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Bharat Forge Ltd.

BSE: 500493 Sector: Engineering
NSE: BHARATFORG ISIN Code: INE465A01025
BSE 00:00 | 22 May 284.05 -7.40
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291.20

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294.80

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277.85

NSE 00:00 | 22 May 284.35 -7.25
(-2.49%)
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287.65

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294.45

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OPEN 291.20
PREVIOUS CLOSE 291.45
VOLUME 168839
52-Week high 533.10
52-Week low 207.85
P/E 15.62
Mkt Cap.(Rs cr) 13,225
Buy Price 285.05
Buy Qty 450.00
Sell Price 284.05
Sell Qty 38.00
OPEN 291.20
CLOSE 291.45
VOLUME 168839
52-Week high 533.10
52-Week low 207.85
P/E 15.62
Mkt Cap.(Rs cr) 13,225
Buy Price 285.05
Buy Qty 450.00
Sell Price 284.05
Sell Qty 38.00

Bharat Forge Ltd. (BHARATFORG) - Auditors Report

Company auditors report

To the Members of Bharat Forge Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of BharatForge Limited ["the Company"] which comprise the Balance sheet as at March31 2019 the Statement of Profit and Loss including the statement of Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and notes to the financial statements including a summary of significantaccounting 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 accompanying financial statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for 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
Completeness of revenue in relation to determination of point of time when revenue should be recognized (refer note 2.2(e) (accounting policy) and note 24 (financial disclosures) to the standalone Ind AS financial statements)
The Company has revenue from sale of products which includes finished goods and tooling income and sale of services in the form of job work charges. The Company manufactures highly specialized forged and machined finished goods per specification provided by the customers and based on the schedules from the customers. Our audit procedures included:
• We focused on our understanding of the Company's sales process including design and implementation of controls and tested the operating effectiveness of these controls.
• We read and understood the Company's accounting policy for revenue recognition.
The Company recognizes revenue from sale of finished goods at a point of time based on the terms of the contract with customers which varies for each customer. Determination of point in time includes assessment of timing of transfer of significant risk and rewards of ownership establishing the present right to receive payment for the products delivery specifications including inco terms timing of transfer of legal title of the asset and determination of the point of acceptance of goods by customer. Further the pricing of the products is dependent on metal indices and foreign exchange movements making the price volatile including variable considerations. • We obtained and read the terms of customer contracts on sample basis to assess various performance obligations in the contract the point of time of transfer of control and pricing terms.
• We tested on a sample basis sales invoices for identification of point of timefortransfer of control and terms of contract with customers. Further we have performed procedures on sales by testing on a sample basis to assess whether the control was passed for the sales made at or around the year end based on various supporting documents.
Due to judgments relating to determination of point of time in satisfaction of performance obligations with respect to sale of products this matter has been considered as key audit matter. * We also performed various analytical procedures to identify any unusual sales trends for further testing.
Significant estimate and judgement in Hedge accounting including valuations thereof [refer note 2.2[r] [accounting policy) and note 9 and 49 [financial disclosures) to the Ind AS standalone financial statements)
The Company enters into derivative financial instruments which are mainly plain vanilla forward contracts to manage its exposure of foreign currency risk of highly probable forecasted transactions which arise during the normal course of its business. These contracts are measured at fair values leading to derivative financial assets of INR 1982.94 million as at March 31 2019. The net movement of cashflow hedge reserve for the year is INR 33.29 million net of taxes which is recorded in other comprehensive income. The gain / loss on maturity of such derivative instruments is recorded in the statement of profit and loss along with the relevant hedged item. Our audit procedures included:
• We obtained understanding of the Company's overall hedge accounting strategy forward contract valuation and hedge accounting process from initiation to settlement of derivative financial instruments including assessment of the design and implementation of controls and tested the operating effectiveness of these controls.
• We assessed Company's accounting policy for hedge accounting in accordance with Ind AS.
• We tested the existence of hedging contracts by tracing to the confirmations obtained from respective banks.
Due to the changes in risks and estimates during the lifecycle of the customer contracts in order to apply hedge accounting management is required to demonstrate that the underlying contract is considered to be a highly probable transaction thatthe hedges are highly effective and maintain appropriate hedge documentation. A degree of subjectivity is also required to determine when hedge accounting is to be considered as ineffective. Fair value movements of the forward contracts are driven by movements in financial markets. These transactions may have a significant financial effect and have extensive accounting and reporting obligations and accordingly this is considered as a key audit matter. • We tested management's hedge documentation and contracts on a sample basis.
• We tested on a sample basis the fair values of derivative financial instruments recorded by the Company with the independent balance confirmations obtained from banks.
• We involved our valuation specialists to assist in re-performing the year-end fair valuations of derivative financial instruments on a sample basis and compared these valuations with those recorded by the Company including assessing the valuation methodology and key assumptions used therein.
• We assessed the disclosure of hedge transactions in the financial statements.
Key audit matters How our audit addressed the key audit matter
Significant judgement relating to impairment of investments in subsidiaries associates and joint ventures (refer note 2.2 (nj (accounting policy] and note 6 (financial disclosures] to the standalone Ind AS financial statements]
The Company has major investments in subsidiaries associates and joint ventures as at March 31 2019. The management assesses at least annually the existence of impairment indicators of each shareholdings in such subsidiaries associates and joint ventures. The processes and methodologies for assessing and determining the recoverable amount of each investments are based on complex assumptions that by their nature imply the use of the management's judgment in particular with reference to identification of impairment indicators forecast of future cash flows relating to the period covered by the Company's strategic business plan normalized cash flows assumed as a basis for terminal value as well as the long-term growth rates and discount rates applied to such forecasted cash flows. Considering the judgment required for estimating the cash flows and the complexity of the assumptions used this is considered as a key audit matter. Our audit procedures included
• We obtained understanding of the Company's policy on assessment of impairment of investment in subsidiaries associates and joint ventures and assumptions used by the management including design and implementation of controls. We have tested the operating effectiveness of these controls.
• We assessed the methodology used by management to estimate the recoverable value of each investment and consistency with accounting standards.
• We compared the carrying values of the Company's investment in these subsidiaries associates and joint ventures with their respective net asset values as per audited financial statements.
• With respect to cases where indicators of impairment were identified by management we obtained and read the projections / future cash flows along with sensitivity analysis thereof with respect to the relevant investments.
• We evaluated management's methodology assumptions and estimates used in the calculations.
• We evaluated the accounting and disclosure of investment impairments in the financial statements of the Company.

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 standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and Those charged with Governance for the Standalone IndAS 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 flows and 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 charged with governance are also responsible for overseeing the Company'sfinancial reporting 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 Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

* 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 theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

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

* 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 standalone Ind AS 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 the standalone Ind ASfinancial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves 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 anysignificant deficiencies 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 and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with 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 Act read with Companies[Indian Accounting 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 38 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 20 to the standalone Ind AS financial statements;

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

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Tridevlal Khandelwal

Partner

Membership Number: 501160

Place of Signature: Pune

Date: May 20 2019

Annexure 1 referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date.

Re: Bharat Forge Limited (‘the Company')

[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 verifying them once in three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies 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 six immovable properties aggregating gross block of INR 0.01million and net block of INR 0.01 million as at March 31 2019 for which title deeds werenot available with the Company and hence we are unable to comment on the same.

[ii] The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. Inventories lying with third parties have beenconfirmed by them as at March 31 2019 and no material discrepancies were noticed inrespect of such confirmations.

[iii] [a] The Company has granted loans to two companies covered in the registermaintained under section 189 of the Act. In our opinion and according to the informationand explanations given to us the terms and conditions of the loans are not prejudicial tothe Company's interest.

[b] In respect of loans granted to companies covered in the register maintained undersection 189 of the Act repayment of the principal amount is as stipulated and payment ofinterest has been regular except for loans granted by the Company to one of itssubsidiaries wherein loans are repayable on demand. The Company has not demanded therepayment of such loans and payment of interest has not been regular.

[c]

The Company has a sum of INR 6.73 million which is overdue for more than ninety daysfrom a Company covered in the register maintained under section 189 of the Act and in ouropinion and according to the information and explanations given by the management theCompany has taken reasonable steps for recovery of this overdue interest.

Details of overdue cases mentioned below:

INR in million
Name of Company Interest Overdue
BF Elbit Advanced Systems Private Limited* 6.73

* Amount has been converted to loan as on March 31 2019

[iv] In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Act in respect of loans to directors includingentities in which they are interested and in respect of loans and advances giveninvestments made and guarantees and securities given have been complied with by theCompany.

[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. Howeveraccording to the information and explanations given to us in respect of deposits acceptedearlier under relevant provisions of the erstwhile Companies Act 1956 and the rulesframed thereunder there are certain unclaimed deposit amounting to INR 0.04 millionincluding interest thereon which are subject to litigation.

[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 Act related to the manufacture of forged products and are of theopinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.

[vii] [a] Undisputed statutory dues including provident fund employees' stateinsurance income-tax duty of custom duty of excise goods and service tax cess andother material statutory dues have generally been regularly deposited with the appropriateauthorities though there has been slight delay in few cases.

[b] According to the information and explanations given to us undisputed dues inrespect of provident fund employees' state insurance income-tax duty of custom duty ofexcise goods and service tax cess and other statutory dues which were outstanding atthe year end for a period of more than six months from the date they became payable areas follows:

Statement of arrears of statutory dues outstanding for more than six months

Name of the statute Nature of the dues Amount (INRin million) Period to which the amount relates Due date Date of payment Remarks if any
Maharashtra municipal Corporation Act 1949 and Bombay Provincial Municipal Corporation [Local Body Tax] Rules 2010[LBT rules] Local Body Tax [LBT] 39.80 PY 2015- 16 2016- 17 & 2017-18 Various dates Not paid

[c] According to the records of the Company the dues outstanding of income-taxsales-tax service tax duty of custom duty of excise value added tax goods and servicetax and cess on account of any dispute are as follows:

Name of the statute Nature of the dues Amount CINRin million)# Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Non deduction of withholding taxes u/s 195 [INR 54.92 million] AY 2014-15 ITAT
Property tax# Demand received for various cases [INR 149.09 million paid under protest] 164.66 AY 2005-06 to 2016-2017 High Court
Central Excise Act 1944 Demand received for various cases [INR 8.96 million paid under protest] 49.36 AY 2004-05 to 2016-2017 Commissioner Appeals / CESTAT/ High Court
Customs Act 1962 Demand received for wrong availment of duty drawback [INR 157.40 million paid under protest] AY 2012-13 and 2013-14 Principal Commissioner [RA] and Ex-Officio Additional Secretary to the Government of India

 # Excludes interest and penalty

[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 government or dues to debenture holders. The Company didnot have any outstanding dues in respect of a financial institution and 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 for thepurposes for which they were raised. The Company does not have any unutilised money out ofinitial public offer / further public offer.

[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 material fraud onthe Company by the officers and employees of the Company has been noticed or reportedduring 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 Act.

[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 and hence not commented upon.

[xiii] According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 of theAct where applicable and the details have been disclosed in the notes to the financialstatements 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 year andhence reporting requirements under clause 3[xiv] are not applicable to the company andnot 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 the Act.

[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

per Tridevlal Khandelwal

Partner

Membership Number: 501160

Place of Signature: Pune

Date: May 20 2019

Annexure 2 referred to in paragraph 2[f) under the heading "Report on Other Legaland Regulatory Requirements" of our report of even date.

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

We have audited the internal financial controls over financial reporting of BharatForge Limited ["the Company"] as of March 31 2019 in conjunction with our auditof the standalone Ind AS 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 Ind AS financialstatements based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting [the "GuidanceNote"] and the Standards on Auditing as specified under section 143[10] of theCompanies Act 2013 to the extent 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 reasonable assurance about whether adequate internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to thesestandalone Ind AS financial statements and their operating effectiveness. Our audit ofinternal financial controls over financial reporting included obtaining an understandingof internal financial controls over financial reporting with reference to these standaloneInd AS financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the standalone Ind AS financialstatements whether 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 internal financial controls over financialreporting with reference to these standalone Ind AS financial statements.

Meaning of Internal Financial Controls over Financial Reporting with reference to theseFinancial Statements

A company's internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation ofstandalone Ind AS financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting with reference to these standalone Ind AS financial statements includes thosepolicies and procedures that [1] pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; [2] provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone Ind AS financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and [3] provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting withreference to these Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone Ind AS 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 Ind AS financial statements to future periods are subject to the riskthat the internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements and such internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements were operating effectively as at March 312019 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Tridevlal Khandelwal

Pa rtner

Membership Number: 501160

Place of Signature: Pune

Date: May 20 2019