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Jindal Stainless (Hisar) Ltd.

BSE: 539597 Sector: Metals & Mining
NSE: JSLHISAR ISIN Code: INE455T01018
BSE 00:00 | 29 Oct 96.85 4.20
(4.53%)
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92.70

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98.25

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92.70

NSE 00:00 | 29 Oct 96.85 4.00
(4.31%)
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92.15

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98.60

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OPEN 92.70
PREVIOUS CLOSE 92.65
VOLUME 30117
52-Week high 109.70
52-Week low 30.40
P/E 12.74
Mkt Cap.(Rs cr) 2,285
Buy Price 96.00
Buy Qty 3.00
Sell Price 96.85
Sell Qty 750.00
OPEN 92.70
CLOSE 92.65
VOLUME 30117
52-Week high 109.70
52-Week low 30.40
P/E 12.74
Mkt Cap.(Rs cr) 2,285
Buy Price 96.00
Buy Qty 3.00
Sell Price 96.85
Sell Qty 750.00

Jindal Stainless (Hisar) Ltd. (JSLHISAR) - Auditors Report

Company auditors report

TO THE MEMBERS OF JINDAL STAINLESS (HISAR) LIMITED

Report on the Audit of Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of JINDAL STAINLESS(HISAR) LIMITED ("the Company") which comprise the Balance Sheet as at March31 2020 the Statement of Profit and Loss (including other comprehensive income) thestatement of changes in equity and the statement of cash flows for the year then ended andnotes to the standalone financial statements including a summary of the significantaccounting policies and other explanatory information in which are included the Return forthe year ended on the date audited by the branch auditors of the Company's branch locatedat Kothavalasa in Vizianagaram district Andhra Pradesh. (herein after referred to as"standalone financial statements"). In our opinion and to the best of ourinformation and according to the explanations given to us the aforesaid standalonefinancial statements give the information required by the Companies Act 2013 ("theAct") in the manner so required and give a true and fair view in conformity with theIndian Accounting Standards prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended ("Ind AS") andother accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2020 its profit (including Other comprehensive income) changesin equity and its cash flows for the year ended on that date.

Basis of Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key Audit Matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone financial statements for the year ended March31 2020. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

We have determined the matters described below to be the key audit matters to becommunicated in our report:-

Description of Key Audit Matter How our audit addressed the Key Audit Matter
Contingent liabilities We evaluated the design and tested operating effectiveness of controls in respect of determination of the contingencies. We determined that the operation of the controls provided to us with evidence over the completeness accuracy and valuation of the guarantees by an independent valuer;
The Company faces a number of actual legal and regulatory proceedings. The determination of the provision and/or the level of disclosure required involves a high degree of judgement resulting in provisions and contingent liabilities being considered as a key audit matter.
We read the summary of litigation matters provided by management and held discussions with Company's legal department/advisors and read determinations and judgment's made by the Court/ legal authority(s). We requested legal letters from some of the external legal advisors with respect to the matters included in the summary. Where appropriate we examined correspondence connected with the cases;
For litigation provisions/ contingencies we tested the calculation assessed the estimates against historical trends.
We considered management's judgements on the level of provisioning/ contingencies to be appropriate. We also evaluated appropriateness of the disclosures in Note no. 31 and 38 which we considered appropriate.
Revenue Recognition Our procedures included:
Revenue from the sale of goods (hereinafter referred to as "Revenue") is recognized when the Company performs its obligation to its customers and the amount of revenue can be measured reliably and recovery of the consideration is probable. The timing of such recognition in case of sale of goods is when the control over the same is transferred to the customer which is mainly upon delivery. ? Evaluating the integrity of the general information and technology control environment and testing the operating effectiveness of key IT application controls
? Evaluating the design and implementation of Company's controls in respect of revenue recognition.
? Testing the effectiveness of such controls over revenue cut off at year-end
? Testing the supporting documentation for sales transactions recorded during the period closer to the year end and subsequent to the year end including examination of credit notes issued after the year end to determine whether revenue was recognized in the correct period.
The timing of revenue recognition is relevant to the reported performance of the Company. The management considers revenue as a key measure for evaluation of performance. There is a risk of revenue being recorded before control is transferred.
? Performing analytical procedures on current year revenue based on monthly trends and where appropriate conducting further enquiries and testing.
? Assessing the appropriateness of the Company's revenue recognition accounting policies in line with IND AS 115 ("Revenue from Contracts with Customers") and testing thereof.
Refer Note 1.12 of the Standalone Financial Statements – Significant Accounting Policies

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

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. The Annual Report isexpected to be made available to us after the date of this Auditors' Report. Our opinionon the standalone financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon. In connection with our audit of thestandalone financial statements our responsibility is to read the other information andin doing so consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

Responsibility of Management and Those Charged with Governance for the StandaloneFinancial 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 financial statementsthat give a true and fair view of the financial position/state of affairs financialperformance (profit and loss including other comprehensive income) changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards (Ind AS) specified under Section 133of the Act. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error. In preparing the standalonefinancial statements management is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso. The Board of Directors are also responsible for overseeing the company's financialreporting process.

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

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

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

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

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

? Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe Company 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 standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsand are therefore the key audit matters. We describe these matters in our auditor's reportunless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication. Materiality is the magnitudeof misstatements in the standalone financial statements that individually or inaggregate makes it probable that the economic decisions of a reasonably knowledgeableuser of the financial statements may be influenced. We consider quantitative materialityand qualitative factors in (i) planning the scope of our audit work and in evaluating theresults of our work; and (ii) to evaluate the effect of any identified misstatements inthe standalone financial statements.

Other Matter

(a) We did not audit the financial statements/ information of one branch included inthe standalone financial statements of the company whose financial statements/financialinformation reflect total assets of Rs.4.58 crore as at March 31 2020 and the totalrevenue of Rs. 184.37 crore for the year ended on that date as considered in thestandalone financial statements/information of the branch has been audited by the branchauditor whose report have been furnished to us and our opinion in so far as it relates tothe amounts and disclosures included in respect of the branch is based solely on thereport of such branch auditor.

(b) Note No. 37 (a) of the standalone financial statements describes the uncertaintiesand the impact of Covid-19 pandemic on the Company's operations and standalone financialstatements as assessed by the management. Further due to Covid-19 related lock downrestrictions management was able to perform year end physical verification of inventoryat certain locations subsequent to the year end. Also we were not able to physicallyobserve the verification of inventory that was carried out by the management.Consequently we have performed alternative procedures to audit the existence of Inventoryas per the guidance provided in SA-501 "Audit Evidence – Specific Considerationsfor Selected Items" and have obtained sufficient audit evidence to issue ourunmodified opinion on these standalone financial statements.

Our opinion is not modified in respect of these matters.

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 in terms of sub-section (11) of section 143 ofthe Act and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to usduring the course of audit we give in the Annexure ‘A' a statement on the mattersspecified in the paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act we report that:

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

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and proper returnsadequate for the purpose of our audit have been received from the branch not visited byus.

(c) The reports on the accounts of the branch office of the company audited under thesection 143(8) of the Act by branch auditors have been sent to us and have been properlydealt with by us in preparing this report.

(d) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Cash Flows and Statement of Change in Equity dealt with by thisReport are in agreement with the books of account and with the returns received from thebranch not visited by us.

(e) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended.

(f) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.

(g) As required by section 143(3)(i) of the Companies Act 2013 and based on thechecking of the books and records of the Company as we considered appropriate andaccording to the information and explanations given to us our separate report withrespect to the adequacy of the internal financial controls over financial reporting of theCompany and the operating effectiveness of such controls is as per Annexure ‘B'.

(h) With respect to the other matter to be included in the Auditors' report underSection 197(16) as amended: In our opinion and according to the information andexplanation given to us the managerial remuneration paid/provided during the current yearby the Company is in accordance with the provisions of Section 197 of the Act.

(i) 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 in our opinionand to the best of 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 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 includingderivatives contracts.

iii. There was no amount which was required to be transferred to the Investor Educationand Protection Fund by the Company.

For LODHA & CO. For S.S. KOTHARI MEHTA & COMPANY
Chartered Accountants Chartered Accountants
ICAI-FRN: 301051E ICAI-FRN: 000756N
N.K. LODHA Partner AMIT GOEL Partner
Membership No. 085155 Membership No. 500607
UDIN: 20085155AAAACA7671 UDIN: 20500607AAAADI8588
Place: New Delhi Date: June 10 2020 Place: New Delhi Date: June 10 2020

ANNEXURE "A" REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ONOTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS OF JINDAL STAINLESS (HISAR) LIMITED FOR THE YEAR ENDED MARCH 312020.

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

(b) The Company has a regular program of physical verification of its fixed assets bywhich fixed assets have been verified by the management according to the program ofperiodical physical verification in a phased manner which in our opinion is reasonablehaving regard to the size of the Company and the nature of its fixed assets. Thediscrepancies noticed on such physical verification were not material.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties (whichare included under the head ‘Property plant and equipment') are held in the name ofthe Company read with footnote (#) of Note No. 2 of the standalone financial statements.

ii. The inventories of the Company (except stock lying with the third parties and intransit) have been physically verified by the management at reasonable intervals. Furtherdue to Covid-19 related lock down restrictions management was able to perform year endphysical verification of inventory subsequent to the year end.

In our opinion the procedures of physical verification of inventory followed by themanagement are reasonable in relation to the size of the Company and nature of itsbusiness. Further we have performed alternative procedures for physical verificationdone subsequent to the year-end due to Covid-19 to audit the existence of Inventory asper the guidance provided in SA-501 "Audit Evidence – Specific Considerationsfor Selected Items" and have obtained sufficient audit evidence and the discrepanciesnoticed on such physical verification of inventory as compared to book records were notmaterial.

iii. The Company has granted loans unsecured to Companies covered in the registermaintained under section 189 of the Companies Act 2013

(Read with note no. 36(a) of the standalone financial statements):-

a) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that terms and conditions of aforesaidloans so granted are not prejudicial to the interest of the Company.

b) In respect of aforesaid loans repayment of principal & payment of interest hasbeen stipulated and repayment and receipts have not become due for payment as on March 312020 (read with footnote @ to note no. 47).

c) There were no overdue amounts remaining outstanding as at the year-end.

iv. According to the information explanations and representations provided by themanagement and based upon audit procedures performed we are of the opinion that inrespect of loans investments guarantees and security the Company has complied with theprovisions of the Section 185 and 186 of the Companies Act 2013.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of directivesissued by the Reserve Bank of India and provisions of sections 73 to 76 or any otherrelevant provisions of the Act and the Rules framed thereunder.

vi. We have broadly reviewed the books of account maintained by the company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148(1) of the Act in respect of the Company's products and services to which the saidrules are made applicable and are of the opinion that prima facie the prescribed recordshave been made and maintained. We have however not made a detailed examination of thesaid records with a view to determine whether they are accurate or complete.

vii. (a) According to the records of the Company the Company is generally regular indepositing undisputed statutory dues including provident fund employees' state insuranceincome tax goods and service tax duty of customs cess and other material statutory dueswith the appropriate authorities to the extent applicable and there are no undisputedstatutory dues payable as at March 31 2020 for a period of more than six months from thedate they become payable.

(b) According to the records and information & explanations given to us there areno dues in respect of Income tax and goods and service tax that have not been depositedwith the appropriate authorities to the extent applicable on account of any dispute andthe dues in respect of duty of customs duty of excise service tax sales tax and labourwelfare cess that have not been deposited with the appropriate authorities on account ofany dispute and the forum where the dispute is pending are given below:

Name of The Statute Nature of Dues Amount (Rs. in Crore) Period to which amount relates to Forum where dispute is pending
Central Excise Act Excise Duty 0.47 Jul'05 – Dec'07 High Court of Punjab & Haryana
2.66 2006-07 High Court of Punjab & Haryana
1.94 2014-17 Joint Commissioner Rohtak
0.02 Apr 95 - Jun 95 High Court New Delhi
6.58 Jan 99 - Dec 04 High Court of Punjab & Haryana
28.50 Jul 05 - Dec 07 Commissioner Rohtak
0.08 1994-95 Addl. Commissioner of Central ExciseRohtak
Central Excise Act Excise Duty 0.05 May 07 - Oct 07 High Court of Punjab &Haryana.
0.05 Jul 09 High Court of Punjab &Haryana.
8.83 May 04- Nov 04 High Court Hyderabad
74.16 July 09- Dec 13 Commissioner Vishakhapatnam
Customs Act 1956 Custom Duty 15.13 Mar 2014 – May 2018 Deputy Commissioner of Custom
Gurgaon
The Central Sales Tax 1956 Sales Tax 0.03 1993-94 High Court of Punjab & Haryana
Finance Act 1994 Service Tax 0.94 April 16 - June 17 High Court Orissa
Labour Welfare Fund Labour Welfare Cess 0.05 2006-2011 High Court AP

viii. In our opinion on the basis of audit procedures and according to the informationand explanations given to us the Company has not defaulted in repayment of dues tofinancial institutions banks government as applicable. There are no dues to debentureholders.

ix. On the basis of information and explanations given to us term loan were appliedfor the purpose for which the loans were obtained. No moneys have been raised during theyear by way of initial public offer or further public offer.

x. Based on the audit procedure performed and on the basis of information andexplanations provided by the management no fraud by the Company and no material fraud onthe Company by its officers or employees has been noticed or reported during the course ofthe audit.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company managerial remuneration has been paid/providedin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act.

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

xiii. According to the information and explanations and records made available by themanagement of the Company and audit procedure performed for transactions with the relatedparties during the year the Company has complied with the provisions of Section 177 and188 of the Act where applicable. As explained and as per records details of relatedparty transactions have been disclosed in the standalone financial statements as per theapplicable Indian Accounting Standards (Read with note no. 47).

xiv. According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year and hence reporting under clause 3 (xiv) of theOrder is not applicable to the Company.

xv. On the basis of records made available to us and according to information andexplanations given to us the Company has not entered into non-cash transactions with thedirectors or persons connected with him.

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

For LODHA & CO. For S.S. KOTHARI MEHTA & COMPANY
Chartered Accountants Chartered Accountants
ICAI-FRN: 301051E ICAI-FRN: 000756N
N.K. LODHA Partner AMIT GOEL Partner
Membership No. 085155 Membership No. 500607
Place: New Delhi Date: June 10 2020 Place: New Delhi Date: June 10 2020

ANNEXURE ‘B' TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS OF JINDAL STAINLESS (HISAR) LIMITED

Report on the internal financial controls over financial reporting under clause (i) ofsub-section 3 of section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of JINDALSTAINLESS (HISAR) LIMITED ("the Company") as of March 31 2020 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date in which are incorporated the Return for the year ended on the date audited bythe branch auditor of the Company's branch at Kothavalasa in Vizianagaram district AndhraPradesh.

Management's responsibility for internal financial controls

The Company's Board of Directors 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 (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by the Institute ofChartered Accountants of India (ICAI) and deemed to be prescribed under section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 standalone financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained and the audit evidence obtained bythe other auditor of the branch in terms of their reports referred to in the other mattersparagraph below is sufficient and appropriate to provide a basis for our audit opinion onthe Company's internal financial controls system over 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 authorizations ofmanagement 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 and based on the report of the branch auditor furnished to us theCompany has in all material respects an adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2020 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.

Other matter

Our aforesaid reports under section 143(3)(i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls over financial reporting in so far as itrelates to Return audited by the branch auditor of the Company's branch at Kothavalasa inVizianagaram district Andhra Pradesh.

Our opinion is not modified in respect of this matter with respect to our reliance onthe work done and the report of the other auditor.

For LODHA & CO. For S.S. KOTHARI MEHTA & COMPANY
Chartered Accountants Chartered Accountants
ICAI-FRN: 301051E ICAI-FRN: 000756N
N.K. LODHA Partner AMIT GOEL Partner
Membership No. 085155 Membership No. 500607
Place: New Delhi Date: June 10 2020 Place: New Delhi Date: June 10 2020

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