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Commercial Engineers & Body Builders Company Ltd.

BSE: 533272 Sector: Engineering
NSE: CEBBCO ISIN Code: INE209L01016
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OPEN 12.10
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VOLUME 7684
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OPEN 12.10
CLOSE 12.10
VOLUME 7684
52-Week high 18.50
52-Week low 6.97
P/E
Mkt Cap.(Rs cr) 119
Buy Price 13.31
Buy Qty 889.00
Sell Price 13.29
Sell Qty 100.00

Commercial Engineers & Body Builders Company Ltd. (CEBBCO) - Auditors Report

Company auditors report

To the Members of Commercial Engineers and Body Builders Co Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Commercial Engineers and Body Builders CoLimited ("the Company") which comprise the balance sheet as at 31 March 2019and the statement of profit and loss (including other comprehensive income) statement ofchanges in equity and statement of cash flows for the year then ended and notes to thefinancial statements including a summary of the significant accounting policies and otherexplanatory information (together referred to as 'financial statements').

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Going Concern assessment - Refer to the Note 48 to the financial statements

The key audit matter How the matter was addressed in our audit
In the earlier years the Company had been incurring cash losses affecting its ability to service its borrowings creditors other liabilities and similar obligations. Our procedures performed included among others:
• obtaining and examining management’s projections;
We identified management's use of the going concern assumption in preparing the financial statements as a key audit matter because the factors considered by the management of the Company in their evaluation on the Company’s ability to continue as a going concern are complex which may be inherently uncertain and could be subject to management bias. • discussing with management their plans and the potential sources of funding including sufficient working capital and recourse to finance its operations and continue to operate as a going concern for the foreseeable future and evaluating these in relation to the available evidence and to past experience;
• evaluating the Company’s going concern disclosures in the financial statements by comparing them to our understanding of the matter.

Accounting for Restructuring of Borrowings - Refer to the note 48 to the financialstatements

The key audit matter How the matter was addressed in our audit
During the year the Company the lenders the erstwhile promoters and the incoming investor have entered into a Resolution Plan for restructuring of borrowings which includes following features: Our procedures performed included among others:
• considering the terms of resolution plan entered into by the Company;
- partial waiver of the principal amount of loan and interest; • obtaining accounting analysis of restructuring of borrowings from the management and reviewed the same in light of appropriate accounting guidance;
- issuance of equity shares to the incoming investor;
- transfer of pledged promoter shares to the incoming investor; • testing of significant transactions with supporting documents such as underlying resolution plan board resolutions third party confirmations and valuation reports;
- grant / renewal of the credit facilities subject to certain terms and conditions; and
- issuance of non-convertible redeemable preference shares. • testing the gain on waiver of interest and principal outstanding by the lenders by agreeing to underlying documents;
This has resulted in change in ownership of the Company. • involved internal valuation specialists wherever required;
We have identified the accounting for restructuring of borrowings as a key audit matter because the accounting for restructuring is complex and involves judgement due to contractual terms and assumptions used in determining accounting thereof. • considering the adequacy of disclosures in the financial statements in respect of the restructuring accounting

Revenue Recognition - Refer to the note 2.2(e) to the financial statements

The key audit matter How the matter was addressed in our audit
As disclosed in Note 28 the Company’s revenue from operations for the year ended 31 March 2019 was INR 21579.96 Lakhs. Our procedures performed included among others:
We have identified revenue recognition as a key audit matter because revenue is qualitatively significant to the Statement of • obtaining the understanding of and assessing the design implementation and operating effectiveness of management’s key internal controls in relation to revenue recognition;
Profit and Loss and is one of key performance indicators of the Company there may be risks of material misstatements related to completeness existence and accuracy of revenue recognition. • on a sample basis making selections from sales entries and tracing to their contracts invoices and goods outward register;
• trade receivables outstanding at the year end. Selecting a sample of trade receivables and assessing their recoverability with reference to post year end cash receipts;
• selecting a sample of transactions recorded during the year and assessing whether revenue has been recognised in the correct period with reference to supporting invoices terms and conditions with customers and cash receipts; and
• assessing the appropriateness of unbilled revenue at the year end with reference to post year end billings and cash receipts.

Impairment and Assets held for sale - Refer to the note 3 to the financial statements

The key audit matter How the matter was addressed in our audit
As at 31 March 2019 the Company’s balance sheet includes property plant and equipment amounting to INR 11268.42 Lakhs. Our procedures performed included among others:
The assessment of the recoverable value of these assets or for the relevant cash-generating unit (‘CGU’] incorporates significant judgement in respect of factors such as future production levels sales prices operating/capital costs and economic assumptions such as discount rates inflation rates etc. • testing the design and implementation of controls which management have in place around planned and completed disposal activities;
• obtaining and reviewing management assessment whether there were any indicators of impairment of property plant and equipment as at 31 March 2019;
Further the Company has undertaken review of certain activities and identified certain assets as held for sale and recognised the same at lower of cost or net realizable value. • obtaining the projections used in determination of recoverable amount of property plant and equipment from the management and considered the appropriateness of the growth assumptions applied by comparing the forecast cash flows to those currently being achieved by the CGUs and challenged the management’s assumptions regarding inflation rate discount rate etc;
We identified assessing impairment and assets held for sale as a key audit matter because property plant and equipment are significant to the Company’s total assets and involves significant judgement and estimation in determining the recoverable value. • obtaining the assessment undertaken by the management for review of certain activities and identification of assets held for sale;
• challenging management’s judgement on the classification and valuation of assets held for sale through understanding the status of the sales process and reviewing correspondence from purchasers and prospective purchasers; and
• assessing the adequacy of the disclosures in the financials statements in respect of the property plant and equipment carrying values and assets held for sale.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the state of affairs profit and other comprehensiveincome changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

Auditors' Responsibilities for the Audit of the Financial Statements

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

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

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control 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 forexpressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the''Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

(A) 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) the statement of changes in equity and the statement of cash flows dealt with bythis Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in 'Annexure B".

(B] With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors] Rules 2 014 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 as at 31 March 2019 onits financial position in its financial statements - Refer Note 40 to the financialstatements.

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.

iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified bank notes during the period from 8 November 2016 to 30 December 2016 havenot been made in these financial statements since they do not pertain to the financialyear ended 31 March 2019.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W/W-100022
Shashank Agarwal
Place : Pune Partner
Date : 22 May 2019 Membership No.: 095109

Annexure A referred to in our Independent Auditors' Report to the members of CommercialEngineers and Body Builders Co Limited on the Financial Statements for the year ended 31March 2019

We report that:

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of its fixed assets.

(b) According to the information and explanations given to us the Company has aregular programme of physical verification of its fixed assets by which fixed assets areverified every year. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Asinformed to us the discrepancies noticed on such verification were not material and havebeen properly adjusted in the books of account.

(c) According to the information and explanations given to us and on the basis of ourexamination of the books of account the title deeds of immovable property are held in thename of the Company.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of such verification is reasonable. As informed to us thediscrepancies noticed on verification between the physical stocks and the book recordswere not material and have been properly adjusted in the books of account.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies or other parties covered in theregister maintained under section 189 of the Act. As informed to us there are no firmsand Limited Liability Partnerships covered in the register maintained under section 189 ofthe Act. Accordingly paragraph 3(iii) of the Order is not applicable.

(iv) According to the information and explanations given to us in respect of loans andinvestments made by the Company the provisions of section 185 and 186 of the Act havebeen complied with. As informed to us the Company has not provided any guarantee orsecurity as specified under Section 185 and 186 of the Act.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public. Accordingly paragraph 3(v) of the Order is notapplicable.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under sub-section (1) of Section 148 ofthe Act for any of the goods sold by the Company. Accordingly para 3(vi) of the Order isnot applicable.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Goods and Services Tax ('GST')and other material statutory dues have generally been regularly deposited with theappropriate authorities though have been serious delays in deposit of Provident FundEmployees' State Insurance and Income Tax.

According to the information and explanations given to us no amounts payable inrespect of undisputed statutory dues including provident fund employees' state insuranceincome-tax Goods and Services Tax

Service Tax Sales Tax Duty of excise and Value added tax and other material statutorydues were in arrears as at 31 March 2019 for a period of more than six months from thedate they became payable except as mentioned below:

(INR in Lakhs)

Name of Statute Nature of Dues Amount Period to which the amount relates Due Date Date of Subsequent Payment
Income Tax 2.56 April 2018 7 May 2018 11 April 2019
Tax Act 1961 Deducted at Source 2.56 May 2018 7 June 2018 11 April 2019
11.56 June 2018 7 July 2018 11 April 2019
2.56 July 2018 7 Aug 2018 11 April 2019
2.56 Aug 2018 7 September 2018 11 April 2019

Also refer note 40 wherein it is explained that on account of the uncertainty withrespect to the applicability of the Hon'ble Supreme Court Judgement on the provident fundmatter management has not recognised and deposited any additional provident fund amountin respect to the previous years.

(b) According to the information and explanations given to us there are no dues ofIncome tax Sales tax Service tax Duty of Excise Value Added Tax and Goods and ServicesTax which have not been deposited with the appropriate authorities on account of anydispute except as mentioned below: (INR in Lakhs)

Name of Statute Nature of Dues Forum where dispute is pending Period to which the amount relates

Amount Involved*

Amount Paid under Protest
AC Jabalpur April 2009- June 2009

14.37

-
CEC/JC Jabalpur April 2007-Dec 2015

2468.48

507.60
Central Excise Excise Duty CEC Jamshedpur April 2015- June 2017

1.24

-
Act 1944 CEC Pithampur Oct 2012-Feb 2014

8.94

-
High Court Madhya Pradesh July 2008 - August 2009

2047.00

-
CESTAT New Delhi Sep 2010- Dec 2014

148.85

-
CESTAT Kolkata April 2011-March 2015

195.43

0.53
MP Commercial Tax Act1994 Value Added Tax Appellate Board Bhopal F Y 2007-08

64.41

18.03
Appellate Board Bhopal FY2008-09

63.35

17.78
Supreme Court FY2012-13

1406.50

-
Dy. Commissioner Jabalpur F Y 2013-14

131.44

32.86
Appellate Board Bhopal FY2007-08 11.02 3.09
Central Sales Tax Act1956 Central Sales Tax Appellate Board Bhopal FY2010-11 29.77 28.29
Additional Commissioner Jabalpur FY2012-13 6.11 2.81
Additional Commissioner Jabalpur FY2015-16 8.34 0.84
Jharkhand VAT Value Added Dy. Commissioner of Commercial Taxes Adityapur Circle Jamshedpur April 2011 to March 2012 217.20
Act 2005 Tax Dy. Commissioner of Commercial Taxes Adityapur Circle Jamshedpur April 2012 to March 2013 63.97
Income Tax Income Tax CIT (Appeals) Kanpur A.Y. 2012-13 15.93
Act 1956 CIT (Appeals) Kanpur A.Y. 2011-12 9.96 9.96

* amounts as per demand orders including interest and penalty wherever indicated in thedemand

(yin] According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to its bankers or to any financial institutions except as under:

(INR in Lakhs)

Particulars

Amount of default in repayment

Period of default*
Principal Interest
Dues to Financial Institutions :
Tata Capital Financial Services Limited 2559.60 1351.70 March 2016 - 22 January 2019
Dues to Banks :
HDFC Bank Limited 1847.97 547.13 November 2016 - 22 January 2019
Axis Bank Limited 11501.76 3223.56 November 2016 - 22 January 2019

* The Company has entered a Resolution Plan which contains restructuring of borrowingsas mentioned in note 48 to the financial statements.

The Company did not have any loans or borrowings from government during the year andhas not issued any debentures.

(ix) Based on our examination of books of account and according to the information andexplanations given to us the Company has utilized all the money raised by way of termloans for the purpose for which they were raised. Further the Company has not raisedmoney by way of initial public offer or further public offer (including debt instruments).

(x) Based on our examination of the books of account and according to the informationand explanations given to us no fraud by the Company and no fraud on the Company by itsofficers or employees has been noticed or reported during the course of our audit.

(xi) Based on our examination of the books of account and according to the informationand explanations given to us the Company has paid / provided managerial remuneration inaccordance with the requisite approvals mandated by the provision of section 197 read withSchedule V of the Act.

(xii) According to the information and explanations given to us the Company is not anidhi company. Accordingly paragraph 3(xii) of the Order is not applicable.

(xiii) Based on our examination of the books of account and according to theinformation and explanations given to us all transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and the details have beendisclosed in the financial statements as required by the applicable accounting standards.

(xiv) Based on our examination of the books of account and according to the informationand explanations given to us the Company has made preferential allotment of shares duringthe year which is in compliance with section 42 of the Act the Company has raised INR3453.97 Lakhs out of which INR 1686.84 Lakhs has been utilized for the purpose for whichit was raised and the balance was lying in the bank account as on 31 March 2019. Furtherthe Company has not made any private placement of shares or fully or partly convertibledebentures.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him.Accordingly paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45- IA of the Reserve Bank of India Act 1934.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 101248W/W-100022
Shashank Agarwal
Place : Pune Partner
Date : 22 May 2019 Membership No.: 095109

Annexure 'B' to the Independent Auditors' report on the financial statements ofCommercial Engineers and Body Builders Co Limited for the year ended 31 March 2019.

Report on the internal financial controls with reference to the aforesaid financialstatements under Clause (i) of Subsection 3 of Section 143 of the Companies Act 2013

(Referred to in paragraph 1(A)(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to financial statementsof Commercial Engineers and Body Builders Co Limited ("the Company") as of 31March 2019 in conjunction with our audit of the financial statements of the Company forthe year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2019 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. 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 (hereinafter referred to as"the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements 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 Company's internal financial controls withreference to financial statements.

Meaning of Internal Financial controls with Reference to Financial Statements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial controls with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 101248W/W-100022
Shashank Agarwal
Place : Pune Partner
Date : 22 May 2019 Membership No.: 095109