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Hindustan Organic Chemicals Ltd.

BSE: 500449 Sector: Industrials
NSE: HOCL ISIN Code: INE048A01011
BSE 10:56 | 18 Oct 40.55 0.70
(1.76%)
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40.60

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41.00

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39.70

NSE 05:30 | 01 Jan Hindustan Organic Chemicals Ltd
OPEN 40.60
PREVIOUS CLOSE 39.85
VOLUME 48687
52-Week high 47.90
52-Week low 13.50
P/E
Mkt Cap.(Rs cr) 272
Buy Price 40.45
Buy Qty 678.00
Sell Price 40.55
Sell Qty 80.00
OPEN 40.60
CLOSE 39.85
VOLUME 48687
52-Week high 47.90
52-Week low 13.50
P/E
Mkt Cap.(Rs cr) 272
Buy Price 40.45
Buy Qty 678.00
Sell Price 40.55
Sell Qty 80.00

Hindustan Organic Chemicals Ltd. (HOCL) - Auditors Report

Company auditors report

To the members of

Hindustan Organic Chemicals Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of HINDUSTANORGANIC

CHEMICALS LIMITED (the “Company”) which comprise the Balance Sheet as atMarch 31 2020 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows ended on that date anda summary of significant accounting policies and other explanatory information(hereinafter referred to as the “standalone financial statements”).

2. 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 Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended (“Ind AS”) and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 312020 the loss and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

3. We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (“SA”s) 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 (“ICAI”) together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules made there under and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence obtained by us is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

4. 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.

Key Audit Matter Auditor's Response
1 Kerala Value Added tax Input Credit Refund Receivable Our principal audit procedures included the following:
As per the Kerala Value Added Tax Act Company is entitled to receive refund of excess in input tax credit on purchases of raw materials and consumables from the Kerala Commercial Tax Department. The total refund due as on March 31 2020 for the periods from 2005-06 to 2007-08 2011-12 2012-13 and 2014-15 to 2016-17 is Rs.1721.70 lakhs. The Company has filed refund claim applications in Form No.21B and 21CC with Assessing Authority for each year as per the Act. Analyzed the relevant provisions of the Kerala Value Added Tax Act and Rules there under.
Reviewed the records and documents submitted to the Assessing Authority for claiming the refund and also the related correspondence received from the Assessing Authority.
Reviewed the working/calcu lation of refund amount claimed.
2 Estimation of Provision & Contingent Liabilities Our principal audit procedures included the following:
In the recognition and measurement of provisions there is uncertainty about the timing or amount of the future expenditure required to settle the liability. We inspected the minutes of the board and enquired of the senior officials of management for claims arising and challenged whether provisions are required.
In respect of contingent liabilities there are estimates and assumptions made to determine the amount to be disclosed.
As a result there is a high degree of judgment required for the recognition and measurement of provisions and disclosure of contingent liabilities. Company has reported Provision and Contingencies amounting to Rs.42401.70 lakhs in the note 39 to Standalone Ind AS financial statement. In respect of penal interest and interest on interest of Government of India loans [39 (i) (a) (ix) & (x)] we verified the loan release orders and other communication from Ministry of Chemicals and Fertilisers Government of India.
There is a risk of material misstatement that the estimates are incorrect and that the provisions or contingent liabilities are materially misstated. In respect of other claims/matters which are under dispute we have verified the related documents and assessed the opinion of senior officials in charge /counsels engaged by the company.

Emphasis Matter

5. We draw attention to Note No.46 to Notes to Standalone Financial Statement asregards Management's evaluation of impact of Covid-19 on the future performance of theCompany. Our opinion is not modified in this regard.

Information Other than the Financial Statements and Auditor's Report Thereon

6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Corporate Governance Report andShareholder Information but does not include the standalone financial statements and ourauditor's report thereon.

7. Our opinion on the standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

8. In connection with our audit of the standalone financial statements ourresponsibility is to read the other information 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.

9. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibilities for the Standalone Financial Statements

10. 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 changes in equity and cash flows of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

11. 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.

12. The Board of Directors is responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

13. 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.

14. 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 financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany 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 the 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 uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the standalone financial statements or if such disclosures are inadequateto modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue 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.

15. Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the standalone financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the standalone financialstatements.

16. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

17. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

18. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

19. As required by Section 143(3) of the Act based on our audit we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flows dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.

e) As per Notification No. G.S.R. 463(E) dated June 5 2015 the Government Companiesare exempted from provisions of section 164 (2) of the Act. Accordingly we are notrequired to report whether any directors are disqualified in terms of provisions containedin the said section.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in “Annexure C”. 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 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 No.39 to the financialstatement.

ii. The Company has entered into long term transmission contract with Gas Authority ofIndia Limited (GAIL) for the transmission of liquefied natural gas in 2011 for a period of15 years ending in 2026. Material foreseeable losses if any cannot be identifiable in thecurrent scenario. The company did not have any derivative contract.

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

20. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the

Central Government in terms of Section 143(11) of the Act we give in “AnnexureA” a statement on the matters specified in paragraphs 3 and 4 of the Order tothe extent applicable.

21. As required by the directions and sub directions issued by the office of theComptroller & Auditor

General of India under section 143 (5) of the Act we give in the “AnnexureB” a statement on the matters referred in those directions.

For BSJ & Associates
Ch artered A cc o un tan ts
(Firm's Registration No.010560S)
Sd/-
CA. JOJO AUGUSTINE
Place: Ernakulam Partner (Membership No. 214088)
Date: 26 June 2020 UDIN: 20214088AAAABD6257

ANNEXURE ‘A' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 20 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Hindustan Organic Chemicals Limitedof even date)

i. In respect of the Company's fixed assets :

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

(b) The Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds / registered sale deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate.

ii. In respect of inventories:

(a) The inventory has been physically verified by the management at reasonableintervals during the year.

(b) The Company has maintained proper records of inventory. As explained to us thediscrepancies between the physical inventory and the book records were not material.

iii. According to the information and explanations given to us the Company had grantedsecured/unsecured interest free term loan of Rs.2744.07 lakhs and term loan with varyinginterest rate amounting to Rs.756.42 lakhs to one body corporate covered in the registermaintained under section 189 of the Companies Act 2013 in respect of which :

(a) As these term loans had been granted during the year 2008-09 the reporting as towhether the terms and conditions of the grant of such loans are not prejudicial to thecompany's interest is not applicable to this year.

(b) As per the loan agreement loan of Rs.2609.72 lakhs shall be repaid in seven equalinstallments commencing from the financial year 2010-11 and Rs.890.77 lakhs shall berepaid in five equal installments commencing from the financial year 2010-11. Both theprincipal and interest on the above loans have not been received by the company as per thestipulation.

(c) The interest free term loan of Rs.2744.06 lakhs is overdue from the financial year2017-18 onwards and the term loan with varying interest rate of Rs.453.01 lakhs andinterest accrued thereon Rs.902.51 as at balance sheet date is overdue from the financialyear 2015-16 onwards. Except follow up the company has not taken any other steps for itsrecovery.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.The company has given guarantee for loan of Rs.603 lakhs from bank taken by its subsidiaryM/s Hindustan Flurocarbons Limited.

v. The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2020 and therefore the provisions of the clause 3(v)of the Order are not applicable to the Company.

vi. We have broadly reviewed the books of account maintained by the company inpursuance to the rules made by the Central Government for maintenance of cost recordsunder sub-section (1) of section 148 of the Act for certain products of the company andare of the opinion that prima facie the prescribed accounts and records have beenmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate and complete.

vii. According to the information and explanations given to us in respect of statutorydues :

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Services TaxCustoms Duty Cess and other material statutory dues applicable to it with the appropriateauthorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods and Services Tax Customs Duty Cess and other materialstatutory dues in arrears as at March 31 2020 for a period of more than six months fromthe date they became payable.

(c) Details of dues of Income Tax Sales Tax Service Tax Excise Duty and Value AddedTax which have not been deposited as at March 31 2020 on account of dispute are givenbelow :

Name of Statute Nature of Dues Period to which the amount relates (F.Y.) Amount of dispute (Rs. In lakhs) Forum where the disputes is pending
1 Central Excise Act 1944 Exemption not allowed 2006-07 104.63 Customs Excise & Services Tax Appellate Tribunal
2 Income Tax Act 1961 Penalty Dues 2001-02 70.50 High Court
3 Income Tax Act 1961 Disallowance of Expenses 2010-11 121.42 Income Tax Appellate Tribunal
4 Income Tax Act 1961 Disallowance of Expenses 2013-14 71.24 Income Tax Appellate Tribunal
5 Income Tax Act 1961 Disallowance of Expenses 2016-17 300.56 Commissioner of Income Tax (Appeals)

viii. The Company has made default in repayment of loans taken from Government and thedetails of which are given below:

Name of Lender Period of Default as on March 31 2020 (in years) Defaulted Amount (Rs. In lakhs)
Government of India 14 60.00
Government of India 13 60.00
Government of India 12 180.00
Government of India 11 536.00
Government of India 10 480.60
Government of India 9 480.60
Government of India 8 480.60

ix. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3(ix) ofthe Order is not applicable to the Company.

x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or no material fraud on the Company by its officers oremployees has been noticed or reported during the year.

xi. Being a Government Company the provisions of section 197 read with Schedule V ofthe Act regarding managerial remuneration are not applicable to the Company and hencereporting under clause (xi) of paragraph 3 of the Order is not applicable.

xii. The Company is not a Nidhi Company under section 406 of the Act and hencereporting under clause 3(xii) of the Order is not applicable to the company.

xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

xiv. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause 3(xiv) of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For BSJ & Associates
Chartered Accountants
(Firm's Registration No.010560S)
Sd/-
CA. JOJO AUGUSTINE
Partner (Membership No. 214088)
Place: Ernakulam UDIN: 20214088AAAABD6257
Date: 26 June 2020

ANNEXURE “B” TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 21 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Hindustan Organic Chemicals Limitedof even date) As required by the directions and sub directions issued by the Comptrollerand Auditor General of India under 143 (5) of the Act we give below our comments on thematters referred therein.

A. Directions

1 Whether the Company has system in place to process all the accounting transactions through IT system? If yes the implications of processing of accounting transactions outside IT system on the integrity of accounts along with financial implications if any may be stated Yes all the accounting transactions are processed through IT System. However there are two IT systems in place that is Tally ERP in Rasayani Unit and SAP in Kochi Unit upto November 30 2019. From December 1 2019 onwards in Kochi Unit also accounting transactions other than payroll and fixed assets are processing through Tally ERP. Consolidation of the Rasyani and Kochi Unit as a whole is prepared using MS Office.
2 Whether there is restructuring of an existing loan or cases waiver/ write off of bad debts/loans/ interest etc made a lender to the company due to company's inability to repay the loan? If yes the financial impact may be stated. There are no loans which have restructured during the year. A restructuring plan has been approved by the Government of India vide order dated May 22 2017. As per Government of India letter No.51012/01/2018-Ch.III dated 12/06/ 2020 ex-post facto approval has been conveyed waiving interest of Rs.758.97 lakhs due on Government of India loans as on 31/03/2015. If Government of India has not granted ex-post facto approval to the request for waiver of interest the Other Income would have been Rs.1435.65 lakhs
3 Whether funds received or receivable for specific schemes from central or state agencies were properly accounted for or utilized as per its terms and conditions? List the case of deviations. No. The company has not received any fund for specific scheme from central or state agencies.
B. Sub-direction
State areas of land under encroachment and briefly explain the steps taken by the company to remove encroachment. As per the information and explanation available to us in Rasayani Unit land admeasuring 22.717 acres is under encroachment as per the report of survey conducted by M/s The Geo Tek dated April 24 2019. Also there is public road constructed in 10.576 acres of land and its value considered as Nil. 32.547 Acres of land is given to Maharashtra Industrial Development Corporation Maharashtra State Electricity Board Hindustan Insecticides Limited and Mahatma Education Society.
We have been informed that the company has taken up matter before the Ministry and is in the process of necessary action for the recovery of encroached land.

 

For BSJ & Associates
Chartered Accountants
(Firm's Registration No.010560S)
Sd/-
CA. JOJO AUGUSTINE
Partner (Membership No. 214088)
Place: Ernakulam UDIN: 20214088AAAAB D6257
Date: 26 June 2020

ANNEXURE “C” TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 19(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Hindustan Organic Chemicals Limitedof even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause

(i) of Sub-section 3 of Section 143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of HINDUSTANORGANIC CHEMICALS LIMITED (the “Company”) as of March 312020 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (the“ICAI”). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to therespective company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the “Guidance Note”) issued by the ICAI and the Standardson Auditing prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting 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 authorisations of themanagement 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 including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 312020 based on the internal financialcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For BSJ & Associates
Chartered Accountants
(Firm's Registration No.010560S)
Sd/-
CA. JOJO AUGUSTINE
Place: Ernakulam Partner (Membership No. 214088)
Date: 26 June 2020 UDIN: 20214088AAAAB D6257

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