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Camson Bio Technologies Ltd.

BSE: 538858 Sector: Others
NSE: N.A. ISIN Code: INE845E01012
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VOLUME 202
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Buy Price 4.70
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OPEN 3.99
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VOLUME 202
52-Week high 14.06
52-Week low 3.99
P/E
Mkt Cap.(Rs cr) 12
Buy Price 4.70
Buy Qty 12.00
Sell Price 3.99
Sell Qty 123120.00

Camson Bio Technologies Ltd. (CAMSONBIOTECH) - Auditors Report

Company auditors report

Qualified Opinion

We have audited the accompanying Standalone Ind AS financial statements of CamsonBio Technologies Limited ("the company") which comprise the BalanceSheet asat 31st March 2019 and the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information (herein after referred to as " Standalone Ind AS financialstatements").

In our opinion and to the best of our information and according to the explanationsgiven to us Except for the effects of matter prescribed in "Basis for QualifiedOpinion Paragraph" below the aforesaid Standalone Ind AS financial statementsgive the information required by the Companies Act 2013 ("Act") in the mannerso required and give a true and fair view in conformity with the Indian AccountingStandards prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended ("Ind AS)" and other accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2019 and its Loss including Other Comprehensive Income the changes inequity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

(a) Attention is invited to Note- 5 to the Standalone Ind AS Financial Statementswherein the Company has reported Biological Asset for an amount of Rs.67.63 lakhs as on31.03.2019 for which the basis of valuation and its recognition has not been produced forour verification. Hence we are unable to comment on value of the Biological assetreported.

(b) Attention is invited to Note- 6 to the Standalone Ind AS Financial Statementswherein the company has reported investment in equity shares of M/s Camson Agri VenturesPrivate Limited Rs.3.40 Crores (6500 shares of face value of Rs.10 each & 3393500shares at Rs.17.60 each) as on 31.03.2019. However we have not been provided with theAudited Financial statements of M/s Camson Agri Ventures Private Limited (AssociateCompany) for the FY 2018-19. Hence we are unable to comment on the impact on statement ofprofit and loss if any and on the carring value of investment due toprofitability/performance of the Associate company.

(c) Attention is invited to Note- 9 to the Standalone Ind AS Financial Statementswherein the company has reported Rs.25.88 Crore as inventory held by the company as on31.03.2019. Due to the nature of inventory we could not verify the quantity as well asvalue of the inventory and we could not satisfy ourself about the correctness of quantityof inventory held. Also we have not been provided with the basis for valuation of theinventory. Further during the year the company has revalued the inventory as a resultthere is a reduction of inventory to the extent of Rs.12.65 Crore the basis of suchrevaluation has not been provided to us. In view of the above we are unable to comment onthe value of inventory reported.

(d) Attention is invited to Note- 10 to the Standalone Ind AS Financial Statementswherein the Company has not provided the breakup for trade receivables reported in theStandalone Ind AS financial statements as on 31.03.2019. Furher we have not been providedwith confirmation of balances for trade receivables as on thet date. Hence we cannotcomment on the reliability of the Trade Receivables balances.

(e) Attention is invited to Note-11 to the Standalone Ind AS Financial Statementswherein the Company has not provided the confirmation of balances and status of accountfor certain Bank and NBFC accounts as on 31.03.2019. The impact of the same if any onthe Standalone Ind AS financial statements could not be quantified as the requisiteinformation and records are not made avilable for our verification.

(f) Attention is invited to Note- 16 & 19 to the Standalone Ind AS FinancialStatements wherein the Company has not provided for interest and other charges payableduring the year to certain Banks and NBFC accounts due to non-receipt of statement andconfirmation of balances. The impact of the same on the Standalone Ind AS financialstatements could not be quantified as the requisite information and records are not madeavailable for our verification. Further during the year the company has reversed intereston secured loans which was provisioned during earlier period/year amounting to Rs.7.46crore resulting in understatement of loss and liabilities.

(g) Attention is invited to Note- 17 to the Standalone Ind AS Financial Statementswherein the company has recognised liability towards gratuity of Rs.4.95 lakhs during theyear which is not as per acturial valuation.

Hence we are unable to comment on whether the gratuity liability has been accounted asper Ind AS 19 (Employee Benefits).

(h) Attention is invited to Note- 20 to the Standalone Ind AS Financial Statementswherein the company has not provided the breakup for Trade payables reported in theStandalone Ind AS financial statements as on 31.03.2019. Further we have not beenprovided with confirmation of balances for trade payables as on that date. Hence wecannot comment on the reliability of the Trade Payable balance.

(i) Attention is invited to Note- 25 to the Standalone Ind AS Financial Statementswherein the company has reported Rs.2.31 Crores under miscellaneous income being reversalof employees'salary payable.

However we have not been provided with employeewise breakup of salary payable ageingof the liability and supporting documents for such write off. And there were no othersatisfactory audit proceedures that we could adopt to satisfy ourself that the reversal ofliability is free from material misstatement.

(j) Attention is invited to Note- 25 to the Standalone Ind AS Financial Statementswherein the company has reported Rs.79.07 lakh under miscellaneous income being reversalof Trade Payables. However we have not been provided with Vendor wise trade payableageing of the liability and supporting documents for such write off. And there were noother satisfactory audit procedures that we could adopt to satisfy ourself that thereversal of liability is free from material misstatement.

We conducted our audit of the Standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) specified under section 143(10) of the Companies Act2013. Our responsibilities 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 issuedby the Institute of Chartered Accountants of India together with the Ethical requirementsthat are relevant to our audit of the Standalone Ind AS financial statements under theprovisions of the Companies Act 2013 and the Rules there under and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide the basis for our opinion on the Standalone Ind AS financial statements

Emphasis of Matters:

i. We draw attention to Note 38 of the Standalone Ind AS financial statementswherein during the FY 2015-16 the Company had received communication from certainshareholders to conduct forensic audit on the financial matters of the Company. TheCompany had earlier replied to the said shareholders requesting specific facts andscope/areas for the forensic audit. However as per the representation received from theBoard of Directors / Management of the Company there is no pursuance from thecomplainants and due to no substantial framework was provided for the forensic audit to beconducted the Company's Board of Directors have decided to drop the proposal of suchforensic audit. In view of these matters described in the aforesaid Note we are unable tocomment on the applicability of the audit and consequential impact thereof in the event ofmaterialization of such forensic audit.

ii. We draw attention to Note 20 of the Standalone Ind AS financial statementswherein the Company is yet to receive confirmation of balances from majority of thevendors for trade payables and also their status under MSMED Act 2006.

iii. As detailed in Annexure B to this report (With respect to the adequacyof the internal financial controls over financial reporting) there is no adequateinternal audit system in place in the company during the year in commensurate with itssize and nature of operation. Our opinion is not qualified in respect of the abovematters.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the Standalone Ind AS financial statements of the currentperiod. These matters were addressed in the context of our audit of Standalone Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. No. Key Audit Matter Auditor's Response
1. Revenue Recognition Principal Audit Procedures
Revenue from the sale of goods (hereinafter referred to as "Revenue") is recognised when the Company performs its obligation to its customers and the amount of revenue can be measured reliably and recovery of the consideration is probable. The timing of such recognition in case of sale of goods is when the control over the same is transferred to the customer which is mainly upon delivery. Our audit approach was a combination of test of internal controls and substantive procedures including:
The timing of revenue recognition is relevant to the reported performance of the Company. The management considers revenue as a key measure for evaluation of performance. • Assessing the appropriateness of the Company's revenue recognition accounting policies in line with Ind AS 115 ("Revenue from Contracts with Customers") and testing thereof.
• Evaluating the design and implementation of Company's controls in respect of revenue recognition.
• Testing the effectiveness of such controls over revenue cut off at year-end.
• Testing the supporting documentation for sales transactions recorded during the period closer to the year end and subsequent to the year end including examination of credit notes issued after the year end to determine whether revenue was recognised in the correct period.

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

Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information comprises the informationincluded in the annual return but does not include the Standalone Ind AS financialstatements 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 theother information is materially inconsistent with the Standalone Ind AS financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated. If based on the work we have performed we conclude thatthere is a material misstatement of this other information we are required to report thatfact. We have nothing to report in this regard.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Management is responsible for the matters stated in Section 134(5) of theCompanies Act 2013 ("the Act") with respect to the preparation of theseStandalone Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 and 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 the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due 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.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

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 assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Ind AS financialstatements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional scepticism 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 controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act 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 reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 disclosure is inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.

• Evaluate the overall presentation structure and content of the Standalone IndAS financial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the Standalone Ind AS financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the Standalone Ind AS financial statementsmay be influenced. We consider quantitative materiality and qualitative factors in (i)planning the scope of our audit work and in evaluating the results of our work; and (ii)to evaluate the effect of any identified misstatements in the Standalone Ind AS financialstatements.

We also communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings that we identifyduring 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 of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 section 143(11) of the Act we givein the "Annexure A" a statement on the matters specified in theparagraph 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 Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flows dealt with by thisreport 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 Rule 7 of theCompanies (Accounts) Rules 2014 Companies (Indian Accounting Standards) Rules 2015 asamended;

(e) On the basis of written representations received from the directors as on March 312019 and taken on record by the Board of Directors none of the directors aredisqualified as on March 31 2019 from being appointed as a director in terms of section164 (2) of the Act;

(f) 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".

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

(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.

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

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

For YCRJ & Associates
Chartered Accountants
Firm Registration No. 006927S
Place: Bangalore Yashavanth Khanderi
Date: 28.05.2019 Partner
Membership No. 029066

"Annexure A" to the Independent Auditors Report

(referred to in paragraph 1 under the heading ‘Report on Other Legal &Regulatory Requirements'of our report of even date to the Standalone Ind AS financialstatements of the Company for the year ended 31st March 2019.)

As per the books and records produced before us and as per the information andexplanations given to us and based on such audit checks that we considered necessary andappropriate we confirm that:

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

(b) A major portion of fixed assets have been physically verified by the management inaccordance with the programme of verification which in our opinion provides for physicalverification of all fixed assets at reasonable interval having regard to the size of thecompany and nature of its assets.

(c) According to the information and explanations given to us and records examined byus and based on the examination of the leave and license agreement registered sale deedprovided to us we report that the title deeds comprising all the immovable propertiesof land and buildings except for Immovable properties mentioned below are held in the nameof the Company as at the balance sheet date. In respect of immovable properties of landand buildings that have been taken on lease and disclosed as fixed asset in the StandaloneInd AS financial statements the lease agreements are in the name of the Company wherethe Company is the lessee in the agreement.

(ii) We have not been provided with Inventory verification report and details of basisof valuation of the inventories held by the companies. Hence we are unable to comment onclause (ii) of paragraph 3 of the order.

(iii) According to the information and explanation given to us the Company has grantedloans to companies or other parties covered in the register maintained under section 189of the Companies Act 2013. In respect of which:

(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.

(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act However we have not been provided with detailed breakup for advances receivedfrom customers and their aging hence we are unable to comment on whether the company hasaccepted the deposits as per the Companies (Acceptance of Deposits) Rules 2014 (asamended).

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 and we are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. We have not howevermade a detailed examination of the records with a view to determine whether they areaccurate or complete.

(vii) According to the Information and Explanations given to us in respect ofstatutory dues

(a) The Company has been not been regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance GST Income tax Sales Tax Wealthtax Service tax Duty of Customs Duty of Excise Value Added Tax Cess and otherstatutory dues with the appropriate authorities.

(b) There are undisputed amounts payable in respect of Provident Fund Employees'StateInsurance Income tax Sales Tax (GST) Service Tax Customs Duty Excise Duty ValueAdded Tax cess and other material statutory dues in arrears as at March 31 2019 for aperiod of more than six months from the date they became payable and below are the detailsof the same:

Name of Statute Nature of Dues Amount (Rs.In lakhs) Period to which the Amount Relates Forum where dispute is pending
Employee Provident Act 1952 PF 58.79 June 2016 to August 2018 NA
Employee State Insurance ESI 1.16 June 2017 to August 2018 NA
Income Tax Act 1951 Sec 194C 3.08 September 2016 to August 2018 NA
Sec 194I 4.24 August 2016 to September 2018 NA
Sec 194J 8.36 August 2016 to September 2018 NA
Sec 194B 114.01 June 2016 to August 2018 NA
Sec 194A 3.87 April 2018 to August 2018 NA
Commercial Taxes Department Karnataka PT Payable 0.80 Till August 2018 NA

(c) There are no dues of Income-tax Sales Tax Service Tax Customs Duty Excise Dutyand Value Added Tax as on March 31 2019 on account of disputes. Except below mentioned:

Name of Statute Nature of Dues Amount (Rs.In lakhs) Period to which the Amount Relates Forum where dispute is pending
Income Tax Act 1961 Assessment u/s 143 (3) 217.27 AY 2012-13 AO
Income Tax Act 1961 Assessment u/s 144 317.63 AY 2010-11 AO
Income Tax Act 1961 Assessment u/s 271 (1)(b) 0.10 AY 2010-11 AO
Income Tax Act 1961 Assessment u/s 143 10.74 AY 2009-10 AO
Income Tax Act 1961 Assessment u/s 143 (3) 45.30 AY 2013-14 AO
Income Tax Act 1961 Assessment u/s 143 (3) 855.34 AY 2015-16 DCIT
Income Tax Act 1961 Assessment u/s 271 (1)(C ) 791.19 AY 2015-16 AO

(viii) We have not been provided with details/confirmations/bank statements for theloan accounts of the company. Hence we are unable to provide details required in clause(viii) of paragraph 3 of the order

(ix) According to the information and explanations given by the management the Companyhas not raised any money by way of initial public offer or further public offer or debtinstruments. Further term loans were applied for the purpose for which the loans wereobtained.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the Standalone Ind AS financial statements and according to the informationand explanations given by the management we report that no fraud by the Company or nomaterial fraud on the Company by the officers and employees of the Company has beennoticed or reported during the year.

We draw attention to Note 38 of the Standalone Ind AS financial Statement during theFY 2015-16 the Company had received communication from certain shareholders to conductforensic audit on the financial matters of the Company. The Company had earlier replied tothe said shareholders requesting specific facts and scope/areas for the forensic audit.However as per the representation received from the Board of Directors / Management ofthe Company there is no pursuance from the complianants and due to the involvement ofsubstantial cost for conducting the forensic audit the Company's Board of Directors havedecided to drop the proposal of such forensic audit.

In view of the matters described in the aforesaid Note we are unable to commentwhether any fraud by the Company or on the Company by its officers or employees may haveoccurred

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

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

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the Standalone Ind AS financial statements as requiredby the applicable accounting standards.

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

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

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

For YCRJ & Associates
Chartered Accountants
Firm Registration No. 006927S
Place: Bangalore Yashavanth Khanderi
Date: 28.05.2019 Partner
Membership No. 029066

Annexure - B to the Independent Auditor's Report of even date on the Standalone Ind ASfinancial statements of Camson Biotechnologies Limited

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

We have audited the internal financial controls over financial reporting of CamsonBio Technologies Limited as of 31st March 2019 in conjunction with ouraudit of the Standalone Ind AS financial statements of the Company for the year ended onthat 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 company's policies the safeguarding ofits 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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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 auditor's 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 Standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that: (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the Company are being made only in accordance withauthorizations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on the StandaloneInd AS 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.

Qualified Opinion

According to information and explanation given to us the following material weaknesshas been identified in the operating effectiveness of the Company's internal financialcontrols over financial reporting as at March 2019

a) There is no adequate internal audit system in place in the company in commensuratewith its size and nature of operation. Hence we are unable to comment on the existence ofeffective risk assessment process in the company which could potentially result in thelack of control over overall operations of the company.

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

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 2019based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India. and except for the effects/possible effects of thematerial weakness described above on the achievement of the objectives of the controlcriteria the Company's internal financial controls over financial reporting wereoperating effectively as of March 31 2019

We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2019Standalone Ind AS financial statements of the Company and the material weakness do notaffect our opinion on the Standalone Ind AS financial statements of the Company.

For YCRJ & Associates
Chartered Accountants
Firm Registration No. 006927S
Place: Bangalore Yashavanth Khanderi
Date: 28.05.2019 Partner
Membership No. 029066