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Bajaj Hindusthan Sugar Ltd.

BSE: 500032 Sector: Agri and agri inputs
NSE: BAJAJHIND ISIN Code: INE306A01021
BSE 00:00 | 07 Apr 3.12 0.14
(4.70%)
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3.12

HIGH

3.12

LOW

3.12

NSE 00:00 | 07 Apr 2.95 0.10
(3.51%)
OPEN

2.95

HIGH

2.95

LOW

2.95

OPEN 3.12
PREVIOUS CLOSE 2.98
VOLUME 130428
52-Week high 10.08
52-Week low 2.34
P/E 3.71
Mkt Cap.(Rs cr) 354
Buy Price 3.12
Buy Qty 95212.00
Sell Price 2.98
Sell Qty 1.00
OPEN 3.12
CLOSE 2.98
VOLUME 130428
52-Week high 10.08
52-Week low 2.34
P/E 3.71
Mkt Cap.(Rs cr) 354
Buy Price 3.12
Buy Qty 95212.00
Sell Price 2.98
Sell Qty 1.00

Bajaj Hindusthan Sugar Ltd. (BAJAJHIND) - Auditors Report

Company auditors report

To the Members of Bajaj Hindusthan Sugar Limited

Report on the Audit of the Standalone Financial Statements Qualified Opinion

1. We have audited the Standalone financial statements of Bajaj Hindusthan SugarLimited ("the Company") which comprise the balance sheet as at March 31 2019the statement of Profit and Loss including the statement of other comprehensive incomethe cash flow statement the Statement of Changes in Equity for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion section of our report the aforesaid standalone Ind AS financialstatements give a true and fair view in conformity with the Indian Accounting Standardsprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2019and its loss changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

2. We draw attention to Note No. 36 (e) regarding the non-provision of premium payableon Optionally Convertible Debentures (OCDs) at the time of redemption of OCDs issued tolenders pursuant to the Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme)which stipulates that the yield to maturity (YTM) being the difference between weightedaverage interest and coupon rate payable as redemption premium at the time of redemptionof OCDs redeemable in 13 equal instalments commencing from the Financial year 2024-25. TheCompany considers such YTM / redemption premium as contingent liability and has notprovided for the same in the books of account for the year ended March 2019 amounting toRs.403.63 crore. The aggregate liability for such YTM from the date of allotment of OCDstill year ended March 31 2019 is Rs.514.50 crore from date of allotment of OCDs. Had suchinterest been provided the reported profit / (loss) for the year ended March 2019 wouldhave been ` (467.71) crore and Net worth of the Company would have been Rs.2890.55 crore.

Material Uncertainty related to Going Concern

3. As stated in Note No.47 of the financial statements the Company continues to incurlosses resulting into reduction of net worth. As at the year end the Company has overdueinstalments of certain debts and dues payable to farmers for sugar cane purchases. Theabove factors indicate a material uncertainty which may cast significant doubt about theCompany's ability to continue as a going concern. However the management expects togenerate positive cash flow from operation this year based on improvement in sugarrecovery percentage & expects further improvement in the operational efficiencies inother parameters based on various corrective measures taken by the Company including therestructuring of debts as stated in the said note and the Company expects to receivebenefits under the Sugar Promotion Policy 2004 pursuant to a favourable Order of Hon'bleSupreme Court of India. Accordingly the Company is of the view that going concern of theaccounting is appropriate.

Our report is not modified in respect of the above matter.

Emphasis of Matter

4. As stated in Note No.45 the Company has exposure aggregating to Rs.1748.35 crorein its three wholly-owned subsidiaries Rs.770.13 crore in other companies which arerelated to group and Rs.511.86 crore in other companies aggregating to Rs.3030.34 crore by way of investments loans accumulated interest on these loans and receivables. Theabove exposure is considered good and recoverable by the management based on the futureprojections valuation reports ongoing efforts for obligation casted on the Company andpromoters to recover the outstanding loans in phased manner in terms of the agreementsexecuted to give effect to the debt restructuring schemes from time to time andaccordingly no provision has been considered necessary.

Our report is not modified in respect of the above matter.

Key Audit Matters

5. Key audit matters are those matters that in our professional judgement were ofmost significance in our audit of the financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters.

We have determined the matters described below to be key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone financial statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying standalone financial statements.

Impairment assessment for Investments loans and interest on loan & receivables(refer Note No. 2.20 (i) for accounting policy and Note No. 45 for Investments)

The Company has exposure aggregating to Rs.1748.35 crore in its three wholly-ownedsubsidiaries Rs.770.13 crore in other companies which are related to group and Rs.511.86crore in other companies by way of investments loans accumulated interest on theseloans and receivables. Such investments are carried at cost as per Ind AS 27 –Separate Financial Statements and are individually assessed for impairment as per Ind AS36 - Impairment of Assets.

We focussed on this area due to magnitude of the carrying value of investments loansaccumulated interest on loan and receivables related to subsidiary companies othercompanies related to group and other companies which comprise 21% of the total assets asat March 31 2019 and are subject to annual impairment assessment.

Our audit procedures in respect of testing impairment assessment in case ofinvestments loans given interest accrued on loans and receivables related to subsidiarycompanies other companies related to group and other Companies included the following:a. Obtained understanding of the process evaluated the effectiveness of controls inrespect of impairment assessment of investments in subsidiaries and other companiesrelated to group. b. Held discussions with management regarding appropriate implementationof policy on impairment. c. Evaluated the future projections and valuation report of theother companies related to group. d. Confirmations for above exposure. e. Validated theS4A Restructuring Scheme. f. We evaluated the impairment assessment performed bymanagement taking into account the requirements of Ind AS 36 – Impairment of Assets.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

6. The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in Board's Reportincluding Annexures to Board's Report Corporate Governance and Shareholder's Informationbut does not include the standalone financial statements and our auditor's report thereon.Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information we are required to report that fact. We have nothing to reportin this regard.

Responsibility of Management and Those Charged with Governance for the StandaloneFinancial Statements

7. The Company's Board of Directors / Management is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance (changes in equity) and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements 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 financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative 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 Financial Statements

8. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

a. Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

b. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theCompanies Act 2013 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.

c. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

d. Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

e. Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.Materiality is the magnitude of misstatements in the standalone financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant defficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. 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

9. 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 Companies Act 2013 we give in the Annexure A statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

10. 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. Except for the possible effects of the matters described in the Basis of Qualifiedopinion paragraph above in our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

c. The Balance Sheet the Statement of Profit and Loss and the Statement of Cash Flowsand Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account.

d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended except requirement of Ind AS 23 onBorrowings Cost with regard to matters described in the Basis of Qualified Opinionparagraph above .

e. The going concern matter described in paragraph 3 under Material Uncertainty relatedto Going Concern paragraph above in our opinion may have adverse effect on thefunctioning of the Company.

f. 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.

g. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

h. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended.

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of Section 197 of the Act.

i. 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 in our opinionand 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 financialposition in its financial statements – Refer Note 36 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and

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

For Chaturvedi & Shah LLP
Chartered Accountants
Firm Registration No. 101720W/W100355
Lalit R. Mhalsekar
Partner
Membership No. 103418
Mumbai
Dated: May 22 2019

Annexure "A" referred to in paragraph 11 under the heading Report on otherlegal and regulatory requirements of our report of even date

i. In respect of its Fixed Assets :

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.

b. As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.

c. According to the information and explanations given to us the immovable propertiesof the Company have been mortgaged with the lenders and the original title deeds aredeposited with the lender's trustee. Based on the confirmation given by the trustee andverification of the copies of the title deeds / lease deeds in respect of immovableproperties of freehold land buildings and immovable properties of land that have beentaken on lease and disclosed as fixed assets in the financial statement are held in theCompany's name or in the Company's erstwhile name or in the name of companies amalgamatedwith the Company in past.

ii. In respect of its inventories: As explained to us physical verification ofinventories have been conducted at reasonable intervals by the management which in ouropinion is reasonable having regard to the size of the Company and nature of itsinventories. No material discrepancies noticed on such verification of inventories ascompared to the book records.

iii. On the basis of the audit procedures applied by us and according to theinformation and explanations given to us on our enquiries on this behalf and recordsproduced to us for our verification the Company has not given loans and advances toCompanies covered in the register maintained under Section 189 of the Act.

iv. In respect of loans investments guarantees and security the Company has compliedwith the provisions of Sections 185 and 186 of the Act except in respect of one subsidiarywherein no interest is charged by the Company.

v. According to the information and explanations given to us the Company has notaccepted any deposits within the meaning of provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the rules framed thereunder. Therefore the provisionsof Clause (v) of paragraph 3 of the Order are not applicable to the Company.

vi. To the best of our knowledge and as explained the Company has maintained the costrecords specified under Companies (cost records and audit) Rules 2014 issued under subsection (1) of Section 148 of the Act in respect of Company's products to which saidrules are made applicable and are of the opinion that prima facie the prescribed accountsand records have been made and maintained.

We have however not made a detailed examination of the records with a view todetermine whether they are accurate. vii. In respect of Statutory dues :

a. According to the records of the Company undisputed statutory dues including Goodsand Services Tax Provident Fund Income-Tax Sales-Tax Service Tax Duty of CustomsDuty of Excise Value Added Tax Cess and any other statutory dues applicable to it havebeen generally regularly deposited with appropriate authorities. According to theinformation and explanations given to us no undisputed amounts payable in respect of theaforesaid dues were outstanding as at March 31 2019 for a period of more than six monthsfrom the date of becoming payable.

b. On the basis of our examination of accounts and documents on records of the Companyand information and explanations given to us upon enquires in this regard the disputedamounts payable in respect of Income Tax Sales Tax Service Tax Custom Duty and ExciseDuty/Cess not deposited with the appropriated authorities are as under:

Name of Statute Nature of Dues Amount ( ` in Crore) Period Forum where dispute is Pending
Central Sales Tax Act 1956 and Sales Tax Act/VAT Act of various states & GST Act Sales Tax VAT and Entry Tax GST 5.56 Various year from 2011-12 to 2017-18 Commissioner Sales Tax/VAT
47.70 Various year from 1982-83 to 2013-14 Sales Tax Appellate Tribunal
3.42 Various year from 1989-90 to 2010-11 High Court
Central Excise Act 1944 Excise and Service Tax 0.92 Various year from 2006-07 to 2016-17 Commissioner of Central Excise (Appeals)
0.25 Various year from 2008-09 to 2015-16 Central Excise and Service Tax Appellate Tribunal
5.59 From 2004-05 Supreme Court
0.05 Various year from 2004-05 to 2015-16 High Court
Total 63.49

viii. In our opinion and according to the information and explanations given to us theCompany has delayed in repayment of dues to financial institutions banks and governmentduring the year. The lenderwise details of the delays made by the Company as on March 312019 is tabulated as under:-

Name of Institutions Principal

No. of Days - Range

Amount (`in Crore) - Range
Bank Min Max Min Max
Allahabad Bank 4 37 0.27 8.69
Bank of Baroda 11 16 0.07 1.73
Bank of India 11 23 0.04 1.73
Bank of Maharashtra 4 30 0.20 4.35
Canara Bank 5 40 0.13 4.35
Central Bank of India 4 74 0.21 6.6

 

Name of Institutions Principal

No. of Days - Range

Amount (` in Crore) - Range
Bank Min Max Min Max
Corporation Bank 19 58 0.09 4.17
IDBI Bank Ltd 9 39 0.00 4.45
Indian Overseas Bank 13 25 0.06 2.62
Oriental Bank of Commerce 8 26 0.20 3.81
Punjab National Bank 5 58 0.44 12.28
State Bank of India 1 53 0.06 12.02
UCO Bank 19 31 0.58 3.9
Sugar Development Fund 27 58 0.19 0.35

 

Name of Institutions Principal
No. of Days - Range Amount (` in Crore) - Range
Bank Min Max Min Max
Bank of India 1 50 0.01 0.38
Bank of Maharashtra 1 50 0 0.97
Corporation Bank 1 50 0.02 0.54
IDBI Bank Ltd 1 57 0 1.85
Indian Overseas Bank 1 50 0.01 0.64
Oriental Bank of Commerce 1 50 0.01 0.88
UCO Bank 1 51 0.04 0.91

The lenderwise details of the default as on March 31 2019 is tabulated as under:

Name of Institutions Principal Outstanding as on 31.03.2019* Interest Outstanding as on 31.03.2019**
Allahabad Bank 14.31 2.65
Bank of Baroda 3.46 0.65
Bank of India 2.04 0.42
Bank of Maharashtra 10.19 1.77
Canara Bank 6.93 1.21
Central Bank of India 9.82 1.92
Corporation Bank 4.04 0.83
IDBI Bank Ltd 8.96 1.69
Indian Overseas Bank 3.10 0.85
Oriental Bank of Commerce 10.94 1.68
Punjab National Bank 17.76 3.43
State Bank of India 30.72 5.57
UCO Bank 4.48 0.86
Total 126.74 23.52

*default of Principal amount of loan has been made subsequently good by Company in themonth of April and May 2019 **default of Interest amount of loan has been madesubsequently good by Company in the month of April and May 2019

ix. The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments) or term loan during the year and hence clause (ix) ofparagraph 3 of the Order is not applicable to the Company.

x. Based on the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per information and explanations given to usno fraud by the Company or on the Company by its officers or employees has been noticed orreported during the year.

xi. In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. In our opinion Company is not a nidhi Company. Therefore the provisions ofclause (xii) of paragraph 3 of the Order are not applicable to the Company.

xiii. In respect of transactions with related parties: In our opinion and according tothe information and explanations given to us all transactions with related parties are incompliance with Sections 177 and 188 of the Act and their details have been disclosed inthe financial statements etc. as required by the applicable accounting standards.

xiv. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.

xv. In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transaction with the directors or personsconnected with him and covered under Section 192 of the Act. Hence clause (xv) of theparagraph 3 of the Order is not applicable to the Company.

xvi. To the best of our knowledge and as explained the Company is not required to beregistered under Section 45-IA of the Reserve Bank of India Act 1934.

For Chaturvedi & Shah LLP
Chartered Accountants
Firm Registration No. 101720W/W100355
Lalit R. Mhalsekar
Partner
Membership No. 103418
Mumbai
Dated: May 22 2019

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 12(g) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Bajaj Hindusthan Sugar Limited ofeven date)

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

We have audited the internal financial controls over financial reporting of BAJAJHINDUSTHAN SUGAR LIMITED ("the Company") as of March 31 2019 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls 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. 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 respective Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that 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 judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe internal financial controls system over financial reporting of the Company.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide 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 over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

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 financial controls 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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Chaturvedi & Shah LLP
Chartered Accountants
Firm Registration No. 101720W/W100355
Lalit R. Mhalsekar
Partner
Membership No. 103418
Mumbai
Dated: May 22 2019