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Larsen & Toubro Infotech Ltd.

BSE: 540005 Sector: IT
NSE: LTI ISIN Code: INE214T01019
BSE 00:00 | 03 Jul 1977.30 11.65
(0.59%)
OPEN

1975.00

HIGH

1997.95

LOW

1957.50

NSE 00:00 | 03 Jul 1978.25 15.50
(0.79%)
OPEN

1961.05

HIGH

1998.75

LOW

1957.05

OPEN 1975.00
PREVIOUS CLOSE 1965.65
VOLUME 10562
52-Week high 2049.40
52-Week low 1207.60
P/E 23.68
Mkt Cap.(Rs cr) 34,445
Buy Price 1976.00
Buy Qty 12.00
Sell Price 1977.30
Sell Qty 1.00
OPEN 1975.00
CLOSE 1965.65
VOLUME 10562
52-Week high 2049.40
52-Week low 1207.60
P/E 23.68
Mkt Cap.(Rs cr) 34,445
Buy Price 1976.00
Buy Qty 12.00
Sell Price 1977.30
Sell Qty 1.00

Larsen & Toubro Infotech Ltd. (LTI) - Auditors Report

Company auditors report

To

The Members of

Larsen & Toubro Infotech Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Larsen & ToubroInfotech Limited ("the Company") which comprise the balance sheet as at 31stMarch 2019 and the statement of profit and loss statement of changes in equity andstatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of 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 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 and its profit changes in equity and itscash flows for the year ended on that date.

Basis for 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 (I C A I) together with the ethical requirements that are relevant to our audit ofthe standalone financial statements under the provisions of the Companies Act 2013 andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

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. Wehave determined the matters below to be the key audit matters to be communicated in ourreport.

Revenue Recognition

Key Audit Matter Accuracy of recognition measurement presentation and disclosures of revenue and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers". Further onerous obligations in respect of fixed price contracts involves critical estimates.
New revenue accounting standard requires disclosures which involve collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date.
The application of the new revenue accounting standard (Ind AS 115) involves significant judgements/material estimates relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. Further in case of fixed price contracts estimated efforts is a critical estimate to determine revenues. This estimate has a high inherent uncertainty as it requires consideration of progress of the contract and efforts required to complete the remaining performance obligations.
Principal Audit Procedures We assessed the Company's process in relation to overall revenue recognition process. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
• Relating to implementation of the new revenue accounting standard specifically those relating to identification of the distinct performance obligations and determination of transaction price.
• Recording of efforts incurred and estimation of efforts required to complete the performance obligations.
• Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard.
• Tested the access and application controls pertaining to time recording allocation and control management systems which prevents unauthorised changes to recording of efforts incurred.
Principal Audit Procedures • Selected a sample of continuing and new contracts and performed the following procedures which included enquiry and observation reperformance and inspection of evidence in respect of operation of controls:
• Read analysed and identified the distinct performance obligations in these contracts.
• Compared such performance obligations with that identified and recorded by the Company.
• Reviewed contracts terms to determine the transaction price including any variable consideration to determine the appropriate transaction price for computing revenue and to test the basis of estimation of the variable consideration.
• Samples in respect of revenue recorded for time and material contracts were tested though a review of approved time sheets including customer acceptances subsequent invoicing and historical trend of collections and disputes.
• In respect of samples relating to fixed price contracts progress towards satisfaction of performance obligation used to compute recorded revenue was verified with actual and estimated efforts from the time recording and contracting systems.
• Performed a comparison of actual efforts incurred with estimated efforts to identify significant variations and verify whether those variations have been considered in estimating the remaining efforts to complete the contract.
• Reviewed unbilled revenues to identify possible delays in achieving milestones which require change in estimated efforts to complete the remaining performance obligations.
• Performed analytical procedures towards:
• reasonableness of revenue disclosed by type and service offerings.
• Reasonableness of incurred and estimated efforts.
• We reviewed the collation of information and the logic of the report generated from the management system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied after the balance sheet date.
Migration to new information systems
Key Audit Matter During the year Information Systems used for managing and recording transactions w.r.t. revenue HR and treasury operations were changed/upgraded. Impact of errors if any during the transition required evaluation.
The nature of business operations of the Company requires a high degree of reliance on the Information Technology systems. The audit approach relies on the effectiveness of automated controls and controls around interface of different systems. In a scenario of migration to new information systems during the year robustness of IT general and application controls are critical to ensure that changes to applications and underlying data are made in an appropriate manner. As a part of audit we need to ensure that the Company has implemented necessary preventive and detective controls across critical IT applications and infrastructure which are most relevant from the perspective of financial reporting.
Principal Audit Procedures We have reviewed the information systems migration process and Information Technology General Controls (ITGC) with the assistance of IT audit specialists our procedures included:
• Testing General IT Controls: Testing general IT controls around system access change management and computer operations within specific applications pertinent to the financial statements. We assessed whether appropriate policies are in place and adhered to through inspection of supporting evidence. Also assessed the operation of controls over changes or transactions and testing manual compensating controls such as reconciliations between systems and other information sources through re-performance or inspection.
• Testing Data Migration: We reviewed the management's processes around systems migration in order to ascertain how controls in existing information systems are mapped into new information systems. We also independently tested completeness validity and accuracy of transaction and master data migrated to new information system.
• Extended scope: Where general IT controls and compensating manual controls were inadequate or ineffective we performed additional substantive testing such as using extended sample sizes and performing data analysis to test the integrity of the transactional level data pertinent to the Company's financial statements.

Assessment of provisions and contingent liability in respect of compliance with variouslaws and regulations as applicable

Key Audit Matter Adequacy of provisioning and assessing contingent liabilities in respect of compliance with applicable l laws and regulations including Income tax assessments
The Company's operations are spread across several jurisdictions including those outside India requiring the Company to ensure compliance with relevant laws and regulations. Recognition of provisions and disclosure of contingent liabilities on account of potential claims in relation to same may require critical evaluation of legal positions/opinions taken by the Company involving complex matter and a high degree of professional judgment.
Furthermore the Company's SEZ unit is eligible for exemption under section 10AA of Indian Income Tax Act 1961. The Company may have some unsettled tax positions including matters under dispute on account of disallowance of exemption u/s 10A/10AA on profits earned by STPI/SEZ units on onsite export revenue. The evaluation involves significant judgement to determine the possible outcome of these cases.
Principal Audit Procedures • We have evaluated the design and operating controls in relation to the compliance tracker maintained by the Company with respect to compliance with local and international laws regulations.
• We read the summary of litigation matters provided by management and held discussions with the Company's legal counsel.
• We have also enquired with some of the Company's external legal advisors with respect to the matters and examined related correspondence including advices for foreign branch compliances and obtained an external legal confirmation wherever appropriate.
• In respect of provisions against litigation and the assessment of contingent liabilities we tested the calculation of the provisions/contingent liability assessment; we reviewed the assumptions against third party data where available and assessed the estimates against historical trends. We considered management's judgements on the level of provisioning/recognition of contingent liability as appropriate.
Investment in Subsidiaries
Key Audit Matter The carrying amount of the investments in subsidiaries held at cost less impairment represents 8.34 % of the Company's total assets are reviewed annually for impairment
Recoverability of investment in subsidiary undertakings
The carrying amount of investment is assessed based on financial performance of subsidiaries and projected cash flows where necessary. This activity requires significant management judgement and estimates.
Principal Audit Procedures • We compared the carrying amount of investments with the relevant subsidiary balance sheet to identify whether their net assets being an approximation of their minimum recoverable amount were in excess of their carrying amount and assessing whether those subsidiaries have historically been profit-making.
• For the investments where the carrying amount exceeded the net asset value compared the carrying amount of the investment with the expected value of the business based on a suitable multiple of the subsidiaries' earnings or discounted cash flow analysis.
• Tested the assumptions and understanding the cash flows based on our knowledge of the Company and the markets in which the subsidiaries operate; and
• We also considered the adequacy of disclosures in the financial statements relating to the valuation of investments in subsidiaries including those made with respect to judgments and estimates.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Business Responsibility ReportCorporate Governance and Shareholder's Information but does not include the standalonefinancial 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 materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 financialposition financial performance changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

Those charged with governance are also responsible for overseeing the Company'sfinancial reporting process.

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

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

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

• I dentify 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 control relevant to the audit in order todesign audit 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 on whetherthe company 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

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

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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the रAnnexure A' a statement on the mattersspecified in paragraphs 3 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 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 the Statement of Changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account.

d. In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards (Ind AS) specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014.

e. On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164(2) of the Act.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in 'Annexure B'. Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial 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 opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of 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 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 includingderivative contracts;

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

For B. K. Khare & Co.
Chartered Accountants
Firm's Registration Number - 105102W
Padmini Khare Kaicker
Mumbai Partner
May 2 2019 Membership No. 044784

Annexure A to the Independent Auditor's Report

(Referred To In Paragraph 1 Under रReport On Other Legal And Regulatory Requirements'Section Of Our Report Of Even Date On The Standalone Financial Statements Of Larsen &Toubro Infotech Limited For The Year Ended March 31 2019)

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

(b) The Company has a rotational program for verification of its fixed assets over aperiod of three years which in our opinion is reasonable having regard to the size ofthe Company and the nature of its assets. A portion of the fixed assets has beenphysically verified by the management of the Company during the year in accordance withthe above-mentioned program. No material discrepancies were identified on suchverification and have been properly accounted for in the books of account.

(c) According to the information and explanations given to us and to the best of ourknowledge and belief the title deeds of the immovable properties are held in the name ofthe Company.

2. The Company does not hold any physical inventories. Accordingly paragraph 3(ii) ofthe Order is not applicable to the Company.

3. According to the information and explanations given to us the Company has grantedunsecured loan to companies firms limited liability partnerships or other partiescovered in the register maintained under section 189 of the Act.

(a) The terms and conditions of the grant of such loans are not prejudicial to theCompany's interest;

(b) The schedule of repayment of principal and payment of interest has been stipulated;

(c) There is no overdue amount remaining outstanding as at the year end

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto loans and investments made.

5. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits to which the directives of the Reserve Bank of Indiaand the provisions of Sections 73-76 of the Act and the rules framed there under to theextent modified apply. Accordingly the provisions of clause 3(v) of the Order are notapplicable to the Company and no order has been passed by Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any court or any other tribunal.

6. According to the information and explanations given to us the central governmenthas not prescribed the maintenance of cost records under section 148(1) of the Act for anyof the services rendered by the Company. Accordingly paragraph 3(vi) of the Order is notapplicable to the Company.

7. (a) According to the records of the Company examined by us and information andexplanations given to us the Company is generally regular in depositing with theappropriate authorities undisputed statutory dues including Goods and Service TaxProvident Fund Employees' State Insurance Income Tax Customs Duty Cess and otherstatutory dues applicable to it with the concerned authorities. Also refer Note No. 34forming part of accounts.

(b) According to the information and explanations given to us dues of goods andservice tax income-tax sales tax service tax excise duty customs duty and value addedtax which have not been deposited on account of any dispute are as follows:

Name of Statute Nature of dues ' Million* Period to which amount relates Forum where pending
Central Sales Tax and local sales tax Acts Service tax Software exports and service income revenue considered as domestic sales and other classification disputes 11.16 FY2002-03 Maharashtra Sales Tax Tribunal Mumbai
Service tax demand under reverse charge mechanism on the Agency commission paid in foreign currency 1.68 FY 2008-09 to 2013-14 CESTAT
West Bengal Value Added Tax Demand raised based on subcontractor turnover 7.63 FY 2015-16 Senior Joint Commissioner Kolkata South Circle
Service Tax Disallowance of Input Tax Credit 143.85 FY 2008-09 to 2014-15 Appeal to be filed before CESTAT
Income-tax Act 1961 Disallowance of exemption under Income Tax 84.26 FY 2008-09 (AY 2009-10) ITAT
Income Tax Act 1961 Disallowance of exemption under Income Tax 0.18 FY 2010-11 (AY 2011-12) Commissioner (Appeals)
Penalty 131.38 FY 2006-07
(AY 2007-08)
Disputes regarding calculation of notional interest on transactions with related party and disallowance of FTC 1.21 FY 2010-11
(AY 2011-12)
Dispute regarding Disallowance of claim on the ground that it is allowable only for 10 consecutive Assessment years. 2.35 FY 2010-11
(AY 2011-12)
Disputes regarding short fall in tax deducted at source 5.14 FY 2010-11 and 2011-12 (AY 2011-12 and 2012-13) Hon'ble High Court
Disputes regarding exclusion of interest income from section 10A calculation addition of notional interest on transactions with related party and disallowance of FTC 2.08 FY 2008-09 Assessing Officer
(AY 2009-10) (Assistant Commissioner Of Income Tax)
Disallowance of ESOP discount 13.28 FY 2010-11 ITAT
(AY 2011-12)

* Net of pre-deposit paid in getting the stay/appeal admitted

8. Based on the records examined by us and according to the information andexplanations given to us the Company has not defaulted in repayment of dues to afinancial institution and bank. The Company has not taken any loans or borrowings fromgovernment and has not issued any debentures.

9. The Company did not raise any money by way of initial public offer further publicoffer (including debt instruments) or term loan during the year. Accordingly paragraph3(ix) of the Order is not applicable to the Company.

10. Based on the records examined by us and according to the information andexplanations given to us there were no material frauds by the Company or on the Companyby its officers or employees noticed or reported during the year.

11. Based on the records examined by us and according to the information andexplanations given to us the Company has paid/provided managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Companies Act 2013.

12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and hence paragraph 3(xii) of the Order is not applicableto the Company.

13. Based on the records examined by us and according to the information andexplanations given to us transactions with related parties are in compliance withsections 177 and 188 of the Act where applicable and details of such transactions havebeen disclosed in the standalone financial statements as required by the applicableaccounting standards.

14. Based on the records examined by us and according to the information andexplanations given to us the Company has not made any preferential allotment or privateplacement of shares or partly convertible debentures during the year. Accordinglyparagraph 3(xiv) of the Order is not applicable to the company.

15. Based on the records examined by us and according to the information andexplanations given to us the Company has not entered into non-cash transactions withdirectors or persons connected with them. Accordingly paragraph 3(xv) of the Order is notapplicable.

16. In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For B. K. Khare & Co
Chartered Accountants
Firm Registration No. 105102W
Padmini Khare Kaicker
Partner
Membership No. 044784
Mumbai
May 2 2019

Annexure B to the Independent Auditor's Report

Referred to in paragraph of our report of even date on the standalone financialstatements of Larsen & Toubro Infotech Limited for the year ended March 31 2019.

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Larsen& Toubro Infotech Limited ("the Company") as of March 31 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the 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 ("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 the respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 ("theAct").

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 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 judgement including the assessment of the risks ofmaterial misstatement of the 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 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 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls 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 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 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For B.K. Khare & Co.
Chartered Accountants
Firm Registration No. 105102W
Padmini Khare Kaicker
Partner
Membership No. 044784
Mumbai
May 2 2019