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Garden Silk Mills Ltd.

BSE: 500155 Sector: Industrials
NSE: GARDENSILK ISIN Code: INE526A01016
BSE 15:42 | 23 Oct 11.85 -0.56
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NSE 15:40 | 23 Oct 11.85 -0.55
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OPEN 12.10
PREVIOUS CLOSE 12.41
VOLUME 4565
52-Week high 27.20
52-Week low 8.51
P/E
Mkt Cap.(Rs cr) 50
Buy Price 11.72
Buy Qty 100.00
Sell Price 11.94
Sell Qty 100.00
OPEN 12.10
CLOSE 12.41
VOLUME 4565
52-Week high 27.20
52-Week low 8.51
P/E
Mkt Cap.(Rs cr) 50
Buy Price 11.72
Buy Qty 100.00
Sell Price 11.94
Sell Qty 100.00

Garden Silk Mills Ltd. (GARDENSILK) - Auditors Report

Company auditors report

To the members of Garden Silk Mills Limited

Report on the audit of the standalone financial statements

Qualified Opinion

We have audited the accompanying standalone financial statements of Garden SilkMills Limited (hereinafter referred as "the Company") which comprise thebalance sheet as at 31st March 2019 the statement of profit and loss (including othercomprehensive income) the cash flow statement andthe statement of changes in equity forthe year then ended and notes to the standalone financial statements includinga summaryof significant accountingpolicies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to usexcept for the possible effects of the matter described in the Basis forQualified Opinion section of our report the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 (hereinafter referred as"the Act") in the manner so required and give a true and fair view in conformitywith the Indian Accounting Standards prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended(hereinafter referred as"Ind AS") and other accounting principles generally accepted in India of thestate of affairs (financial position) of the Company as at 31st March 2019 and itsprofit/(loss) (financial performance including other comprehensive income) its cash flowsand the changes in equity for the year ended on that date.

Basis for qualified opinion

As at 31st March 2019 the Company's financial statements mention total borrowingsincluding interest accrued of ' 171691 Lakhs from various banks and other lenders.We have obtained/verified direct bank confirmations/ bank statements/reconciliationstatements and other relevant available information and observed that balances as percompany's books and with respective bank records are subject to reconciliation. Accordingto information and explanation provided to us with respect to outstanding principalamounts interest calculations including overdue and penal interest appropriation ofamounts paid towards these outstanding balances between interest and principal loanrepayments etc. as provided by lenders and as available with the Company is inadequateand hence pending reconciliation. In light of the above we are unable to quantify theconsequential impact on Company's total borrowings as at 31st March 2019 and impact ofinterest and other changes accrued on the statement of profit and loss for the year endedas on that date. (Refer note no. 12(a)(e))

We conducted our audit in accordance with the Standards on Auditing (hereinafterreferred as "SAs") 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 bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics.

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

Material Uncertainty Related to Going Concern

We draw attention to note no. 12(a) d) & e) to the financial statements. TheCompany's net-worth is negative as at the year-end mainly due to accumulated losses andcontinues to have significant pressure on its financial resources. An application is madeby one of its lenders to the National Company Law Tribunal (NCLT) Ahmedabad Bench seekingaction under Insolvency and Bankruptcy Code 2016. These events or conditions indicatethat a material uncertainty exists that may cast significant doubt on the Company'sability to continue as a going concern.

Our opinion is not modified in respect of this matter.

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 taken as a whole in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the key audit matters as describedbelow:

A. Accounting treatment for customer contracts

B. Contingent liabilities

A. Accounting treatment for customer contracts

Description of key audit matter

Revenue amounting to ' 348027Lakhs reported in the company's financial statementspertains to customer specific contracts and the same are required to satisfy therecognition and measurement criteria as prescribed in IND AS 115 'Revenue from Contractswith Customers'. Revenue recognition is considered as an inherent risk and also as a fraudrisk. In case of revenue recognition risk of material mis-statement significantlyincreases for its cut-offs accuracy completeness and presentation and disclosure. Thiscan lead to revenue either being recognised in incorrect accounting periods or atincorrect value thereby impacting the results. Considering these factors in the contextof our audit this matter was of significance and hence a key audit matter.

Description of Auditor's response

With a view to verify the reasonableness of the revenue accounting we carried outfollowing procedures:

a) Understanding the internal control environment for revenue recognition and to testcheck with a view to verify its operating effectiveness;

b) Read terms of the contracts and verified accuracy of sales recognition on testbasis;

c) Discussed with the management process of identification of variable considerationif any;

d) Verified cut-off documents to ensure that revenue is recognized in correctaccounting period and carried out other substantive procedures;

e) Performed analytical procedures and obtained reasons for major variances;

f) Ensured that revenue is recognized in accordance with accounting policy of theCompany and Ind AS 115 and necessary disclosures are made in the financial statements;

B. Contingent liabilities

Description of key audit matter

Contingent liabilities as at 31 March 2019 amounted to ' 13025 Lakhs which mainlyinclude pending income-tax matters indirect-tax matters etc. Contentious direct/ indirecttax matters relate to interpretational differences between the company and various taxauthorities certain matters subjected to internal circulars and guidelines within taxauthorities irrespective of stated legal provisions sometimes requiring decision makingonly by higher tax authorities through appellate procedures resulting in delays inoutcome. These multiple litigations by and on the Company which are currently pending atvarious levels and courts requiring the company's management to exercise significantjudgement on these outcomes to determine the liabilities that are contingent in nature.Considering these factors in the context of our audit this matter was of significanceand hence a key audit matter.

Description of Auditor's response

With a view to ensure that disclosures made by the company in note no. 28 aredetermined appropriately and prudently we obtained information of pending income-tax andindirect-tax matters from the Company and have obtained/verified the documents includingthe communication with the departments provided by the Company. In addition we havecarried out comparison with respect to previous year and obtained/reviewed documentationfor additional direct/ indirect tax matters reported if any including matters arisenduring the year. Our tax team has carried out discussions with the Company's internal taxteam on these cases mainly with respect to issues raised by various tax authorities intheir communication to the company to substantiate company's assessment that there are nopresent obligations perceived.

Information other than the standalone financial statements and auditor's report thereon(hereinafter referred as "other information")

The Company's Management and Board of Directors are responsible for the preparation ofthe other information. The other information comprises the Board's report and managementdiscussion and analysis included in theannual report but does not include the standalonefinancial statements and our auditor's report thereon.

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 identified above and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our 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 and Those Charged with Governance for the standalonefinancial 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 financial position financialperformance cashflows andchanges in equity of the Company in accordance with theaccounting principles generally accepted inIndia including the Ind AS.This responsibilityalso includes maintenance of adequate accounting records in accordance with theprovisionsof the Act for safeguarding of the assets of the Company and for preventing anddetectingfraudsand other irregularities; selection and application of appropriateaccounting policies; making judgments andestimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internalfinancial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalonefinancialstatements that give a true and fair view and are free from materialmisstatement whether due to fraud orerror.

In preparing the standalone financial statements Company's Management and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.

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

Auditor's responsibilities for the audit of the standalone 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 in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

A. Identify and assess the risks of material misstatement of the standalone 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.

B. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls

C. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

D. Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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. [Refer above para "Material Uncertainty Related toGoing Concern"]

E. Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

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 statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's 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 (Auditor's Report) Order 2016 ("the Order")issued bythe centralgovernment of India in terms of sub-section (11) of section 143 of theAct wegive in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143 (3) of the Act and based on our audit we report that:

a) We have sought and obtained all the information and explanations which to the bestof ourknowledge 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 asit appears from our examination of those books;

c) The balance sheet the statement of profit and loss (including other comprehensiveincome) statement of changes in equity and the statement of cash flows dealt with by thisreport are in agreement with the books of account;

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act read with rule 7 of the Companies (Accounts)Rules 2014;

e) On the basis of the written representations received from the directors as on31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st 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 over financialreporting of theCompany and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting;

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 we report thatin our opinion and to the best of our information and according to the explanations givento us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act; and

h) With respect to the other matters to be included in the auditor's report inaccordance with rule11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 31st March 2019on its financial position in its standalone financial statements - refer note 28 to thestandalone financial statements.

ii. The Company has made provision as required under the applicable law or Ind AS formaterial foreseeable loses if any on long term contracts including derivative contracts.

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

For Sharp & Tannan Associates
Chartered Accountants
Firm's Registration No.: 109983W
Tirtharaj Khot
Partner
Mumbai 30 May 2019 Membership No.: (F) 037457

Annexure A to the Independent Auditor's Report

(Referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report on even date)

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets (i.e. property plant and equipment andother intangible assets of the Company).

(b) The fixed assets are being physically verified by the management at regularintervals based on the programme of verification which in our opinion is reasonable. Nomaterial discrepancies were identified during such physical verification conducted by theCompany during the year.

(c) According to information and explanation given to us and the records examined by usand based on the examination of the Photocopies/scanned copies of the title deeds of allthe immovable properties deposited with the bankers we report that the title deeds of allthe immovable properties that have been pledged as security against borrowings and otherfacility availed by the company are held in the name of the Company.

(ii) Physical verification of inventory has been conducted at reasonable intervals bythe management. Discrepancies noticed on physical verification were not material and thesame have been properly dealt with in the books of account.

(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Accordingly reporting on paragraph 3(iii) of the Order is notapplicable.

(iv) According to information and explanation provided to us the Company has compliedwithprovisions of section 185 and section 186 of the Act to the extent applicable.

(v) According to information and explanation provided to us the Company has notaccepted deposits hence the directives issued by the Reserve Bank of India and theprovisions of Sections 73 to 76 of the Act and the rules framed there under are notapplicable to it. According to information and explanation provided to us no order hasbeen passed by Company Law Board or National Company Law Tribunal or Reserve Bank of Indiaor any court or any other tribunal in the current year. Accordingly reporting on para3(v) is not applicable.

(vi) The Central Government has specified maintenance of cost records under section148(1) of the Act. We have broadly reviewed theserecords relating to materials labour andother items of cost maintained by the Company and are of the opinion that prima facie;the prescribed accounts and records have been made and maintained. We have not howevermade a detailed examination of records with a view to determine whether they are accurateand complete.

(vii (a) The Company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income-tax goods and service taxsales-tax service tax duty of customs duty of excise value added tax cess and anyother statutory dues as applicable with the appropriate authorities. According to theinformation and explanation provided to us no undisputed amounts payable in respect ofstatutory dues were in arrears as at 31st March 2019 for a period of more than sixmonths from the date they became payable.

(b) According to the information and explanation provided to us dues of income taxsales tax service tax duty of customs duty of excise value added tax or cess whichhave not been deposited on account of dispute are as follows:

Name of Statute Nature of dues Forum where Dispute is Pending Period to which amount Relates Amount Involved (' in Lakhs) Amount Unpaid (' in Lakhs)
Mumbai high Court 1994-95 35.00 25.00
Gujarat High Court (Ahmedabad) 2008-09 2610.00 1960.00
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2012-13 101.61 101.61
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2011-12 40.55 40.55
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2009-10 3.00 3.00
Gujarat High Court (Ahmedabad) 2000-01 336.17 0.00
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2012-16 505.80 486.83
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2008-13 77.75 74.84
Central Excise Act 1944 Excise Duty / Service Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2010-14 37.40 36.00
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2011-16 27.12 25.76
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2012-16 160.51 154.49
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2011-16 398.14 378.23
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2012-16 286.16 275.43
Gujarat High Court (Ahmedabad) 1994-95 4293.11 4293.11
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2014-17 34.35 33.05
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2017-18 245.00 0.00
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2012-13 126.93 0.00
Customs Act 1962 Customs Duty Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2012-13 36.43 33.26
Customs Excise and Service Tax Appellate Tribunal (Ahmedabad) 2012-13 33.84 29.34
Total 9388.87 7950.50

(viii) Based on our audit procedures and according to the information and explanationprovided to us the Company has defaulted in repayment of dues to financial institutionand bank details of which are mentioned below. The Company does not have any debentureholders and has not borrowed from government.

Category of the Lender Name of the Lender

Amount of Default ' in Lakhs **

Amount of Default ' in Lakhs

Period of default

Up to 31-03-2019

Up to 31-03-2018

Principal Interest Principal Interest
Allahabad Bank 2006.16 1428.34 233.39 184.91
Bank of Baroda 12687.46 5685.13 6000.55 5652.71
Bank of India 3305.47 3319.99 1787.74 1946.71
Corporation Bank 4340.36 4557.16 2517.71 2661.75
Banks: Exim Bank 1839.50 1409.13 930.59 787.89
ICICI 499.78 264.40 227.92 224.25 & 2018-19
IDBI Bank 3117.63 1662.74 1944.02 894.64
Indian Bank 453.85 253.56 243.53 117.67
Indian Overseas Bank 1326.68 786.23 710.92 395.12
State Bank of India * 5681.16 5328.90 2916.84 3091.35
Union Bank of India 4940.35 3480.13 2652.20 1777.15
Financial institution: LIC of India 725.07 613.43 337.96 279.86 2016-172017-18 & 2018-19

*State Bank of Patiala & State Bank of Travancore have merged with State Bank ofIndia.

**As per books of accounts of the company and subject to reconciliation

(ix) According to information and explanation provided to usthe Company has not raisedmoneys by way of initial public offer or further public offer (including debtinstruments)during the year. According to the information and explanations provided to usterm loans availed by the Company were prima facie; applied for the purposes for whichthe loans were obtained.

(x) Based upon the audit procedures performed by us and according to the informationand explanations provided to us no material fraud by the Company or any material fraud onthe Company by its officers or employees has been noticed or reported during the year.

(xi) According to the information and explanation provided to us the managerialremuneration has been paid and provided in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company. Accordingly reporting on para 3(xii) is notapplicable.

(xiii) According to the information and explanation provided to us all transactionswith the related parties are in compliance with Sections 177 and 188 of the Act whereverapplicable and the details have been disclosed in the standalone financial statements asrequired by the applicable Ind AS.

(xiv) According to the information and explanation provided to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Accordingly reporting on para 3(xiv)is not applicable.

(xv) According to the information and explanation provided to us the Company has notentered into any non-cash transactions with directors or persons connected with them.Accordingly reporting on para 3(xv) is not applicable.

(xvi) According to the information and explanation provided to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly reporting on para 3(xvi) is not applicable.

For Sharp & Tannan Associates
Chartered Accountants
Firm's Registration No.: 109983W
Tirtharaj Khot
Partner
Mumbai 30 May 2019 Membership No.: (F) 037457

Annexure B to the Independent Auditor's Report

(Referred to in paragraph 2 (F) under the heading "Report on other legal andregulatoryrequirements"of our report on even date)

Report on the Internal Financial Controls

[under Clause (i) of sub-section 3 of section 143 of theCompanies Act 2013 ("theAct")]

Opinion

We have audited the internal financial controls over financial reporting of GardenSilk Mills Limited (hereinafter referred as "the Company") as of 31stMarch 2019 in conjunction with our audit of the standalone financial statements ofthe Company for the year ended on that date.

In our opinion and to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2019 based on theinternal financial control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting (hereinafter referred as"the guidance note") issued by the Institute of Chartered Accountants of India(hereinafter referred as "ICAI").

Management's responsibility for internal financial controls

The Company's Management and Board of Directors are responsible for establishing andmaintaining internal financial controlsbased on the internal control over financialreporting criteria established by the Company considering theessential components ofinternal control stated in the guidance note. These responsibilitiesinclude the designimplementation and maintenance of adequate internal financial controls that wereoperatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence tothe Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors theaccuracy and completeness of the accounting recordsand the timely preparation of reliable financialinformation as required under the Act.

Auditor's responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financialreporting based on our audit. We conducted our audit in accordancewith the guidance noteand the Standards onAuditing issued by ICAI and deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethicalrequirements and plan and perform the audit to obtain reasonable assuranceabout whether adequateinternalfinancial controls over financial reporting was establishedand maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internalfinancial controls system over financial reporting and their operatingeffectiveness. Our audit of internalfinancial controls over financial reporting includedobtaining an understanding of internal financialcontrols over financial reportingassessing the risk that a material weakness exists and testing andevaluating the designand operating effectiveness of internal control based on the assessed risk. Theproceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterialmisstatement of the standalone financial statements whether due to fraud orerror.

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

Meaning of internal financial controls over financial reporting

A Company's internal financial control over financial reporting is a process designedto providereasonable assurance regarding the reliability of financial reporting and thepreparation of standalonefinancial statements for external purposes in accordance withgenerally accepted accounting principles. Acompany's internal financial control overfinancial reporting includes those policies and procedures that(1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflectthetransactions and dispositions of the assets of the company; (2) provide reasonableassurance thattransactions are recorded as necessary to permit preparation of standalonefinancial statements inaccordancewith generally accepted accounting principles and thatreceipts and expenditures of the company are beingmade only in accordance withauthorizations of management and directors of the company; and (3) providereasonableassurance regarding prevention or timely detection of unauthorized acquisition useordisposition of the company's assets that could have a material effect on the standalonefinancial statements.

Inherent limitations of internal financial controls over financial reporting

Because of the inherent limitations of internal financial controls over financialreporting includingthe possibility of collusion or improper management override ofcontrols material misstatements due to erroror fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controlsover financial reportingto future periods are subject to the risk that the internal financial controloverfinancial reporting may become inadequate because of changes in conditions or thatthe degree of compliancewith the policies or procedures may deteriorate.

For Sharp & Tannan Associates
Chartered Accountants
Firm's Registration No.: 109983W
Tirtharaj Khot
Partner
Mumbai 30 May 2019 Membership No.: (F) 037457