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Elecon Engineering Company Ltd.

BSE: 505700 Sector: Engineering
NSE: ELECON ISIN Code: INE205B01023
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OPEN 33.25
PREVIOUS CLOSE 33.10
VOLUME 1484
52-Week high 69.50
52-Week low 24.95
P/E 29.29
Mkt Cap.(Rs cr) 368
Buy Price 32.20
Buy Qty 1.00
Sell Price 33.25
Sell Qty 100.00
OPEN 33.25
CLOSE 33.10
VOLUME 1484
52-Week high 69.50
52-Week low 24.95
P/E 29.29
Mkt Cap.(Rs cr) 368
Buy Price 32.20
Buy Qty 1.00
Sell Price 33.25
Sell Qty 100.00

Elecon Engineering Company Ltd. (ELECON) - Auditors Report

Company auditors report

To

The Members of

ELECON ENGINEERING COMPANY LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Elecon Engineering CompanyLimited ("the Company") which comprise of the standalone balance sheet as at 31March 2019 the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone 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 31 March 2019 and profit and othercomprehensive income changes in equity and its cash flows for the year ended on thatdate.

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 Auditors' Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other 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 a basis for our opinion.

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.

Description of Key Audit Matters

Revenue Recognition – Customer contracts

With respect to accounting policies applied please refer to Note 2 to the standalonefinancial statements.

The key audit matter How the matter was addressed in our audit
Our audit approach
A portion of the revenues of the Company relates to long- term construction contracts and is recognised according to the progress of the individual projects in accordance with Ind AS 115 Revenue from Contracts with Customers generally based on the extent of progress towards completion. We assessed the procedure for estimating total contract costs the method for determining progress of contract as well as the design and implementation of controls to ensure proper planning and management assessments.
The determination of the progress of the contract based on percentage of completion requires to a large extent estimates and judgements which are based among other factors on continually revised planning and other management assessments. These assessments include in particular the scope of deliveries and services required to fulfill contractually defined obligations total estimated contract costs remaining costs to completion and total estimated contract revenues as well as contract risks. Revenue from such contracts aggregates Rs. 30830.97 Lakhs for the year ended 31 March 2019 (Rs. 22118.62 Lakhs for the year ended 31 March 2018) We performed the following audit procedures for a sample of long-term construction contracts specifically selected on the basis of risk:
interviewing management on estimates of the total contract costs risks involved and status of the projects;
assessing reasonableness of the significant estimates and judgements that the management has made in connection with long-term customer contracts. Our focus among others was on the assessment of the underlying current cost reports of the customer contracts the posting logic and on the estimates of those responsible for the projects;
assessing computational accuracy of the stage of completion determined as well as any losses anticipated and also the proper accounting treatment of construction contracts.
evaluation appropriateness of the disclosures in the standalone financial statements..

With respect to accounting policies applied please refer to Note 2 to the standalonefinancial statements.

The key audit matter How the matter was addressed in our audit
Trade receivables (including retention monies) aggregate to Rs. 54669.81 Lakhs are reported in the standalone financial statements of the Company as at 31 March 2019. Our audit approach We evaluated the process for monitoring past due trade receivables (including retention monies) as well as the design and implementation of control around recognition of impairment losses.
The decision as to whether trade receivables are impaired due to anticipated collectability requires judgment and depends on a number of assumptions regarding the ability and willingness of the customers to pay.
Indicators of non-collectibility that are considered are: past due receivables financial and economic difficulties of customers and also any performance issues relating to the product or service supplied by the Company. The risk for the standalone financial statements is that the impairment of trade receivables (including retention monies) from third parties is either recognized too late or not in the amount necessary. We critically reviewed the impairment of a selection of past due receivables selected on the basis of risk ageing and volume. For this purpose we analysed ageing of receivables and impairment losses over the course of the year compared them to historical experience with the debtors concerned and interviewed the responsible Elecon management and staff regarding credit worthiness of the customers.
We also evaluated Elecon management's assessment of credit loss rate as per expected credit loss model (ECL) as prescribed in Ind AS 109 Financial Instruments for each segment of customers based on the experience of actual credit losses over past year adjusted to reflect current economic conditions over the expected life of their receivables and the related disclosures in the standalone financial statements.

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 standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Standalone 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 standalone financialstatements that give a true and fair view of the state of affairs profit and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone 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 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 auditors' 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 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 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 Act we are also responsible for expressing 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 auditors' 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 ourauditors' 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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under 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 othermatters to be included in the Auditors' Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording 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 standalone financial statements - Refer Note 40 to thestandalone financial statements;

ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Note 22 to the standalone financial statements; and

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

C) With respect to the matter to be included in Auditors' Report under Section 197(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
Firm's Registration No: 101248W/W-100022
Nirav Patel
Place : Vallabh Vidyanagar Partner
Date : May 7 2019 Membership No: 113327

ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORTON STANDALONE FINANCIAL STATEMENTS– YEAR ENDED 31ST MARCH 2019

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

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment and investmentproperties.

(b) The Company has a programme of physical verification of its property plant andequipment and investment properties by which all the items are verified in a phased mannerover a period of three years. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets.Accordingly part of the property plant and equipment were physically verified by themanagement in the current year and no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded in property plant and equipment as disclosed in the standalone financialstatements are held in the name of the Company.

(ii) The inventory except goods in transit has been physically verified by themanagement during the year. In our opinion the frequency of such verification isreasonable. The discrepancies noticed on verification between the physical stocks and thebook records were not material and have been dealt with in books of account.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register maintained under Section 189 of the Act. Accordingly paragraph 3(iii) of theOrder is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has not given any loans or provided any guarantees or security to the partiescovered under Section 185 of the Act. Accordingly compliance under Section 185 of the Actis not applicable to the Company. According to the information and explanations given tous the Company has complied with the provisions of Section 186 of the Act in respect ofthe loans given and investment made.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia and the provisions of Sections 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. Accordingly paragraph 3 (v) of the Order is notapplicable to the Company.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the rules prescribed by the Central Government for the maintenance of cost recordsunder Section 148(1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

(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 Provident fund Employees' StateInsurance Income-tax Customs Duty Goods and Service Tax and other material statutorydues as applicable to the Company have been generally regularly deposited during the yearby the Company with the appropriate authorities except in case of Goods and Services Taxwhere there are have been few delays. The Company is not having any dues in respect ofCess.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income Tax Sales TaxService Tax Wealth Tax Excise Duty Customs Duty Value Added Tax Goods and ServicesTax and other material statutory dues were in arrears as at 31 March 2019 for a period ofmore than six months from the date they became payable except in the case of interest ondelayed payments of Goods and Services Tax aggregating to INR 56.11 Lakhs which areoutstanding for more than six months. In respect of Provident Fund as explained in Note40 to the standalone financial statements pending clarity on the matter the Company iscurrently unable to determine the extent of arrears of such Provident Fund outstanding asat 31 March 2019 for a period of more than six months from the date they become payableand hence we are unable to comment on such Provident Fund arrears if any.

Name of Statute Nature of Dues Amount Period to which amount relates Due Date Date of Payment Remarks
(Rs in lakhs)
Goods and Services Tax Interest on late payment 8.51 March 2018 20 April 2018 - Not yet paid
Goods and Services Tax Interest on late payment 0.36 April 2018 20 May 2018 - Not yet paid
Goods and Services Tax Interest on late payment 10.46 May 2018 20 June 2018 - Not yet paid
Goods and Services Tax Interest on late payment 36.22 June 2018 20 July 2018 - Not yet paid
Goods and Services Tax Interest on late payment 0.56 July 2018 20 August 2018 - Not yet paid

(b) According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Service Tax Customs Duty Excise Duty Value Added Tax and Goodsand Services Tax as at 31 March 2019 which have not been deposited with the appropriateauthorities on account of any dispute other than those mentioned in the Appendix I tothis report.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans and borrowings to the banks andfinancial institutions and dues to debenture holders during the year. The Company did nothave any outstanding loans and borrowings to Government during the year.

(ix) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments) during the year.In our opinion and according to the information and explanations given to us the termloans taken by the Company have been applied for the purpose for which they are raised.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theCompany's management.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid / accrued for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

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

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required byapplicable accounting standards. (xiv) According to the information and explanations givento us and based on our examination of the records of the Company the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3 (xiv) of the Order is not applicableto the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions within the meaning of section 192 of the Act with directors or personsconnected with them. Accordingly paragraph 3 (xv) of the Order is not applicable to theCompany.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Nirav Patel
Place : Vallabh Vidyanagar Partner
Date : May 7 2019 Membership No: 113327

 

Appendix – I
Name of Statute Nature of Dues Amount Period to which amount related Forum where the Dispute is pending
Rs. ( in Lakhs)*
1 Finance Act 1944 Service tax including penalty 6655.85 2003 to 2018 CESTAT
Ahmedabad
2 Finance Act 1944 Service tax including penalty 448.29 2007 to 2010 20012 to 2015 Central Excise Commissioner (Appeal) Vadodara
3 Central Excise Act 1944 Excise duty including penalty 32.47 2011-12 to 2012-2013 Central Excise Commissioner (Appeal) Vadodara
4 Central Sales Tax Act 1956 and Value added tax of various States. Sales Tax / Work Contract Tax 45.24 2013-14 Joint Commissioner of Commercial Tax (Appeal) Vadodara
5 Central Sales Tax Act 1956 and Value added tax of various States. Sales Tax / Work Contract Tax 233.39 1991-92 to 1995-96 Odisha High Court
6 Central Sales Tax Act 1956 and Value added tax of various States. Sales Tax / Work Contract Tax 191.60 2006-07 2009-10 Dy. Commissioner of Commercial Tax Maharashtra
7 Central Sales Tax Act 1956 and Value added tax of various States. Sales Tax / Work Contract Tax 640.18 2009-2015 Commissioner Of Commercial Tax West Bengal
8 Central Sales Tax Act 1956 and Value added tax of various States. Sales Tax / Work Contract Tax 0.21 2014-15 Commissioner (Appeals) of Commercial tax UP
9 Income Tax Act 1961 Tax including interest - AY 2007-08 and 2012-13 ITAT
10 Income Tax Act 1961 Tax including Interest 2378.89 AY 2009-10 2013- 14 to 2016-17 CIT (Appeals) Vadodara

* INR 901.85 Lakhs have been deposited under protest.

ANNEXURE-B TO THE INDEPENDENT AUDITORS' REPORTON STANDALONE FINANCIAL STATEMENTS –YEAR ENDED 31 MARCH 2019

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (Referred to in paragraph 1(A) (f) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date) Opinion

We have audited the internal financial controls with reference to standalone financialstatements of Elecon Engineering Company Limited ("the Company") as of 31 March2019 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as at 31 March 2019 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India ("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 standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act")

Auditors' Responsibility

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 and the Standards on Auditingspecified under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of such internalfinancial controls 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 withreference to standalone financial statements.

Meaning of Internal Financial Controls with reference to Standalone FinancialStatements

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to standalone financial statements include thosepolicies 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 standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance 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 standalone financial statements.

Inherent Limitations of Internal Financial Controls with reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Nirav Patel
Place : Vallabh Vidyanagar Partner
Date : May 7 2019 Membership No: 113327