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Kiri Industries Ltd.

BSE: 532967 Sector: Industrials
NSE: KIRIINDUS ISIN Code: INE415I01015
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VOLUME 50727
52-Week high 612.40
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Mkt Cap.(Rs cr) 1,768
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Sell Price 529.90
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OPEN 473.70
CLOSE 471.95
VOLUME 50727
52-Week high 612.40
52-Week low 188.10
P/E
Mkt Cap.(Rs cr) 1,768
Buy Price 529.60
Buy Qty 662.00
Sell Price 529.90
Sell Qty 184.00

Kiri Industries Ltd. (KIRIINDUS) - Auditors Report

Company auditors report

Tc

The Members cf Kiri Industries Ltd.

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Kiri Industries Ltd("the Company") which comprise the Balance Sheet as at March 31 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 the profit including totalcomprehensive income changes in equity and the cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SA's) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Emphasis of matter

1. We draw attention to various court cases and judgments in relation to disputesbetween Kiri Industries Ltd. (KIL) and DyStar Global Holdings (Singapore) Pte. Ltd.(DyStar) & Senda International Capital Ltd. (Senda)

• Minority oppression suit filed by Kiri Industries Ltd ("theCompany/KIL") and Judgment by Singapore International Commercial Court.

The company had filed minority operation suit in June 2015 in Singapore High Courtagainst Senda and DyStar and also against nominated directors on board of DyStar. Lateron the suit was transferred to Singapore International Commercial Court (SICC) vide suitSIC No. 4 of 2017. In the judgment released by SICC on July 03 2018 the court remarkedthat Senda had committed numerous acts of minority oppression against the company andordered a buy-out of KIL's 37.57% stake in DyStar. The court has further ordered that thelosses caused to DyStar by Senda's oppressive acts be written back into DyStar's value todetermine fair value of KIL's stake in DyStar.

DyStar and Senda filed appeals before Supreme court of Singapore against SICC ordervide case no. CA 122 of 2018. Hearing of appeal has taken place before court of appeal on9th April 2019. The Supreme court pronounced judgment on 29th May 2019 upholding thedecision of SICC and dismissed the appeal with orders to costs filed by Senda. Hence KIL'sminority oppression suit and original judgment of SICC dated July 03 2018 has beenupheld.

Senda and DyStar has also appealed against the dismissal part of the counter claimsagainst KIL and alleged breaches of Non-competence and non-solicitation clauses in ShareSubscription and Shareholders Agreement (SSSA). These appeals were allowed with costsagainst KIL and Mr. Manish Kiri. The SICC will assess the damages caused to DyStar in thenext hearing.

Further the valuation exercise to value KIL's 37.57% stake in DyStar is in process andSICC will hear the matter for finalization of valuation in due course.

• Winding up application by DyStar:

As per SICC order dated July 03 2018 KIL has to pay a sum of Euro 1.7 million towardsProcess Technology Development Fees and SGD 443813 towards Audit costs to DyStar. In thisconnection DyStar has filed winding up application with Singapore High Court on 22ndJanuary 2019 vide case no. HC/CWU 15/2019. The said application of DyStar is pending withHigh Court of Singapore.

• The company has also filed Civil suits against DyStar Senda Longsheng MSLgroup and their respective directors / officers.

2. We draw attention to Note. No. 27 pertaining to Other Current Liabilities. Itincludes liability to pay Euros 1.7 mn (INR 13.46 Crores) and SGD 443813 to DyStar forProcess Technology Development fees is capitalized with fixed asset. As per SICC orderdated July 03 2018 KIL has to pay a sum of Euro 1.7 million towards Process TechnologyDevelopment Fees and SGD 443813 towards Audit costs to DyStar. In this connection DyStarhas filed winding up application with Singapore High Court. The said application of DyStaris pending with High Court of Singapore. However the management of KIL has decided to paythe entire sum along with interest to DyStar. The said liability since crystallised iscapitalized in Fixed assets.

Our Opinion is not modified in respect of the above matters.

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. Against Key audit matter our description of how ouraudit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the Standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matter below providethe basis

Key Audit Matters

SN Key Audit Matter Auditor's Response
1 Recognition measurement presentation and disclosures of revenues from operations in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard): Our Audit procedure included the following:
The application of the new revenue accounting standard involves in addition certain other things recognition of revenue when control of goods or services are transferred to the customer at an amount that reflects the consideration to which the company expects to be entitled in exchange. • Evaluation of revenue recognition criteria of the company and determination of existence of any material and significant deviation from applicable accounting standards.
• Assessment of effectiveness of internal control of the company with respect to revenue recognition.
The company operates in two geographical segments i.e. domestic and export. According to the company revenue recognition criteria is different for each segment and further depends on the terms and conditions of the contracts with customers within the segment. • Test checks of revenue recognized on the basis of terms and conditions of the contracts for measurement and its accuracy.
Further revenue is regarded by management as most important Key performance indicator. • Review of sample customer accounts for any variation in recognition.
Accordingly revenue was determined as Key Audit Matter.
2 Inventory of Raw material and Finished Goods To address the matter our audit procedure included amongst others:
We refer to Significant accounting policies on inventory and Note. No. 8 on inventory.
• Assessing the compliance of accounting policies over inventory with applicable accounting standards.
Inventories are considered as Key Audit Matter due to nature of business technical indicators governing inventory valuation size of Balance sheet and because inventory valuation involves management judgment. According to accounting policy followed by the company inventories are valued at lower of cost or market value. Cost comprise in addition to other things overheads related to material labour and other overheads. The company has specific procedures to identify risk for obsolescence and valuation of inventories. • Assessing the inventory valuation process and practices.
• Assessing the analysis and assessment made by management with respect to slow moving or obsolete stock.
• Discussion with those charged with responsibility of overlooking inventory management process.
• Expert opinion obtained by the company on the technicalities of matter.
• Justification of management estimates and Judgments.
• Assessing the effectiveness of perpetual and physical inventory verification process.
3 Installation and commissioning of Thyonyl Chloride plant and Other Intermediates and Basic Chemicals To address the matter our audit procedure included amongst others:
We refer to Note. No. 2 on Fixed assets. • Assessing the compliance of accounting policies of addition to fixed assets with compliance of applicable accounting standards.
Installation and capitalisation of new plants are considered as Key Audit matters due to value involved process and documents involved and effect on bottom line of the company. • Assessment of management judgment with respect to factors affecting capitalisation.
Any addition in fixed assets in addition to increase in capacity and generation of revenues affects charge of depreciation as well as certain other indirect expenses. • Expert opinion obtained by the company on the technicalities of matter viz. installation erection commissioning and trial run.
• Justification of management estimates and Judgments involved.
Further capitalisation involves management judgment w.r.t factors affecting capitalisation recognition of revenues generated from new plants sustainability of operations absorption of expenses and categorisation of addition. • Assessing the effectiveness of perpetual and physical inventory verification process.

We have determined that there are no other Key Audit Matters to communicate in ourreport.

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

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information we are required to report that fact. We have nothing to reportin this regard.

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

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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

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

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

As part of an audit in accordance with Standards on Audit (SAs) we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

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

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by 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 financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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

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

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by Central Government of India in terms of sub-Section (11) of section 143 of theAct we give in "Annexure-1" a statement on the matters specified in paragraphs3 and 4 of the Order to the extent applicable.

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 purpose of our audit;

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

c. The Balance Sheet Statement of Profit and Loss including Statement of othercomprehensive income Cash Flow Statement and the Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;

d. In our opinion the aforesaid Standalone Ind AS financial statement comply with theIndian Accounting Standards specified under section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;

e. On the basis of written representations received from the directors as on March 312019 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of section 164(2) of theAct.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone financial statements and theoperating effectiveness of such controls refer to our separate report in"Annexure-2" to this report.

g. In our opinion the Managerial remuneration for the year ended March 31 2019 hasbeen paid/ provided by the company to its directors in accordance with the provisions ofSection 197 read with Schedule V to the Act.

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 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 on long-term contracts including derivativecontracts.

iii. There has been no delay in transferring amounts required to be transferred to theInvestors Education and Protection Fund by the company.

For Pramodkumar Dad & Associates
Chartered Accountants
CA Pramod Dad
Partner
Place: Ahmedabad MRN: 038261
Date: May 29 2019 FRN: 115869W

Annexure to the Independent Auditor's Report

Annexure - 1 to The Independent Auditor's Report to members of Kiri Industries Ltd forthe year ended 31st March 2019

(Referred to in Paragraph 1 under "Report on Other Legal and RegulatoryRequirements" section of our report of even date on the Standalone Ind AS financialstatements of the company for the year ended 31st March 2019)

On the basis of such checks as we considered appropriate according to the informationand explanation given to us by the management and on the basis of examination of books ofaccounts during the course of our audit we report that:

i. a) The company has maintained proper records

showing full particulars including quantitative details and situation of its fixedassets.

b) The company is in the process of conducting physical verification of Fixed assetsfor the year.

c) All the title deeds of immovable properties are held in the name of the companyexcept a plot of an Agricultural Land intended for Industrial purpose held in the name ofthe Chairman of the company in his fiduciary capacity as per section 88 of the IndianTrust act 1882 pending necessary approval for conversion of agricultural land intonon-agricultural land.

ii. a) Inventories have been physically verified during the year by the management; and

b) No material discrepancy was noticed on physical verification of stocks by themanagement.

iii. The company has not granted any loans secured or unsecured to companies firmsor other parties listed in the register maintained under Section 189 of the Companies Act2013. Consequently the provisions of clauses 3(a) 3(b) and 3(c) of the order are notapplicable to the Company.

iv. The company has complied with the provisions of section 185 and 186 of theCompanies Act 2013 in respect

of grant of loans making investments and providing guarantees and securities asapplicable.

v. The company has not accepted any deposits during the concerned financial year undersection 73 to 76 or any other relevant provision of the companies act during the concernedfinancial year.

vi. We have been informed that maintenance of cost records under sub-section 1 ofsection 148 of the Companies Act 2013 is mandatory for the company and such records aremaintained by the company. However we have not made the detailed examination of the costrecords with a view to determine whether they are accurate or complete.

vii. a) According to the records of the company undisputed

statutory dues including Provident Fund Investor Education and Protection FundEmployees' State Insurance Income-tax GST Sales-tax Wealth Tax Service Tax CustomDuty Excise Duty cess to the extent applicable and any other statutory dues havegenerally been regularly deposited with the appropriate authorities. According to theinformation and explanations given to us there were no outstanding undisputed statutorydues as on 31st of March 2019 for a period of more than six months from the date theybecame payable.

b) There are no disputed statutory dues that have not been deposited on account ofdisputed matters pending before appropriate authorities. According to the information andexplanation given to us the dues outstanding with respect to income tax GST sales taxservice tax value added tax customs duty excise duty on account of any dispute are asunder:

Sr No. Name of the Statute Section under which dispute is pending Period to which amount relates (FY) Amount (INR in Lakhs) Forum where the dispute is pending
1 The Income Tax 143 (3) 2002-03 36.99 Income Tax Appellate Tribunal
Act 1961 143(3) rws 263 2002-03 7.57 Commissioner of Income Tax (Appeal)
143 (3) rws 147 2007-08 4.78 Income Tax Appellate Tribunal
143 (3) 2008-09 21.18 Income Tax Appellate Tribunal
143 (3) 2009-10 19.89 Income Tax Appellate Tribunal
271(1)(c) 2009-10 0.88 Income Tax Appellate Tribunal
143 (3) 2010-11 316.06 Income Tax Appellate Tribunal
2 The Central CENVAT Refund 2009-10 341.08 High court
Excise Act 1944 2009-10 83.74 Central Excise and Service Tax Appellate Tribunal
2010-11 138.55 Central Excise and Service Tax Appellate Tribunal
2010-11 116.76 High Court
2010-11 153.73 High Court
Similar Goods 2010-11 344.00 Central Excise Commissioner
2011-12 4.09 Central Excise Commissioner
Outward Transportation of Finished Goods 2013-14 2.17 Central Excise Commissioner
3 The Gujarat VAT Act 2003 VAT Liabilities 2007-08 62.39 Gujarat Value Added Tax Tribunal

viii. The Company has not defaulted in repayment of dues to any bank. The company hasnot borrowed from financial institution government or debenture holder during the year.

ix. The Company has not raised money through initial public offer nor taken any termloan during the year. Hence the requirement of application of funds for the purpose forwhich these were borrowed does not arise.

x. No material fraud on or by the Company has been noticed or reported during the yearnor have we been informed of such case by the management.

xi. During the year under review the company has paid managerial remuneration inaccordance with the requisite approvals mandated by the provisions of the section 197 readwith schedule V to the companies act.

xii. The company is not Nidhi Company therefore provisions

of clause 3 (xii) of the order are not applicable.

xiii. The transactions with related party are in compliance with sections 177 and 188of the Companies Act 2013.

xiv. The Company has made preferential allotment to a firm of promoter group by way ofconversion of share warrants into equity shares for which the requirements of section 42of the companies act 2013 and SEBI Guidelines have been complied with and the amountraised have been used for the purpose for which funds were raised in the year of receipt.

xv. The Company has not entered into non-cash transaction with directors or personconnected with them during the year.

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

For Pramodkumar Dad & Associates
Chartered Accountants
CA Pramod Dad
Partner
Place: Ahmedabad MRN: 038261
Date: May 29 2019 FRN: 115869W

Annexure to the Independent Auditor's Report (Contd.)

Annexure - 2 to The Independent Auditor's Report to members of Kiri Industries Ltd. forthe year ended 31st March 2019

(Referred to in Paragraph 2(f) under "Report on Other Legal and RegulatoryRequirements" section of our reports of even date on the Standalone Ind AS financialstatements of the company for the year ended 31st March 2019.)

Report on The Internal Financial Controls Under Clause (I) of Sub-Section 3 of Section143 of The Companies Act 2013 ("The Act")

We have audited the internal financial controls over financial reporting of KiriIndustries Ltd. ("the Company") as of March 31 2019 in conjunction with ouraudit of the Standalone Ind AS financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the 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 Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' 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 ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting 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 system over financial reporting and their operatingeffectiveness.

Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial

controls over financial reporting assessing the risk that a material weakness existsand testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk. The procedures selected depend on the auditor's judgmentincluding the assessment of the risks of material misstatement of the Ind AS financialstatements whether due to fraud or error.

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

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that

1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Ind AS financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and

3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial

reporting and such internal financial controls over financial reporting were operatingeffectively as at March 31 2019 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.

For Pramodkumar Dad & Associates
Chartered Accountants
CA Pramod Dad
Partner
Place: Ahmedabad MRN: 038261
Date: May 29 2019 FRN: 115869W

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