to the Members of
KnR constRUctions liMited
RePoRt on tHe standalone Financial stateMents opinion
We have audited the accompanying standalone Financial Statements of KnRconstRUctions liMited ("the Company") which comprise the Balance Sheet asat 31 March 2020 the Statement of Profit and Loss (including Other Comprehensive
Income) the Statement of Changes in Equity and Statement of Cash Flows for the yearthen ended and a summary of explanatory the significant information. (Hereinafterreferred to as the "Standalone Financial Statements"). In our opinion and to thebest of our information and according to the explanations given to us and based on theconsideration of reports of other auditors on separate financial statements of in respectjointoperations and management certified of four joint operations referred to in the OtherMatters paragraph below the aforesaid 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 accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2020 and its profit
(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 the Standards on
Auditing (SAs) specified under section 143(10) of the Companies
Act 2013. Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the 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 together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of theCompanies Act 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion on the standalone Financial Statements. emphasis of Matter
We draw attention to Note No. 54 of the standalone financial statements whichdescribes the uncertainties and the possible effects of Covid-19 on the operations of theCompany. 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 financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to becommunicated in our report.
|Key audit Matter ||How our audit addressed the Key audit Matter |
|a) Revenue Recognition of long term contracts || |
|The Company has significant revenue from construction contracts and long-term operating and maintenance agreements. These long-term contracts are often complex customised solutions and meet the definition of a contract as per Ind AS 115. ||Our revenue testing included both testing of the Company's controls as well as substantive audit procedures targeted at selected major long-term projects. Our substantive testing focused on estimates applied by management in the accounting. |
|Revenue related to these construction contracts is recognised using the percentage of completion method where progress is determined by comparing actual costs incurred to date with the total estimated costs of the project. Revenue recognition for construction contracts includes management judgment in the form of estimates which are subject to management experience and expectations of future events. The most important judgment relates to the estimated total costs of the project. ||Our procedures included among others things the following: |
|Revenue recognition of long-term contracts is a key audit matter in the audit due to the high level of management judgement involved in the project estimates. ||Ensured that the revenue recognition method applied was appropriate based on the terms of the arrangement; Agreed the total project revenue estimates to sales agreements including amendments as appropriate; |
| ||We obtained an understanding of the processes and tested relevant controls which impact the revenue recognition; |
| ||We assessed the reliability of management's estimates by comparing the actual results of delivered projects to previous estimates; |
|B) litigation and claims || |
|Considering the nature of the Company's operations it can be exposed to a number of litigations and claims. The recognition and measurement of provisions contingent liabilities and contingent assets as well as making the necessary disclosures in respect of litigation and claims requires significant judgment by the management in assessing the outcome of each legal case which is based on management's discussion with legal advisors. ||Our audit procedures included the following: evaluating the Company's policies procedures and controls in relation to litigation claims and provision assessments; independent enquiries to understand the background of each case legal position and the material risks that may impact the |
|Due to the significance of the litigations and claims and the difficulty in assessing and measuring the resulting outcome this is considered as a key audit matter. ||Company's standalone financial statements; and assessing reasonableness of judgment made by management determining the adequacy of the level of provisioning or disclosure in the standalone financial statements. |
nformation 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 Management
Discussion 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 financial statements or our knowledge obtained duringthe course of our audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the standalone Financial statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Financial
Statements that give a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in equity of theCompany in accordance with the Indian Accounting Standards prescribed under section 133 ofthe Act read with Companies (Indian Accounting Standards) Rules 2015 as amended andother accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records inaccordance 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 Standalone financial statements management doubt on the Company'sability to is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so. Those Board ofDirectors are also responsible for overseeing the
Company's financial reporting process.
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 audit material findings if individuallyincluding anyor in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken 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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional 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 the Companies Act 2013 we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such 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 as significant a going concern. If weconclude that a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the standalone financial statements or ifsuch disclosures are inadequate to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the standalone financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the significant audit and significant deficiencies in internalcontrol
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.
1. We did not audit the financial information of 10 joint operations included in theStatement whose financial information reflect total assets (before consolidationadjustments) of Rs. 28138.28 Lakhs as at March 31 2020 total revenue (beforeconsolidation adjustments) of Rs. 49241.11 Lakhsandtotalnetprofitafter tax (net)(before consolidation adjustments) of Rs. 1117.89 Lakhs for the year ended March 312020 as considered in the Statement. The financial information of these joint operationshave been audited by the other auditors whose reports has been furnished to us by themanagement and our opinion in so far as it relates to the amounts and disclosuresincluded in respect of these joint operations is based solely on the report of such otherauditors.
Our opinion on the Statement is not modified in respect of this matter with respect toour reliance on the work done and reports of such other auditors.
2. The Statement also includes the financial information of 4 joint operations whichhave not been audited whose financial information reflect total assets (beforeconsolidation adjustments) of Rs. 2577.19 Lakhs as at
31 March 2020 total revenue (before consolidation adjustments) of Rs. 1413.72 Lakhsand total net profit after tax (net) (before consolidation adjustments) of Rs. 71.53 Lakhsfor the year ended March 31 2020.
The financial information of these joint operations has been unaudited and has beenfurnished to us by the Management and our opinion on the Statement in so far as itrelates to the amounts and disclosures included in respect of these joint operations isbased solely on such unaudited financial information which is certified by management. Inour opinion and according to the information and explanation given to us by theManagement the financial information of these joint operations are not material to theCompany.
Our opinion on the Statement is not modified in respect of this matter with respect toour reliance on the financial information certified by the Management.
Report on other legal and Regulatory Requirements
A. 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 of theAct we give in the "annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the said order. B. As required by Section 143 (3) of the Act wereport that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid Standalone Financial Statements comply with the IndianAccounting Standards prescribed under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended and other accounting principles generallyaccepted in India.
e) On the basis of the written representations received from the directors as on March312020taken on record by the Board of Directors none of the directors are disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.
f) With respect to the adequacy of the internal financial control over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "annexure 2". Our Report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's financial controlsover financial reporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act 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 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact if any of pending litigations as at March 312020 on its financial position in its Standalone Financial
Statements Refer Note No. 37.
ii. The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For K.P.Rao & co.
Chartered Accountants Firm's Registration No. 003135S
Partner Membership No. 022812
Place: Bengaluru Date: June 11 2020
We RePoRt tHat;
1. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) A major portion of fixed assets have been physically verified programme ofverification which in our opinion assets provides for physical verification atreasonable interval having regard to the size of the Company and nature of its assets.According to the information and explanations given to us no material discrepancies werenoticed on such verification of fixed assets and have been properly dealt with in thebooks of account.
c) According to the information and explanations given to us the title deeds of theimmovable properties disclosed in the Note no. 3 & 3.1 to Standalone FinancialStatements held by the Company are in the name of the Company except following assets.
|Total No. of cases (lands) ||Whether leasehold/ freehold ||Gross block and net block as on 31-03-2020 ||Remarks |
| || ||(Rs. in Lakhs) || |
|54 || |
Lands are registered in the name of directors relatives of directors for and on behalf of the company due to restrictions in registration of lands in the name of the Company by the land laws of respective states in which the land is situated.*
*The Company has taken undertaking from respective parties for having no interest inthe lands.
2. According to the information and explanations given to us inventories have beenphysically verifiedat regular intervals by the Management during the year. In our opinionthe frequency of such verification is reasonable. No material discrepancies were noticedon such physical verification.
3. According to the information and explanations given to us the company has grantedunsecured loans to Subsidiary
Companies during the year and maximum amount involved during the period and the balanceof said loans were aggregating to Rs. 1855.24 Lakhs and Rs. 1037.11 Lakhs respectivelycovered in the register maintained under section 189 of the Companies Act 2013.
These loans have been given on "On Account" basis. In the absence ofagreements for these loans the terms and conditions and their impact on the interest ofthe Company cannot be ascertained. Hence the question of regularity of payment ofprincipal and interest does not arise.
4. In our opinion and according to the information and explanations given to us theCompany has not advanced any loan to any director given any guarantee provided anysecurity in connection with any loan taken by any director or made investment through morethan two layers of investment companies as per the provisions of section 185 and 186 ofthe Act. Accordingly reporting under clause (iv) of paragraph 3 of the Order is notapplicable.
5. In our opinion and according to the information and explanation given to us theCompany has not accepted deposits to which directions issued by the Reserve Bank of Indiaand the provisions of section 73 to 76 or any other relevant provisions of the CompaniesAct 2013 were applicable. Accordingly reporting under clause (v) of paragraph 3 of theOrder is not applicable.
6. The maintenance of cost records has been specified by the Central Government undersection 148(1) (d). We have broadly reviewed the books of account maintained by thecompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under section 148 of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have however not madea detailed examination of the cost records with a view to determine whether they areaccurate and complete.
7. According to the information and explanations given to us in respect of records ofstatutory dues: a) The Company is regular in depositing undisputed statutory duesincluding Provident Fund Employees'
State Insurance Income Tax Sales Tax Service Tax/ Goods and Services Tax Duty ofCustoms Duty of Excise Value Added Tax Cess and other statutory dues applicable to itwith the appropriate authorities.
Annexure 1 to the Independent Auditor's Report of even date on the Standalone Ind ASFinancial Statements of KNR Constructions Limited (Contd.)
b) There were no undisputed amounts payable in respect of Provident Fund EmployeesState Insurance Income Tax Wealth Tax Service Tax Duty of Customs Duty of ExciseCess and other statutory dues in arrears as at Mach 31 2020 for a period of more than sixmonths from the date they became payable. c) Disputed statutory dues that have not beendeposited on account of matters pending before appropriate authorities are as under :
|name of the statue ||nature of the dues ||amount (Rs. in lakhs) ||Period to which the amount relates ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income Tax ||Paid under protest ||FY 2006-07 ||Income Tax Appellate Tribunal Hyderabad |
|Income Tax Act 1961 ||Income Tax ||Paid under protest ||FY 2002-03 ||Income Tax Appellate Tribunal Hyderabad |
|Income Tax Act 1961 ||Income Tax ||4.60 ||FY 2000-01 ||Income Tax Appellate Tribunal Hyderabad |
|Income Tax Act 1961 ||Income Tax ||Paid under protest ||FY 2012-13 ||Income Tax Appellate Tribunal Hyderabad |
|Income Tax Act 1961 ||Income Tax ||Paid under protest ||FY 2013-14 ||Income Tax Appellate Tribunal Hyderabad |
|Income Tax Act 1961 ||Tax Deducted at Source ||9.86 ||FY 2009-10 ||Deputy Commissioner of Income Tax (TDS) Hyderabad |
|Income Tax Act 1961 ||Income Tax ||36.57 ||FY 2015-16 ||Deputy Commissioner of Income Tax Hyderabad |
|Income Tax Act 1961 ||Income Tax ||171.91 ||FY 2016-17 ||Deputy Commissioner of Income Tax Hyderabad |
|Income Tax Act 1961 ||Income Tax ||22.99 ||FY 2010-11 ||Commissioner of Income Tax (Appeals) Hyderabad |
|Income Tax Act 1961 ||Income Tax ||45.73 ||FY 2014-15 ||Deputy Commissioner of Income Tax Hyderabad |
|Income Tax Act 1961 ||Income Tax ||281.38 ||FY 2017-18 ||Deputy Commissioner of Income Tax Hyderabad |
|Andhra Pradesh Value Added Tax Act 2005 ||Value Added Tax ||Paid under protest ||FY 2010-11 ||Telangana Value Added Tax Appellate Tribunal |
|Andhra Pradesh Value ||Central Sales ||193.10 ||FY 2015-16 ||Additional Commissioner (Appeals) Hyderabad |
|Added Tax Act 2005 ||Tax || || || |
|Madhya Pradesh Value ||Entry Tax ||41.13 ||FY 2010-11 ||Commissioner (Appeals) Gwalior |
|Added Tax Act 2002 ||Entry Tax ||40.68 ||FY 2013-14 ||Additional Commissioner (Appeals) Gwalior |
| ||Entry Tax ||41.06 ||FY 2016-17 ||Additional Commissioner (Appeals) Gwalior |
|Odisha Sales Tax and VAT Laws ||Entry Tax ||28.87 ||FY 2009-10 to 11-12 ||Odisha High Court |
| ||Entry tax ||22.00 ||FY 2012-13 ||Joint Commissioner Appeals Bhubaneswar |
| || || ||to 14-15 || |
| ||Value Added ||171.81 ||FY 2012-13 || |
| ||Tax || ||to 14-15 || |
| ||Central Sales ||6.03 ||FY 2012-13 || |
| ||Tax || ||to 14-15 || |
|Finance Act 1994 ||Service Tax ||303.53 ||FY 2016- ||Assistant Commissioner (Audit) Central Tax |
| || || ||17 to June ||GST |
| || || ||2017 || |
8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of its dues to Banks & Financial Institutions.The Company has not issued debentures.
9. The Company has not raised any monies during the reporting period by way ofinitial public offer (including debt instruments) or further public offer. The Company hasnot raised any monies by way of term loans during the year.
10. According to the information and explanations given to us no fraud by or by itsofficersor employees on the Company has been noticed or reported during the year.
11. According to the information and explanations given to us and based on ourexamination of the records of the Company managerial remuneration has been paid/ providedduring the year in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Companies Act 2013.
12. In our opinion and according to the information given to us the Company is not aNidhi Company. Accordingly reporting under clause (xii) of paragraph 3 of the Order isnot applicable.
13. In our opinion and according to the information and explanations given to us andbased on our examination of the records all transactions with the related parties are incompliance with Section 177 and Section 188 of the Act where applicable and the detailshave been disclosed in the Standalone Financial Statements as required by the applicableaccounting standards.
14. According to the information and explanations given to us and based on ourexamination of the records the Company has not made any preferential allotment or privateplacement of shares or convertible debentures during the reporting period. Accordinglyreporting under clause (xiv) of paragraph 3 of the Order is not applicable.
15. In our opinion and according to the information and explanations given to us andbased on our examination of the records the Company has not entered into any non-cashtransactions with any directors or persons connected with him. Accordingly reportingunder clause (xv) of paragraph 3 of the Order is not applicable.
16. The Company is not required to be registered under Section
45-IA of the Reserve Bank of India Act 1934.
For K.P.Rao & co.
Chartered Accountants Firm's Registration No. 003135S
Partner Membership No. 022812
Place: Bengaluru Date: June 11 2020
to the Independent Auditor's Report of even date on the Standalone Financial Statementsof KNR Constructions Limited
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 KnRconstRUctions 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.
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 FinancialReporting issued by the Institute of Chartered Accountants of India". 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.
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 ICAIand deemed to be prescribed under section
143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operating
Our audit of internal financial controls overfinancialreporting included obtaining anunderstanding of internal financial controls overfinancialreporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the Standalone Financial Statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the
Company's internalfinancialcontrols system over financial reporting.
Meaning of internal Financial controls over Financial Reporting
A company's internalfinancialcontrol over financial reporting is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and thepreparation of Standalone 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 Standalone 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 ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the Standalone 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 effectiveness.detected.
Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internalfinancialcontrol overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2020 based ontheInternal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the "Guidance Noteon Audit of Internal Financial Controls over Financial Reporting issued by the Instituteof Chartered Accountants of India".
For K.P.Rao & co.
Chartered Accountants Firm's Registration No. 003135S
Partner Membership No. 022812
Place: Bengaluru Date: June 11 2020