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ITD Cementation India Ltd.

BSE: 509496 Sector: Infrastructure
NSE: ITDCEM ISIN Code: INE686A01026
BSE 00:00 | 17 Sep 79.40 -2.90
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77.80

NSE 00:00 | 17 Sep 79.25 -3.00
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82.70

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OPEN 83.20
PREVIOUS CLOSE 82.30
VOLUME 89203
52-Week high 97.50
52-Week low 46.05
P/E 26.92
Mkt Cap.(Rs cr) 1,364
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 83.20
CLOSE 82.30
VOLUME 89203
52-Week high 97.50
52-Week low 46.05
P/E 26.92
Mkt Cap.(Rs cr) 1,364
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

ITD Cementation India Ltd. (ITDCEM) - Auditors Report

Company auditors report

To the Members of

ITD Cementation India Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of ITD CementationIndia Limited (‘the Company') which comprise the Balance Sheet as at 31 March 2020the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.

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 (‘Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (‘Ind AS') specified under section 133 of the Act of thestate of affairs of the Company as at 31 March 2020 and its profit (including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (‘ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Emphasis of Matter

4. We draw attention to Note 2(iv)(a) to the accompanying standalone financialstatements with regard to management's evaluation of uncertainty arising due to theoutbreak of COVID-19 pandemic and its impact on the Company's operations and on thestandalone financial statements of the Company as at and for the year ended 31 March 2020.The impact of these uncertainties on the Company's operations is significantly dependenton future developments. Our opinion is not modified in respect of this matter.

Key Audit Matters

5. 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 financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

6. We have determined the matters described below to be the key audit matters to becommunicated in our report.

Key audit matter How our audit addressed the key audit matter
Recognition of contract revenue margin and contract costs (Refer Note 2(xvi) of the standalone financial statements)
The Company's revenue primarily arises from construction contracts which by its nature is complex given the significant judgements involved in the assessment of current and future contractual performance obligations. Our audit procedures to address this key audit matter included but were not limited to the following:
The Company recognises revenue and the resultant profit/ loss relying on the estimates in relation to forecast contract revenue and forecast contract costs on the basis of stage of completion which is determined based on the proportion of contract costs incurred at balance sheet date relative to the total estimated costs of the contract at completion. • Evaluating the appropriateness of the Company's accounting policy for revenue recognition.
• Obtaining an understanding of the Company's processes and evaluating the design and tested effectiveness of key internal financial controls including those related to review and approval of contract estimates.
The revenue on contracts may also include variable considerations which are recognised when the recovery of such consideration is highly probable. • For a sample of contracts testing the appropriateness of amount recognized as revenue basis percentage of completion method by evaluating key management judgements inherent in determining forecasted contract revenue and costs to complete the contract including:
Key audit matter How our audit addressed the key audit matter
These contract estimates are reviewed by the management on a periodic basis. In doing so the management is required to exercise judgement in its assessment of the valuation of contract variations and claims as well as the completeness and accuracy of forecast costs to complete and the ability to deliver contracts within contractually determined timelines. - verifying the underlying documents such as original contract and its amendments if any for reviewing the significant contract terms and conditions;
- evaluating the identification of performance obligation of the contract;
The final contract values can potentially be impacted on account of various factors and are expected to result in varied outcomes. - obtaining an understanding of the assumptions applied in determining the forecasted revenue and cost to complete; and
Changes in these judgements and the related estimates as contracts progress can result in material adjustments to revenue and margins. As a result of the above judgments complexities involved and material impact on the related financial statement elements this area has been considered a key audit matter in the audit of the standalone financial statements. - testing the existence and valuation of claims and variations with respect to the contractual terms and inspecting the related correspondences with customers.
• For cost incurred to date testing samples to appropriate supporting documents and performing cut-off procedures.
• Testing the forecasted cost by obtaining executed purchase orders/ agreements and evaluating the reasonableness of management judgements/ estimates using past trends and similar completed/ on-going projects.
• Performing analytical procedures for reasonableness of revenue recognised.
• Evaluating the appropriateness and adequacy of the disclosures related to contract revenue and costs in the financial statements in accordance with the applicable accounting standards.
Physical verification of inventory (Refer Notes 10 and 10.1 of the standalone financial statements)
As at 31 March 2020 the Company held inventories aggregating Rs 19675.59 lakhs as disclosed in Note 10 to the standalone financial statements. Inventories mainly consist of construction materials and spares. Due to nature of the business inventories are kept at project sites on multiple locations in India and the management performs physical verification of inventory as per the inventory verification plan of the Company. Our audit procedures to address this key audit matter included but were not limited to the following:
• Obtaining an understanding of the management's process for inventory counts including the changes required thereto as a result of COVID-19 related restrictions and evaluated the design and tested the operating effectiveness of key controls with respect to physical verification of inventory.
Due to Covid-19 outbreak and the related lockdown restrictions imposed from time to time by respective governments the management was unable to perform the year end physical verification of inventories on 31 March 2020 which was carried out by management subsequent to the year end and performed roll-back procedures from date of count to the reporting date to arrive at the physical stock as on reporting date. • Inspecting the instructions given by supervisory teams to the respective management teams carrying out physical verification of inventory.
• Enquiring and reviewing documents to identify any changes in process of inventory counts from previously held counts observed by us.
Considering the above we have reassessed our audit approach as at year end and adopted alternate audit procedures. • Reviewing the management's process for ensuring that there was no movement of stock during the physical verification of inventory.
• Observing live video feeds of physical inventory verification subsequent to year end and recounted the samples of inventory at select projects along with roll-back procedures to confirm existence of inventory at year end.
As a result of alternative audit procedures being performed and due to the complexities size number of locations and geographical spread of the inventories as at year end we determined the existence of inventory to be a key audit matter for the current period audit. • Obtaining management's inventory count records (count sheets) and reconciliation with the Company's perpetual inventory records.
• Ensuring that the differences noted if any in management's physical verification of inventory from book records were adequately adjusted in books of account.
Key audit matter How our audit addressed the key audit matter
Recoverability of trade receivables and contract assets (Refer Notes 6 and 9 of the standalone financial statements)
As at 31 March 2020 the Company has Trade Receivables and Contract assets (work-in-progress) amounting to Rs 46061.39 lakhs and Rs 50610.06 lakhs respectively. Our audit procedures to address this key audit matter included but were not limited to the following:
In assessing the recoverability of the aforesaid balances including impairment allowance management's judgement involves consideration of ageing status evaluation of litigations and the likelihood of collection based on the terms of the contract. • Obtaining an understanding of the Company's processes evaluating the design and testing the effectiveness of key internal financial controls over recognition and the recoverability of the trade receivables and contract assets.
We considered this as key audit matter due to the materiality of the amounts and significant estimates and judgements as stated above. • Circulating and obtaining confirmations for trade receivables on sample basis with respect to outstanding balances.
• Performing additional procedures in respect of material trade receivables and contract assets such as testing subsequent payments / certifications from customers obtaining correspondence with customers and reviewing the legal advice obtained by the management in respect of matters under litigations on a sample basis.
• Inquiry procedures with senior management of the Company regarding the status of collectability of these receivables.
• Verifying contractual arrangements to support management's position on the tenability and recoverability of these receivables.
• Assessing the allowance for impairment made by the management Further for material balances discussing the basis for allowance for impairment with the audit committee.
• Evaluating the appropriateness and adequacy of the disclosures related to trade receivables and contract assets in the financial statements in accordance with the applicable accounting standards.

Information other than the Financial Statements and Auditor's Report thereon

7. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we will 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 when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

If based on the work we have performed on the other information obtained prior to thedate of this auditor's report we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

8. The accompanying standalone financial statements have been approved by the Company'sBoard of Directors. The Company's Board of Directors is 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 financial performanceincluding other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including the IndAS specified under section 133 of the Act. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

9. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

10. Those Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

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

12. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

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

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Companyhas adequate internal financial controls with reference to financial statements in placeand the operating effectiveness of such controls;

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern;

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

13. 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.

14. 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.

15. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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

16. As required by section 197(16) of the Act based on our audit we report that theCompany has paid remuneration to its directors during the year in accordance with theprovisions of and limits laid down under section 197 read with Schedule V to the Act.

17. As required by the Companies (Auditor's Report) Order 2016 (‘the Order')issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.

18. Further to our comments in Annexure I as required by section 143(3) of the Actbased on our audit we report to the extent applicable that:

a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit of theaccompanying standalone financial statements;

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 financial statements dealt with by this report are in agreement withthe books of account;

d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under section 133 of the Act;

e) the matter described in paragraph 4 under the Emphasis of Matter in our opinionmay have an adverse impact on the functioning of the Company;

f) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2020 from being appointed as a director in terms of section 164(2) of the Act;

g) we have also audited the internal financial controls with reference to financialstatements of the Company as on 31 March 2020 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 17 June 2020 as per Annexure II expressed an unmodified opinion; and

h) with respect to the other matters to be included in the Auditor's Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. the Company as detailed in Note 30 (iv) to (viii) to the standalone financialstatements has disclosed the impact of pending litigations on its financial position asat 31 March 2020;

ii. the Company has made provision as at 31 March 2020 as required under theapplicable law or Ind AS for material foreseeable losses if any on long-term contractsincluding derivative contracts; as detailed in Note 21.1 to the standalone financialstatements.

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2020; and

iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Rakesh R. Agarwal
Partner
Place: Mumbai Membership No.: 109632
Date: 17 June 2020 UDIN: 20109632AAAAFC8804

Annexure I to the Independent Auditor's Report of even date to the members of ITDCementation India Limited on the standalone financial statements for the year ended 31March 2020

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:

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

(b) The property plant and equipment have been physically verified by the managementduring the year and no material discrepancies were noticed on such verification. In ouropinion the frequency of verification of the property plant and equipment is reasonablehaving regard to the size of the Company and the nature of its assets.

(c) The title deeds of all the immovable properties (which are included under the head‘property plant and equipment') are held in the name of the Company.

(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies between physicalinventory and book records were noticed on physical verification.

(iii) The Company has granted an interest free unsecured loan to a company covered inthe register maintained under Section 189 of the Act; and with respect to the same:

(a) in our opinion the terms and conditions of grant of such loan is not prima facieprejudicial to the company's interest

(b) the schedule of repayment of the principal and the payment of the interest has notbeen stipulated and hence we are unable to comment as to whether repayments/receipts ofthe principal amount and the interest are regular;

(c) in the absence of stipulated schedule of repayment of principal and payment ofinterest we are unable to comment as to whether there is any amount which is overdue formore than 90 days and whether reasonable steps have been taken by the Company for recoveryof the principal amount and interest.

(iv) In our opinion the Company has complied with the provisions of Section 186 inrespect of loans and guarantee. Further in our opinion the Company has not entered intoany transaction covered under Section 185 and Section 186 of the Act in respect ofinvestments and security.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's services and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax goods and services tax duty of customsduty of excise value added tax cess and other material statutory dues as applicablehave generally been regularly deposited to the appropriate authorities though there hasbeen a slight delay in a few cases. Further no undisputed amounts payable in respectthereof were outstanding at the year-end for a period of more than six months from thedate they became payable.

(b) There are no dues in respect of entry tax duty of customs and goods and servicetax that have not been deposited with the appropriate authorities on account of anydispute. The dues outstanding in respect of income-tax sales-tax service tax duty ofexcise and value added tax on account of any dispute are as follows:

Statement of Disputed Dues

Name of statute Nature of dues Amount Amount paid under protest Period to which the amount relates Forum where dispute is pending
(Rs in Lakhs) (Rs in Lakhs)
Sales Tax Act/ Works Contract Tax Act/ Value Added Tax Central Sales Tax and Local Sales Tax (Including Value Added Tax) 1101.66 171.41 FY 2008-09 2011- 12 2012-2013 and 2015-16 Taxation Tribunal
1009.71 214.02 FY 2008-09 to 2012- 13 and FY 2015-16 Deputy/ Joint Commissioner of Commercial Taxes
307.59 - FY 2013-14 Senior Joint Commissioner Appeals
16.60 - FY 1994-95 Revision Board (Tribunal)
83.20 82.96 FY 2006-07 to 2008- 09 High Court
714.09 - FY 2004-05 2006-07 2007-08 2010-11 and 2011-12 Appellate and Revisional Board
The Finance Act 1994 Service Tax 3512.60 - Various years/ periods from 1 October 2004 to 30 June 2017 Commissioner of Central Goods & Service Tax and Central Excise
Central Excise Act1944 Excise Duty 51.70 - May 1998 to January 1999 Commissioner of Central Excise
Income Tax Act 1961 Income Tax 210.75 - A.Y 2004- 05 High Court
286.85 - A.Y 2011-12 and 2012-13 Income Tax Appellate Tribunal
315.56 - A.Y. 2010-11 2012-13 and 2013-14 Commissioner of Income Tax (Appeals)

(viii) The Company has not defaulted in repayment of loans or borrowings to any bank orfinancial institution during the year. The Company did not have any outstanding debenturesduring the year.

(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurpose for which the loans were obtained.

(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the year covered by our audit.

(xi) Managerial remuneration has been paid by the Company in accordance with therequisite approvals mandated by the provisions of Section 197 of the Act read withSchedule V to the Act.

(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements as required by the applicable Ind AS.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.

(xv) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.

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

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Rakesh R. Agarwal
Partner
Place: Mumbai Membership No.: 109632
Date: 17 June 2020 UDIN: 20109632AAAAFC8804

Annexure II to the Independent Auditor's Report of even date to the members of ITDCementation India Limited on the standalone financial statements for the year ended 31March 2020

Independent Auditor's Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (‘the Act')

1. In conjunction with our audit of the standalone financial statements of ITDCementation India Limited (‘the Company') as at and for the year ended 31 March 2020we have audited the internal financial controls with reference to financial statements ofthe Company as at that date.

Responsibilities of Management and Those Charged with Governance for Internal FinancialControls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on Internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the"Guidance Note") issued by the institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of the Company's business including adherenceto the Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility for the Audit of the Internal Financial Controls withReference to Financial Statements

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by the ICAI and deemed to beprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to financial statements and the Guidance Noteissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wereestablished and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements includes obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

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

Meaning of Internal Financial Controls with Reference to Financial Statements

6. A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements

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

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to financial statements and such controls were operatingeffectively as at 31 March 2020 based on the internal control over financial reportingcriteria established by the Company essential components of internal control stated in theGuidance Note issued by the ICAI.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Rakesh R. Agarwal
Partner
Place: Mumbai Membership No.: 109632
Date: 17 June 2020 UDIN: 20109632AAAAFC8804

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