To the Members of Spice Mobility Limited
Report on the Audit of the standalone Financial statements
We have audited the accompanying standalone financial statements of Spice MobilityLimited ("the Company") which comprise the Balance Sheet as at March 31 2019the Statement of Profit and Loss (including the Statement of Other Comprehensive Income)Statement of Change in Equity the Cash Flow Statement for the year then ended and notesto the financial statements including a summary of significant accounting policies andother explanatory information (hereinafter referred to as "the standalone financialstatements ").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2019 its Profit the changes inequity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the standalone financial statements' section of ourreport. We are independent of the Company in accordance with the Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the Auditor's responsibilities forthe audit of the financial statements section of our report including in relation tothese matters. Accordingly our audit included the performance of procedures designed torespond to our assessment of the risks of material misstatement of the standalonefinancial statements. The results of our audit procedures including the proceduresperformed to address the matters below provide the basis for our audit opinion on theaccompanying standalone financial statements.
|Key Audit Matter ||Auditor's Response |
|1. Revenue Recognition ||How our audit addressed the key audit matter: |
|For the financial year ended 31 March 2019 the Company has recorded revenue of Rs. 15663.95 Lakhs. The accounting policies for revenue recognition are set out in Note 2 (d) and the different revenue streams of the Company have been disclosed in Note 22 to the standalone financial statements. The application of the new revenue accounting standard (Ind AS 115 "Revenue from Contracts with Customers") involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. ||We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. |
| ||Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: |
| ||- Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. |
| ||- Selected samples of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation reperformance and inspection of evidence in respect of operation of these controls. |
| ||- Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard. |
| ||- Selected samples of continuing and new contracts and performed the following procedures: |
| ||-Read analyzed and identified the distinct performance obligations in these contracts. |
| ||- Compared these performance obligations with that identified and recorded by the Company. |
| ||- Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration. |
|Revenue recognition is susceptible to the higher risk that the revenue is recognized when performance obligation has not been completed. ||- Samples in respect of revenue recorded for time and material contracts were tested using a combination of approved time sheets including customer acceptances subsequent invoicing and historical trend of collections and disputes. |
|This was an area of focus for our audit and the area where significant audit effort was directed. ||- Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts. |
| ||- In respect of samples relating to fixed-price contracts progress towards satisfaction of performance obligation used to compute recorded revenue was verified with actual and estimated efforts from the time recording and budgeting systems. We also tested the access and change management controls relating to these systems. |
| ||- Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts. |
| ||- Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings. |
| ||We reviewed the collation of information and the logic of the report generated from the budgeting system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. |
| ||Our Observation: |
| ||We found the Company's revenue recognition to be consistent with its accounting policy as disclosed in Note 2 (d) to the standalone financial statements. We are satisfied that the Company's revenue has been appropriately recognized and disclosure in the relevant accounting period. |
|2 Income and Deferred Taxes ||How our audit addressed the key audit matter: |
|The company has carried current tax assets of Rs. 3372.96 Lakhs and deferred tax assets of Rs. 1238.46 Lakhs as at March 31 2019. The accounting policies for current and deferred tax recognition are set out in Note 2 (E) and the breakup of deferred tax have been disclosed in Note 15 to the standalone financial statements. Also refer note no. 33 and 36 (C) of standalone financial statements. There is significant judgement involved in accounting for taxes particularly given jurisdiction in which the Company operates and exposures to income tax laws in India. This gives rise to complexity and uncertainty in respect of the calculation of income taxes deferred tax positions. Due to significance to the standalone financial statements as a whole combined with the judgement and estimation required to determine their values the evaluation of current tax and deferred tax assets is considered to be a key audit matter. ||We assessed the adequate implementation of the policies and controls regarding current and deferred tax. We evaluated the design and implementation of controls in respect of provisions for current tax and the recognition and recoverability of deferred tax assets. We examined the procedures in place for the current and deferred tax calculations for completeness and valuation and audited the related tax computations and estimates in the light of our knowledge of the tax circumstances. We performed an assessment of the major items impacting the Company's tax expense balances and exposures. |
| ||Our Observations: |
| ||We analyzed tax provisions. In respect of deferred tax assets we assessed the appropriateness of management's assumptions and estimates including the likelihood of generating sufficient future taxable income to support deferred tax assets on tax losses carried forward which shall be available for utilization in future. We found that tax provision and deferred tax assets are appropriately recognized and disclosed in the standalone financial statement. |
|3 Valuation of trade receivables ||How our audit addressed the key audit matter: |
|We refer to Note 10 and Note 2 (Q) to the standalone financial statements. ||We obtained an understanding of the Company's credit policy for trade receivables process of approvals and terms and conditions and evaluated the process for identifying impairment indicators. We have reviewed and tested the ageing of trade receivables and management's assessment on the credit worthiness of selected customers for trade receivables. We further discussed with the key management on the adequacy of the allowance for credit losses recorded by the Company and reviewed the supporting documents provided by management in relation to their assessment. We have also reviewed adequacy and appropriateness of allowance for credit impairment based on available information. |
|As disclosed in Notes to the standalone financial statements the Company assesses periodically and at each reporting date the expected credit loss associated with its receivables. When there is expected credit impairment the amount and timing of future cash flows are estimated based on historical current and forward-looking loss experience for assets with similar credit risk characteristics. || |
| ||Our Observation: |
|The carrying amount of trade receivables of the company was Rs. 6767.77 Lakhs as at March 31 2019. We focused on this area because of its significance and the degree of judgement required to estimate the expected credit loss and determining the carrying amount of trade receivables as at the reporting date. ||Based on our audit procedures performed we found management's assessment of the recoverability of trade receivables to be reasonable and the disclosures to be appropriate. |
|4. Business Combination ||How our audit addressed the key audit matter: |
|The company has merged DTS business of Spice Digital Limited (subsidiary company) - and Spice IOT Solutions Limited (subsidiary company) and Mobisoc Technology Private Limited (step down subsidiary company) and - Spice Labs Private Limited (step down subsidiary company). The amalgamation being a common control transaction has been accounted for under the pooling of interest' method as prescribed by the Ind AS 103 (Business Combinations). Accordingly the Scheme of Arrangement has been given with effect from appointed date April 01 2017. ||We assessed implementation of Scheme of Arrangement and compliance thereof for which we have performed the following procedure: |
| ||- Completed a walkthrough of the merger process and obtained understanding of the transaction by reading the Scheme of Arrangement; |
| ||- Review the accounting of business combination under Ind-AS 103. |
| ||- Reviewed the disclosures in the financial statements. |
| ||-Tested the arithmetic accuracy of management's calculations for the giving effect of the scheme in standalone financial statements. |
| ||-Tested the adjustment given in the reserves and surplus for net assets acquired. |
| ||Our observation: |
| ||Based on our audit procedures performed we found management's assessment accounting treatment and disclosure of merger are reasonable and appropriate |
|It is considered to be key audit matter as this is significant event which has happened during the year and it required compliance of scheme and applicable Ind AS. Refer Note 39 to the Standalone Financial Statements. || |
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone financial statements and our auditor's report thereon. We have obtained allother information prior to the date of this auditors' report. Our opinion on thestandalone financial statements does not cover the other information and we do not expressany form of assurance conclusion thereon. In connection with our audit of the standalonefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information; we are required to report that fact. Wehave nothing to report in this regard.
Responsibilities of Management for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards (AS) specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the 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 financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone 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 also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the standalone Financial statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We a lso:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsfor the financial year ended March 31 2019 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would 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 sub-section (11) of section 143 ofthe Act we give in the "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;
(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 Statement of change in equityand the Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount;
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2015;
(e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone financial statements and theoperating effectiveness of such controls refer to our separate Report in "AnnexureB" to this report;
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us nomanagerial remuneration was paid by the Company to its directors during the year.Therefore the relevant provisions of section 197 of the Act is not applicable to theCompany.
(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements Refer Note 36 (C) to the standalonefinancial statements;
ii. The Company has provided material foreseeable losses in long-term contracts whereapplicable. The Company has no outstanding derivative contracts at the yearend;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
Annexure A referred to in paragraph 1 of our report of even date on the other legal andregulatory requirements (Re: spice Mobility Limited)
(i) a. The Company has maintained proper records showing full Particulars includingquantitative details and situation of Property Plant & Equipment.
b. The Company has a regular programme of physical verification of its property plantand equipment by which all its property plant and equipment are verified every yearwhich in our opinion is reasonable having regard to the size of the Company and natureits property plant and equipment. In accordance with this programme property plant& equipment were physically verified during the year. No material discrepancies werenoticed on such verification.
c. According to the information and explanations given to us the title deed ofimmovable properties included in Property Plant and Equipment are held in the name of theCompany However Land & Building having carrying value of Rs. 305.04 Lakhs andBuilding having carrying value of Rs. 548.06 Lakhs as on March 31 2019 acquired pursuantthe Scheme of Arrangement is yet to be transferred in the name of the Company (refer noteno. 39 of standalone financial statements).
(ii) The Company was not holding any inventory as on March 31 2019. Thereforeprovisions of clause 3(v) of the Order are not applicable to the Company.
(iii) The Company has not granted any loan during the year to companies covered in theregister maintained under Section 189 of the Companies Act 2013. However the company hasacquired pursuant Scheme of Arrangement loans granted by amalgamating companies and byDTS business of Spice Digital Limited to the companies covered in Register 189 of theCompanies Act 2013 which were repayable on demand however it was informed to us that nodemand for repayment was made during the year. These loans were considered doubtful forrecovery and accordingly provided in earlier years. The Company has not granted any loanto Firms Limited Liability Partnership or any other parties covered in the registermaintained under section 189 of the Companies Act 2013.
(iv) The Company has made investment in its subsidiary during the year which is incompliance with provisions of Section 186 of the Companies Act 2013. According toinformation and explanations given by the management there is no loan granted orguarantee or security provided under section 185 and 186 of the Companies Act 2013 duringthe year.
(v) The Company has not accepted any deposit covered under sections 73 to 76 of theCompanies Act 2013 during the year. Therefore provisions of clause 3(v) of the Order arenot applicable to the Company.
(vi) The maintenance of cost records has not been prescribed by the Central Governmentunder the section 148 (1)of the Act read with Companies (Cost Records and Audit) Rules2014 for the goods/product manufactured by the Company. Therefore provisions of clause3(vi) of the Order are not applicable to the Company.
(vii) a. According to the records of the Company the Company is generally regular indepositing undisputed statutory dues including provident fund employees' state insuranceincome-tax goods and service tax sales tax service tax duty of customs duty ofexcise value added tax cess and other material statutory dues deducted/ accrued in thebooks with the appropriate authorities. There were no undisputed outstanding statutorydues as at the yearend for a period of more than six months from the date they becamepayable.
b. According to the records of the Company there are no dues outstanding of incometax sales tax service tax duty of customs duty of excise and value added tax onaccount of any dispute other than the followings:
|Name of the statute ||Nature of dues ||Amount (Rs. in Lakhs)* ||Period to which the amount relates (FinancialYear) ||Forum where dispute is pending |
|Central Excise Law ||Excise Duty ||642.63 ||1990-91 to 1993-94 ||CESTAT |
|Income Tax Act 1961 ||Income Tax ||326.69 ||2010-11 to 2012-13 ||ITAT# |
|Income Tax Act 1961 ||Income Tax ||2.13 ||2011-12 to 2014-15 ||ITAT |
|Income Tax Act 1961 ||Income Tax ||96.38 ||2009-10 to 2010-11 ||ITAT |
|Finance Act 1994 ||Service Tax ||1207.95 ||Year 2004 to 2008 ||Supreme Court |
|Finance Act 1994 ||Service Tax ||202.77 ||April 2008 to March 2009 ||Appellate Tribunal Chandigarh |
*Amount as per demand orders including interest and penalty less amount deposited.
# Matters remanded back to ITAT pertaining to A.Y. 2011-12 of Rs. 685.42 Lakhs is notincluded above.
(viii) The Company has not defaulted in repayment of dues to bank. The Company did nothave any borrowing from Government and Financial Institution and dues to debentureholders.
(ix) During the year the Company did not raise any money by way of initial publicoffer or further public offer (including debt instruments). Further in our opinion andexplanations given to us term loans raised during the year were applied for the purposefor which loans were raised.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the standalone financial statements and according to the information andexplanations given to us no fraud by the Company or no fraud on the Company by itsofficers and employees has been noticed or reported during the year. (xi) According to theinformation and explanations given by the management the Company has not paid anymanagerial remuneration covered under section 197 read with Schedule V of the CompaniesAct 2013 during the year. Therefore provisions of clause 3(xi) of the Order are notapplicable to the Company.
(xii) According to the information and explanations given to us the Company is not aNidhi company. Therefore provisions of clause 3(xii) of the Order are not applicable tothe Company.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with section 177 and Section 188 of the Companies Act 2013 where applicableand details of such transactions have been disclosed in the standalone financialstatements as required by the applicable accounting standards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Therefore the provisions of clause 3(xiv) of the Order are not applicable.
(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 them.Accordingly the provisions of clause 3(xv) of the Order is not applicable. (xvi)According to the information and explanations given to us the Company is not required tobe registered under section 45-IA of the Reserve Bank of India Act 1934.
Report on the internal Financial controls under clause (i) of sub - section 3 ofsection 143 of the companies Act 2013 ("the Act")
We have audited the internal financial controls with reference to standalone financialstatements of Spice Mobility Limited (the Company") as of March 31 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear ended 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 the financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to as audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those standards and the Guidance Note requirethat we comply with ethical requirements of and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects. Our audit involves performing procedures to obtainaudit evidence about the adequacy of the internal financial controls system with referenceto standalone financial statements and their operating effectiveness. Our audit ofinternal financial controls with reference to standalone financial statements includedobtaining an understanding of internal financial controls with reference to standalonefinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the standalone financial statementswhether 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 systemwith reference to standalone financial statements.
Meaning of internal Financial controls over Financial Reporting
A Company's internal financial control over financial reporting with reference to thesefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial control over financial reporting with reference to these financialstatements 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 authorization ofmanagement 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 with reference to financial statements including the possibility of collusionor improper management override of controls material misstatements due to error or fraudmay occur and not be detected. Also projections of any evaluation of the internalfinancial controls over financial reporting with reference to financial statements tofuture periods are subject to the risk that the internal financial controls over financialreporting with reference to financial statements may become inadequate because of changesin conditions or that the degree of compliance with the policies or procedures maydeteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at March 31 2019 based on the internal control over thefinancial reporting criteria established by the company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
| ||For singhi & co. |
| ||Chartered Accountants |
| ||Firm Reg. No. 302049E |
| ||B. K. sipani |
|Place: Noida (Delhi-NCR) ||Partner |
|Date: May 21 2019 ||Membership No. 088926 |