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Birla Cotsyn India Ltd.

BSE: 533006 Sector: Industrials
NSE: BIRLACOT ISIN Code: INE655I01024
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Birla Cotsyn India Ltd. (BIRLACOT) - Auditors Report

Company auditors report

To the Members of Birla Cotsyn (India) Limited

Report on the Audit of the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of BIRLACOTSYN (INDIA) LIMITED ("the Company") which comprise the Balance Sheet asat 31st March 2018 the Statement of Profit and Loss (including Other ComprehensiveIncome) Statement of Changes in Equity and the Statement of Cash Flows for the year thenended and a summary of significant accounting policies and other explanatory information(hereinafter referred to as "the standalone Ind AS financial statements").

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone Ind AS financial statements that give a true and fairview of the state of affairs profit/loss (including other comprehensive income) changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act.

This responsibility includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

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.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under.

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

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the Standalone Ind ASfinancial statements.

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

Basis for Qualified Opinion

1. With reference to note no.15C regarding Inter Corporate Deposits of Rs.156496666/- taken from various parties as at 31st March 2018 in the absence of thirdparty confirmation reconciliation if any and other supportive audit evidence we areunable to comment upon such balances.

Further few such parties have already filed winding up petition under section 271 and272 of the Companies Act

2013 ("the Act") against the Company for non-payment of dues. These mattersare sub-judice and the impact if any of the outcome is unascertainable of this stage.

2. No provision has been made during the year for interest payable of Rs.18352675/- on Inter-Corporate and other Deposits taken by the Company. Consequently theloss for the period is lower by Rs. 18352675/- and other current liabilities isunderstated by Rs. 18352675/- as at 31st March 2018. Including un-providedinterest of earlier periods Inter-Corporate Loans is understated by Rs.65288274/-.

3. With reference to the dues to related parties note no. 15(B)(b)regarding dues to related parties of Rs. 16348686/-and note no.16(A)(a) tradepayables of Rs. 141801102/- as at 31st March 2018 in the absence of third partyconfirmation reconciliation if any and other supportive audit evidence we are unable tocomment upon such balances.

4. No provision has been made in the current year for interest payable ofRs. 2712511/- on loans taken from related parties by the Company and no provisionhas been made for interest receivable of Rs. 33443960/- on loans given to relatedparties by the Company. Consequently the loss for the year is higher by Rs.30731449/- Other Current Liabilities (Note No 17) is understated by Rs. 2712511/-and Other Non-Current Assets (Note 5) is understated by Rs. 33443960/-. Includingunprovided interest of earlier periods Other Current Liabilities (Note No 17) isunderstated by Rs. 12657293/- and Other Non-Current Assets (Note 5) isunderstated by Rs. 104935836/-.

5. With reference to Fixed Deposits accepted by the Company the Companyhas defaulted in the repayment of depositors. The dues of such depositors as on 31stMarch 2018 is Rs. 6200650. The Hon'ble Company Law Board Mumbai Bench passed anorder dated 27th January 2016 for rescheduling the repayment of the deposits for aspecified period under section 58A(9) read with section 74(2) of the Companies Act 2013.However the company has not repaid the deposits in compliance with the said order passedby the Hon'ble Company Law Board.

6. With reference to note no. 4(c)(ii) regarding loan of Rs.361908831/- given to four related parties which have incurred losses and also havenegative net worth (excluding Revaluation Reserves) as at 31st March 2017. In the absenceof latest audited accounts and detailed information of cash flows as at 31 March 2018 orother supportive audit evidence we are unable to comment upon its impairment if any.

7. With reference to note no. 2 regarding Plant &Machinery of Rs.381162161/-(net block) situated at factory units of the company which are not operatingduring the year in the absence of future cash flow information about the value in use weare unable to comment upon its impairment provision if any as per IND AS- 36"Impairment of Assets".

8. With reference to loan given to Foreign subsidiary the Company hasnot restated the same at exchange rate prevailing on the last day of the reported periodas required by IND-AS 21 " The effect of changes in Foreign Exchange Rates". Asa result the loan to foreign subsidiary for the period is understated by Rs.36069096/- and correspondingly Foreign Currency Translation Reserve for the period isalso understated by Rs. 36069096/-.

9. With reference to capital advance of Rs. 2315279/- as at 31stMarch 2018 given to various parties in the absence of third party confirmationreconciliation if any and other supportive audit evidence we are unable to comment uponits recoverability in cash or kind if any.

10. With reference to trade receivables of Rs. 1691278/- as at 31st March2018 in the absence of third party confirmation reconciliation if any and othersupportive audit evidence we are unable to comment upon its balance recoverability ifany.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above and read with points mentioned in Emphasis of Matter paragraphthe aforesaid financial statements give the information required by the Act in the mannerso required 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 31st March2018 and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

1. We draw attention to the Note no. 12(e) in the financial Statements. Thecompany has incurred net loss of Rs. 889433660/- during the year ended 31stMarch 2018 and as of that date the Company's accumulated losses aggregate to Rs.5999922597/- resulting in complete erosion of its net worth. Further as of that datecompany's current liabilities exceeded its current assets by Rs. 5994811639/-.These factors along with other matters as set forth in said note raise substantial doubtabout the company's ability to continue as a going concern in the foreseeable future.However the company's financial statement has been prepared on going concern basis asdisclosed by management in said note. Our opinion is not qualified in respect of thismatter.

2. We draw attention to Note no. 17A and 17B regarding notice issued byconsortium of banks under section 13(2) of the Securitization and Reconstruction ofFinancial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 for non-paymentof principal and interest thereon after the due date by the company and therefore allloans accounts became Non Performing Assets effective from respective dates mentioned insuch notice. We are informed that the company has challenged the notice and the Bank'saction of taking symbolic possession of the properties of the company under section 13(4)of the SARFAESI Act by filing a Securitisation Application in the Debts Recovery TribunalMumbai which is pending. The consortium of banks has also filed an Original

Application in the Debts Recovery Tribunal Mumbai which is pending. The matters aresub-judice. These factors along-with other matters as set forth in said notice raisesubstantial doubt about the company's ability to continue as a going concern in theforeseeable future. However the company's financial statements have been prepared ongoing concern basis as disclosed by management in said note. Our opinion is not qualifiedin respect of this matter

3. Term Loans and Cash Credit facility of Axis Bank have been assigned toEdelweiss Asset Reconstruction Company Ltd. by the bank vide agreement dated 20.03.2017.Subsequent to the date of the Balance Sheet Edelweiss Asset

Reconstruction Company Ltd. has filed application before the National Company LawTribunal Mumbai Bench dated 04.04.2018 u/s 7 of The Insolvency and Bankruptcy Code 2016("the Code") for the purpose of initiating corporate insolvency resolutionprocess against the Company vide application No. C.P. (IB) No. 579 of 2018. We areinformed that the Company is exploring various legal options available to it under theCode. These factors along-with other matters as set forth in said notice raise substantialdoubt about the company's ability to continue as a going concern in the foreseeablefuture. However the company's financialstatements have been prepared on going concernbasis as disclosed by management in said note. Our opinion is not qualified in respect ofthis matter.

Other Matters

The company had given loan to four related parties in earlier years and the amountoutstanding as at 31st March 2018 Rs. 404098111/- (including interesttill 31st March 2018) which is not in compliance with the requirements of section 185 ofthe Companies Act 2013.

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 "Annexure A" 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 except for thematter described in the Basis for Qualified Opinion Paragraph.

(b) In our opinion proper books of accounts as required by law have been kept by theCompany so far as it appears from our examination of those books.

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

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under section 133 of the Act

(e) Except for the effects of the matters described in the Basis for Qualified Opinionparagraph and read with points mentioned in Emphasis of Matter paragraph in our opinionthe aforesaid standalone Ind AS financial statements comply with the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(f) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on the record by the Board of Directors none of the director isdisqualified as on 31st March 2018 from being appointed as a director in terms of Section164(2) of the Act.

(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 audit report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.

(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 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 standalone Ind AS financial statements- Refer Note 26 to the standaloneInd AS financial statements;

II. The Company does not have any long term contracts including derivative contracts;as such the question of commenting on any material foreseeable losses does not arise

III. During the year the Company has transferred Rs..1303901/- of unclaimed dividendto Investor Education and Protection Fund. Other than this there was no amount ofunclaimed dividend required to be transferred to Investor Education and Protection Fundduring the current year.

IV. The disclosure regarding details of specified bank notes held and transacted during8 November 2016 to 30 December 2016 has not been made since the requirement does notpertain to financial year ended 31 March 2018.

For Samria & Co.

Chartered Accountants

Firm Registration No: 109043W

(AdharSamria) Partner

M.No. 049174

Dated: 23rd May 2018

ANNEXURE TO INDEPENDENT AUDITORS REPORT

With reference to the Annexure A referred to in the Independent Auditor's Report to themembers of the Company on the Standalone Ind AS Financial Statements for the year ended31st March 2018 we report the following :

1 Fixed Assets:

1.1 The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

1.2 The fixed assets are physically verified during the year by the Management inaccordance with a regular program 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 by the management between the book andphysical verification records.

1.3 According to the information and explanations given to us and on the basis of ourexamination of the record of the company the title deeds of immovable properties are heldin the name of the company.

2 Inventories:

2.1 According to the information and explanations given to us and on the basis of ourexamination of the records of the company inventory has been physically verified by theManagement during the year. In our opinion the frequency of verification is reasonableand no major discrepancies were noticed on physical verification.

3 Loans Granted:

3.1 According to information and explanations given to us the Company has not grantedany loans during the year secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013.

3.2 According to the information and explanations given to us the Company does not haveany loan or interest receivable from parties covered in the register maintained undersection 189 of the Companies Act 2013. In the earlier years the Company had granted loansto four body corporate who were covered in the register maintained under section 189 inthose years and which are still outstanding as at 31st March 2018. In case of such loanssince there are no terms for repayment of interest we cannot comment upon the regularityof the same. The terms of arrangements do not stipulate any repayment schedule ofprincipal and interest amount and the loans are repayable on demand. Accordinglyparagraph 3(iii)(b) of the Order is not applicable to the Company in respect of repaymentof the principal amount.

3.3 The terms of arrangements do not stipulate any repayment schedule of principal andinterest amount and the loans are repayable on demand. Accordingly paragraph 3(iii)(c) ofthe Order is not applicable to the Company in respect amount of principal and interestoverdue.

4 Loans and Investments:

4.1 According to the information and explanations given to us and based on the auditprocedures conducted by us during the year the Company has not granted any loansinvestments guarantees or security covered under section 185 or section 186 of theCompanies Act 2013.

4.2 The Company has granted loans to bodies corporate in the earlier year which as onthe date of this balance sheet are in excess of the limit specified under section 186. Nospecial resolution has been passed in the General Meeting for the same.

4.3 The Company has granted interest free loan to its 100% subsidiary in the earlieryears which is receivable at the end of the current financial year. No special resolutionhas been passed in the General Meeting for the same.

4.4 In respect of loans of Rs. 361908831/- given to four companies and outstanding ason 31st March 2018 the terms of the loan provide for payment of interest at a ratehigher than prescribed under section 186. However none of the companies to whom the loanshave been given have paid interest to the Company and the Company has not made anyprovision for interest receivable from such loans in its books of accounts.

5 Deposit from Public:

The Company has defaulted in the repayment of depositors. The dues of such depositorsas on 31st March 2018 is Rs. 6200250. The Hon'ble Company Law Board Mumbai Benchpassed an order dated 27th January 2016 for rescheduling the repayment of the depositsfor a specified period under section 58A(9) read with section 74(2) of the Companies Act2013. However the company has not repaid the deposits in compliance with the said orderpassed by the Hon'ble Company Law Board.

6 Maintenance of Cost Records:

6.1 We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended prescribed by the CentralGovernment under sub-section (1) of section 148 of the Companies Act 2013 and are of theopinion that prima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

7 Remittance of Statutory Dues:

7.1 According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees stateinsurance income-tax sales-tax service tax customs duty excise duty VAT Goods andServices Tax (GST) Cess and other statutory dues have been regularly deposited with theappropriate authorities except in case of TDS as given in para 7.2 below.

7.2 According to the information and explanation given to us no undisputed amountspayable in respect of provident fund employees state insurance income tax wealth taxservice tax sales tax custom duty excise duty Goods and Services Tax (GST) Cess andother undisputed statutory dues were outstanding at the end for the period of more thansix month from the date they became payable except as stated below

Name of the Statute Nature of Dues Amount (Rs.) Period to which the Amount relates Due Date Date of Payment Remark (if Any)
Income Tax Dividend Distribution tax 20165737 2009-10 04-10-2012 Not Paid -
Income Tax TDS on Interest 2068460 2012-13 01-04-2012 to 31-12-2012 Not Paid -
Income Tax TDS on FD Interest 276279 2014-15 01-04-2014 to 30-09-2014 Not Paid -

7.3 According to the information and explanations given to us and as per the records ofthe Company examined by us there are no dues outstanding of sales tax custom dutyservice tax excise duty Goods and Services Tax (GST) and cess which have not beendeposited on account of any dispute. However according to information and explanationsgiven to us the following dues of income tax have not been deposited by the Company onaccount of dispute

Name of the Statue Nature of Dues Amount in (Rs..) Period to which the amount relates Forum where dispute is pending
Income Tax Act1961 Income tax and interest 273281 Assessment Year 2009-2010 CIT (Appeals)
Income Tax Act1961 Income tax and interest 143466369 Assessment Year 2011-2012 CIT (Appeals)
Income Tax Act1961 Income tax and interest 34661725 Assessment Year 2012-2013 CIT (Appeals)
Income Tax Act1961 Income tax and interest 14204631 Assessment Year 2013-2014 CIT (Appeals)

8 Dues to Bank and Financial Institutions

8.1 In our opinion and according to the information and explanation given to us theCompany has defaulted in repayment of dues to financial institutions and banks forprincipal amount of Rs. 2332304243/- and interest amounting of Rs. 3269145627/-since May 2012. The Company has received notice issued by consortium of banks undersection 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcementof Security Interest Act 2002 for non-payment of principal and interest thereon after thedue date by the Company and therefore all loans accounts became Non Performing Assetseffective from respective dates mentioned in such notice. We are informed that the companyhas challenged the notice and the Bank's action of taking symbolic possession of theproperties of the company under section 13(4) of the SARFAESI Act by filing aSecuritisation Application in the Debts Recovery Tribunal Mumbai which is pending.Theconsortium of banks has also filed an Original Application in the Debts Recovery TribunalMumbai which is pending.The matters are sub-judice. Lender wise detail is provided inrespect of default made to bank and financial institutions & Government.

Particulars Amount of Default as at the Balance sheet date (incl. Interest) Period of Default
Union Bank of India (Term Loan) 299665678 September 2012
Union Bank of India (Cash Credit) 262469601 December2012
Axis Bank (Term Loan) 186796708 September 2012
Axis Bank (Cash Credit) 126195629 December2012
Bank of India (Term Loan) 386897875 September 2012
Bank of India (Cash Credit) 1189536217 September 2012
Indian Overseas Bank (Term Loan) 492476821 June 2012
Indian Overseas Bank (Cash Credit) 368067170 October 2012
Oriental Bank of Commerce (Term Loan) 194248591 September 2012
Canara Bank (Term Loan) 246820904 June 2012
Canara Bank (Cash Credit) 279317903 September 2012
State Bank of India (Term Loan) 216893722 February 2013
Catholic Syrian Bank (Term Loan) 135861457 September 2012
Catholic Syrian Bank (Cash Credit) 385509870 December 2012
Jankalyan Sahakari Bank (Term Loan) 49454703 May 2012
Bank of India-Housing Complex (Term Loan) 130315462 September 2012
Karur Vysya Bank (Cash Credit) 650921558 June 2012

9 Application of term loans/public issue/ follow on offer:

9.1 The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3(ix) of the Order is not applicable.

10 Frauds

10.1 According to the information and explanations give to us and based on ourexamination of the records of the Company we have neither come across any instance offraud on or by the Company noticed or reported during the period nor have been informedof any such case by the management.

11 Managerial Remuneration:

11.1 According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

12 Nidhi Company:

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

13 Related Party Transaction:

13.1 According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

14 Preferential Allotment/private placement:

14.1 During the year the Company has made preferential allotment of 17935296/-Equity Shares at par value of Re.1/- per share to Melstar Information TechnologiesLimited on 24th November 2017 aggregating to Rs. 17935296/- by conversionof their loan outstanding including interest payable thereon.

15 Non Cash Transaction:

15.1 According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

16 Registration under RBI:

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

For Samria & Co.

Chartered Accountants

Firm Registration No: 109043W

(AdharSamria)

Partner M.No. 049174

Place: Mumbai

Dated: 23rd May 2018

Annexure B to the Auditors' Report

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 BIRLACOTSYN (INDIA) LIMITED ("the Company") as of 31 March 2018 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). 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 the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the ‘Guidance Note') and the Standards on Auditing issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. 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 were established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error.

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

Meaning of Internal Financial Controls over Financial Reporting

A company's 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 authorizations of theManagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal 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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Samria & Co.

Chartered Accountants

Firm Registration No: 109043W

(AdharSamria)

Partner M.No. 049174

Dated: 23rd May 2018