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Jain Irrigation Systems Ltd.

BSE: 500219 Sector: Industrials
NSE: JISLJALEQS ISIN Code: INE175A01038
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NSE 00:00 | 24 Sep 35.95 -0.60
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OPEN 37.00
PREVIOUS CLOSE 36.55
VOLUME 541964
52-Week high 40.50
52-Week low 12.65
P/E
Mkt Cap.(Rs cr) 1,833
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 37.00
CLOSE 36.55
VOLUME 541964
52-Week high 40.50
52-Week low 12.65
P/E
Mkt Cap.(Rs cr) 1,833
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Jain Irrigation Systems Ltd. (JISLJALEQS) - Auditors Report

Company auditors report

To the Members of Jain Irrigation Systems Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying Standalone Ind AS Financial Statements of JainIrrigation Systems Limited ("the Company") which comprise the Balance Sheet asat March 31 2020 the Statement of Profit and Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and notes tothe Standalone Ind AS Financial Statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "StandaloneInd AS financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India including the Indian Accounting Standards ("Ind AS") prescribed undersection 133 of the Act of the state of affairs of the Company as at March 31 2020 itsloss (including other comprehensive income) changes in equity and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit in accordance with Standards on Auditing (SAs) specifiedresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India ("ICAI") together with theethical requirements that are relevant to our audit of the standalone Ind AS financialstatements under the and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our opinionon the standalone Ind AS financial statements.

Material Uncertainty Related to Going Concern

We draw attention to Note 42 in the Standalone Ind AS financial statements whichindicates that there has been delays in meeting its debt obligations by the Company. TheCompany is presently engaged with lenders on the resolution plan and proposes to raisefunds through monetization of its noncore assets mobilisation of additional funds andother strategic initiative to meet its obligation. 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.

Emphasis of Matter

We draw attention to Note 41 totheaccompanyingStandaloneIndASfinancialstatements whichexplains the uncertainties and the Management's evaluation of the financial impact on theCompany due to lockdown and other restrictions on account of COVID-19 pandemic situationand on account of resolution plan for which a definitive assessment of the impact ishighly dependent upon the circumstances as they evolve in the subsequent period.

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 Ind AS financial statements of the currentyear. These matters were addressed in the context of our audit of the Standalone Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. In addition to the matter described in the MaterialUncertainty Related to Going Concern section above we have determined the mattersdescribed below to be the key audit matters to be communicated in our report.

Sr. No. Key audit matters How our audit addressed the key audit matter
1. Revenue recognition on long term contracts (percentage of completion accounting) Our audit procedures included :
(a) W e understood and tested the design and operating effectiveness of controls as established by the Management.
(Refer to notes 2.4(c) 18 and 34 to the standalone Ind AS financial statements as on March 31 2020) (b) Validation of Accounting Policy:
We have assessed the appropriateness of the Company's accounting policy on revenue recognition including those relating to contract revenue by comparing with applicable accounting standards.
The Company generates a significant portion of its revenue from long term engineering contracts (construction contracts) which include both contracts related to Micro Irrigation Systems and PE PVC Pipes. These contracts are accounted under the percentage of completion method (POC). The new accounting standard involved judgment relating to identification of separate performance obligations determination of transaction price allocation of transaction to separate performance obligations and the appropriateness of the basis used to measure revenue recognition over the period.
(c) Control testing:
W e have obtained an understanding of the methodology applied the internal processes and the controls used to determine the Percentage of completion identification of expected project revenue cost incurred for the specific project (including allocation of overheads and other costs) and estimated costs required to complete the project. We evaluated the processes and technical systems used to record actual costs incurred and tested the effectiveness of the controls.
(d) Tests of details:
We have focused on Management's judgment in applying the methodology and the estimates made to determine the amount of revenue to be recorded in their project calculations. Further our checking of details involved the following procedures -
• We obtained and reviewed project source documents such as contracts budgets and projects calculations.
• We have checked read and evaluated the existing and new contracts to check the separate performance obligation and transaction price. We have evaluated whether the transaction price involves any variable consideration.
We identified this matter as a key audit matter due to the size of revenue generated from construction contracts. Furthermore accounting for the contracts involves both judgment in assessing whether the criteria set out in the Ind AS have been met and estimates related to future costs the final outcome of the contract and the stage of completion. • We have critically verified the actual project costs incurred revenue booked and by carrying out sensitivity analysis analysed the estimation of the Management over balance costs required to complete the projects. Also we have verified the process of allocation of project costs on each and every project and basis for determining project revenue and project costs that are required to be booked.
• We have also verified the acceptance of invoices and work completed by the contractor.
• We have made enquiry with Management in respect of the reasonableness of judgments made regarding the cost to complete estimate and the timing of recognition of change orders.
• We also assessed whether Management's policies and processes for making these estimates continue to be appropriate and are applied consistently over the period time and to contracts of a similar nature.
2. Valuation of Trade Receivables (Refer to Note 8(b) and 37 to the standalone Ind AS financial statements) Our audit procedures included :
(a) We understood and tested the design and operating effectiveness of controls as established by the Management over trade receivables.
(b) Validation of Accounting policies:
We have assessed the appropriateness of the Company's credit risk policy and obtaining an understanding on Management of credit risk.
At March 31 2020 the trade receivables balance excluding provisions included in note 8(b) was Rs. 25905.35 million.
(c) Discussing with the management and obtaining a list of accounts receivables with relevant amount of settlement during the year or subsequent to the end of the reporting period identified by the management and their assessment on the recoverability of accounts receivables.
Trade receivables are mainly comprised of receivables from central and state government owned enterprises aggregating Rs. 15393.43 million as on March 31 2020 which are subject to independent confirmations.
(d) Control testing:
• Obtaining an understanding on credit approvals establishing credit limits and continuous monitoring of creditworthiness of customers to which the Company grants the credit in normal course of business.
• Obtaining understanding on how the Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables.
We have identified valuation of trade receivables as a key audit matter on account of the significant management judgment involved with respect to the recoverability and existence of trade receivables and the provisions for impairment of receivables and the importance of cash collection with reference to the working capital management of the business. (e) Tests of details:
• We have checked the ageing analysis on a sample basis and subsequent receipt of the trade receivables to the source documents including bank statements;
• We have verified the underlying supporting documents like RA bills approvals from Government Authorities at the time of supply of materials/ rendering of services along with various correspondence carried out by the Management of the Company with government Trade Receivable Authorities;
• We have verified open invoices duly approved by Government Authorities in order to ensure existence of trade receivables;
• We have verified the appropriateness of judgments regarding provisions for trade receivables and assessment as to whether these provisions were calculated in accordance with the Company's provisioning policies.
• Evaluated the historical accuracy of the management's assessment of impairment for accounts receivables on a sample basis by examining the actual write-offs the reversal of previous recorded allowance and new allowances recorded in the current year in respect of accounts receivables at the end of the previous financial year.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and Analysis.Business Responsibility Report and Directors' Report forming part of annual report butdoes not include the standalone Ind AS financial statements consolidated Ind AS financialstatements and our auditor's report thereon.

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

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. 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.

Responsibilities of Management and Those Charged with Governance for the Standalone IndAS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements that give a true and fair view of the financial position performance(including other comprehensive income) changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including Ind ASprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; 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 standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone Ind AS 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.

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

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

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial 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 this standalone Ind AS financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficientand appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

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

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone Ind AS financial statements or if such disclosures are inadequate tomodify 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 standalone Ind ASfinancial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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 Ind AS financialstatements of the current year and are therefore the key audit matters. We describe thesematters in our auditor's report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits such communication.

Report on Other Legal and Regulatory Requirements

(1)As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India terms of section 143(11) of the Act we give in"Annexure 1" a statement on the matters specified of the Order to the extentapplicable.

(2)As required by section 143(3) of the Act we report that: a. We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; b. In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; c. The Balance Sheet the Statement of Profit and Loss(including Other Comprehensive Income) the Statement of Changes in Equity and theStatement of Cash Flows dealt with by this report are in agreement with the books ofaccount; d. In our opinion the aforesaid standalone Ind AS financial statements 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended; e.The matter described under the Material Uncertainty Related to Going Concern sectionabove in our opinion may have an adverse effect on the functioning of the Company; f. Onthe basis of the written representations received from the directors as on March 31 2020and taken on record by the Board of Directors none of the directors is disqualified as onMarch 31 2020 from being appointed as a director in terms of section 164(2) of the Act;g. With respect to the adequacy of the internal financialstatements of the Companycontrolswithreferenceto and the operating effectiveness of such controls refer to ourseparate report in "Annexure 2"; h. With respect to the other matter to beincluded in the Auditor's Report in accordance with the requirements of section 197(16) ofthe Act: In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid/ provided by the Company to its directorsduring the year is in accordance with the provisions of section 197 of the Act; i. Withrespect to the other matters to be included in the Auditor's Report in accordance withRule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the bestof our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements Refer Note 29 on ContingentLiabilities to the standalone Ind AS financial statements;

(ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts – Refer Note 34 and 37 to the standalone Ind AS financialstatements;

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

For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W / W100048
Sd/-
Snehal Shah
Partner
Membership No. 048539
UDIN: 20048539AAAABV7300
Place: Mumbai
Date: July 31 2020

ANNEXURE 1

TO THE INDEPENDENT AUDITOR'S REPORT

[Referredtoinparagraph1under‘ReportonOtherLegalandRegulatoryRequirements' sectionin the Independent Auditor's Report of even date to the members of Jain Irrigation SystemsLimited ("the Company") on the standalone Ind AS financial statements for theyear ended March 31 2020]

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone Ind AS financial statements of the Company and taking intoconsideration the information and explanations given to us and the books of account andother records examined by us in the normal course of audit we report that: i) a) TheCompany has maintained proper records showing full particulars including quantitativedetails and ed assets. fix situationof b) During the year the part of the fixed assets ofthe Company have been physically verified by the management as per regular programme ofverification and no material discrepancies were noticed on such verification.In ouropinion the frequency of verificationis reasonable having regard to the size of theCompany and the nature of its assets. c) The title deeds of immovable properties recordedas fixed assets in the books of account of the Company are held in the name of theCompany. ii) The inventory except stocks lying with third parties has been physicallyverified by the Management during the is reasonable. For stocks lying with third partiesat the yearend year. Inouropinionthefrequencyofverification written confirmations havebeen obtained by the management. No material discrepancies were verification carried outduring the year. iii) The Company has granted loans secured or unsecured to companiesfirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Act. a) The terms and conditions of the aforesaid loans grantedby the Company are not prejudicial to the interest of the Company. b) The schedule ofrepayment of principal and payment of interest in respect of such loans has beenstipulated and the repayments or receipts of principal amounts and interest are yet tocommence at a later date as per \ the terms of loan agreement repayment schedule. c) Inrespect of the aforesaid loans there is no overdue amount in respect of loans granted tocompanies firms Limited Liability Partnerships or other parties listed in the registermaintained under section 189 of the Act as the said amounts are not yet due. iv) 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.v) In our opinion the Company has not accepted any deposits from the public within theprovisions of sections 73 to 76 of the Act and the rules framed there under. Accordinglythe provisions of clause 3(v) of the Order are not applicable. vi) The maintenance of costrecords has been specified by the Central Government under sub-section (1) of section 148of the Act and rules thereunder. We have broadly reviewed such records and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete. vii) (a) The Company is regular indepositing with appropriate authorities undisputed statutory dues including providentfund employees' state insurance income tax goods and services tax (GST) customs dutycess and any other material statutory dues applicable to it except that in case of taxdeducted at source (Income Tax) there have been serious delays in a large number of cases.During the year 2017-18 sales tax value added tax service tax and duty of excisesubsumed in GST and are accordingly reported under GST.

AND

No undisputed amounts payable in respect of provident fund employees' state insuranceincome tax GST customs duty cess and any other material statutory dues applicable toit were outstanding at the year end for a period of more than six months from the datethey became payable. However undisputed dues in respect of tax deducted at source (IncomeTax) which were outstanding at the yearend for a period of more than six months from thedate they became payable are as follows:

Name of the statute Nature of the dues Amount (Rs.in Million) Period to which the amount relates Due Date Date of Payment
The Income Tax Act 1961 Tax deducted at Source (Income Tax) 4.80 July 2019 August 2019 September 2019 7th of the following month Outstanding as on date

(b) The dues outstanding with respect to sales tax value added tax and excise duty onaccount of any dispute are as follows:

Name of the statute Nature of dues Amount ( Rs. in millions) Period to which the amount relates Forum where dispute is pending
Central Sales tax and Local Sales Tax Sales Tax 47.50 FY 2006-2007 2008-2009 2009 -2010 2011-2012 2012-2013 2017-2018 High Court of Madhya Pradesh
2.28 FY 2006-2007 High Court of Tamil Nadu
3.08 FY2009-10 2014-2015 Commissioner of Sales Tax Chhattisgarh and Telangana
The Central Excise Act 1994 Excise duty 7.95 FY 2008 - 2009 Commissioner of Central Excise customs and Service Tax
59.26 FY 1992 -1997 2012 – 2014 Customs Excise and Service Tax Appellate Tribunal
188.32 FY 1995-1998 High Court of Bombay
The Income Tax Act 1961 Income Tax 9.26 AY 2011-2012 Commissioner of Income Tax (Appeals)

(viii) During the year the Company has not defaulted in repayment of loans orborrowings to financial institution and banks except for details given below:

Particulars Amount of default as at March 31 2020 (Rs. in millions) Period of Default
From Banks -
Exim Bank Installment towards Rupees Term loan 281.82 Due on Oct 2019Nov 2019 and Jan 2020
Canara Bank Installment towards Rupees term loan 73.50 Due on Oct 2019 to March 2020
International Finance Corporation - Installment towards External Commercial Borrowing 679.21 Due on Nov 2019 and March 2019

F urther the Company has not taken any loans or borrowings from government nor has itissued any debentures. (ix) The Company has not raised any moneys by way of initial publicoffer further public offer (including debt instruments) or term loans during the year.Accordingly clause 3(ix) of the Order is not applicable to the Company.

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

(xi) Managerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion the Company is not a Nidhi Company. Therefore clause 3(xii) ofthe Order is not applicable to the Company.

(xiii) All transactions entered into by the Company with the related parties are incompliance with sections 177 and 188 of Act where applicable and the details have beendisclosed in the standalone Ind AS financial statements as required by the applicableaccounting standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. Therefore clause 3(xiv)of the Order is not applicable to the Company.

(xv) The Company has not entered into any non-cash transactions with directors orpersons connected with them during the year and hence provisions of section 192 of the Actare not applicable.

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

For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No. 103523W / W100048
Sd/-
Snehal Shah
Partner
Membership No.048539
UDIN: 20048539AAAABV7300
Place: Mumbai
Date :July 31 2020

ANNEXURE 2

TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 2(g) under ‘Report on Other Legal and RegulatoryRequirements' section in our Independent Auditor's Report of even date to the members ofJain Irrigation Systems Limited on the standalone Ind AS financial statements for the yearended March 31 2020]

Report on the Internal Financial Controls with reference to Financial Statements underclause (i) of sub-section 3 of section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls with reference to financial statementsof Jain Irrigation Systems Limited ("the Company") as of March 31 2020 inconjunction with our audit of the standalone Ind AS financial statements of the

Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the statements criteria established by the Company consideringthe essential internalcontrolwithreferencetofinancial components of internal controlstated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof 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 its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

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 Guidance Note and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI.

Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls with reference to financial statements was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness.

Our audit of internal financialcontrols with reference to financial statements includedobtaining an understanding of internal financial controls with reference to financialstatements assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal controls based on the assessed risk.The procedures 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.

We believe that the audit evidence we have obtained is sufficientand 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

A company's internal financial control 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 control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements

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

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at March 31 2020 basedon the internal control with reference to financial statements criteria established by theCompany considering the essential components of internal controls stated in the GuidanceNote issued by the ICAI.

For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W / W100048
Sd/-
Snehal Shah
Partner
Membership No. 048539
UDIN: 20048539AAAABV7300
Place: Mumbai
Date: July 31 2020

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