial reporting of AshokaBuildcon Limited ("the Company") as of March 31 2019 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing as specified under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls and both issuedby the Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these standalone financial statements was established andmaintained and if such controls operated effectively in all material respects.

An audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to thesestandalone financial statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting with reference to these standalonefinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the internal financial controls overfinancial reporting with reference to these standalone financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to theseStandalone Financial Statements

A company's internal financial control over financial reporting with reference to thesestandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial control over financial reporting with referenceto these standalone financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the 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 withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting WithReference to these Standalone Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone financial statements to future periods are subject to the risk thatthe internal financial control over financial reporting with reference to these standalonefinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing material weakness has been identified in the operating effectiveness of theCompany's internal financial controls over financial reporting with reference to thesestandalone financial statements as at March 31 2019:

The Company's internal financial controls over subcontractors' selection and; approvalof work-orders and invoices for contract labour were not operating effectively which couldhave potentially resulted in excess payments to subcontractors.

A ‘material weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial such that there is a reasonable possibility thata material misstatement of the company's annual or interim financial statements will notbe prevented or detected on a timely basis.

In our opinion the Company has in all material respects maintained adequate internalfinancial controls over financial reporting with reference to these standalone financialstatements as of March 31 2019 based on the internal control over financial reportingcriteria 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 and except for thepossible effects of the material weakness described above on the achievement of theobjectives of the control criteria the Company's internal financial controls overfinancial reporting with reference to these standalone financial statements were operatingeffectively as of March 312019.

Explanatory paragraph

We also have audited in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct the standalone financial statements of Ashoka Buildcon Limited which comprise theBalance Sheet as at March 31 2019 and the related Statement of Profit and Loss and CashFlow Statement for the year then ended and a summary of significant accounting policiesand other explanatory information. This material weakness was considered in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2019standalone financial statements of Ashoka Buildcon Limited and this report does not affectour report dated May 22 2019 which expressed an unqualified opinion on those financialstatements.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

Sd/-

per Amyn Jassani

Partner

Membership Number: 046447

Place of Signature: Mumbai

Date: May 22 2019