The Members of
Mahanagar Gas Limited
Report on the Audit of the Ind AS Financial Statements
l. We have audited the accompanying Ind AS financial statements of Mahanagar GasLimited ("the Company") which comprise the Balance sheet as at March 31 2020the Statement of Profit and Loss including the statement of Other Comprehensive Incomethe Cash Flow Statement and the Statement of Changes in Equity for the year then endedand notes to the Ind AS financial statements including a summary of significantaccounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2020 its profitincluding other comprehensive income its cash flows and the changes in equity for the yearended on that date.
Basis for Opinion
2. We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the 'Auditor'sResponsibilities for the Audit of the Ind AS Financial
Statements' section of our report. We are independent of the Company in accordance withthe 'Code of Ethics' issued by the Institute of Chartered Accountants of India togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Ind AS financial statements.
Key Audit Matters
3. Key audit matters are those matters that in our professional judgement were ofmost significance in our audit of the financial statements of the financial year endedMarch 31 2020. These matters were addressed in the context of our audit of the Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below our description of how ouraudit addressed the matter is provided in that context.
4. 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 Ind AS financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Ind AS financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying Ind AS financial statements.
|Key audit matters ||How our audit addressed the key audit matter |
|Contingencies: Raigarh Minimum Work Programme Commitment || |
|(as described in notes 31.8 containing details of contingencies in the financial statements) || |
|The Company has a commitment to achieve MWP for its Raigarh || We read the copies of communication exchanged between PNGRB and the Company during the year. We have compared the said communication with the appropriateness of disclosure in the financial statements. |
|Geographical Area (GA) as per the PNGRB authorization letter dated April 01 2015 under the PNGRB (Authorizing Entities to Lay Operate or Expand City or Local Natural Gas Distribution || We performed inquiries with the in-house legal counsel on the legal evaluation of the PNGRB show cause letter including the legal advice obtained by the Company in the previous year which holds good even in the current situation and understood their interpretation of the implications on the Company and obtained a specific representation on the management's interpretation and implication. |
|Networks ((GSR 196 (E)) Regulations 2008. The commitment was to be achieved by March 2020 with yearly rest as stated in the authorization letter. The Company has provided a performance bank guarantee amounting to H 10500 lakhs against this commitment to PNGRB. || We obtained and discussed with the management and Board of Directors on its ability to achieve the commitment as per the remedial action plan. |
|Till March 31 2018 the Company was unable to achieve the cumulative MWP target and basis the meeting with PNGRB representatives dated 12th March 2018 and the Show Cause || We evaluated the disclosures in the financial statements with the representations given by the management. |
|Notice received from PNGRB dated July 23 2018 the Company submitted the remedial action plan on August 2 2018 to achieve the target by March 31 2020 with revised yearly rest and had achieved its cumulative targets as per revised plan for domestic connections till March 31 2019 however it had not achieved the cumulative target for steel inch km. || |
|Subsequently during the current year considering the inability to complete the stated obligations PNGRB had asked the Company to submit a revised catch up plan for the next 2 years i.e till March 2022 which was submitted by the Company. || |
|The Company till March 31 2020 has completed its obligations for domestic connections and the steel inch km as per this revised plan. || |
|Considering the uncertainty the Company has disclosed the matter as a contingent liability as at March 31 2020 as there has been no further communication received from PNGRB in this matter. Further COVID 19 induced lockdown may impact the execution of the revised catch up plan. || |
|This area is significant to our audit since the encashment of bank guarantee is dependent on the Company achieving the targets as committed to the PNGRB as per the revised remedial plan and any further extension thereof including PNGRBs' view of such default. || |
|Due to the complexity involved in the execution of the MWP the management's judgement regarding completion of MWP as per revised plan and measurement of provisions for this matter is inherently uncertain and might change over time as the work on MWP progresses. Accordingly it has been considered as a key audit matter. || |
|Impairment of slow moving/non-moving projects lying in Capital Work-in-Progress || |
|(as described in note 2.2(b) of the significant accounting policies and note 3 for details and movement in capital work-in-progress in the financial statements) || |
|As at March 31 2020 the Company has H 48652.99 lakhs of Capital Work-in-Progress. ||Our audit procedures among others included the following: |
|The Company's spending on Capital Work-in-progress is material as indicated by the total value as at date. The assessment and the timing of put to use of the asset as set out in Ind AS 16 Property || Assessed the design and implementation and tested the operating effectiveness of key controls over the management review of capital work in progress. |
|Plant and Equipment' requires judgement and is dependent on the completion of projects after obtaining all necessary approvals. || We obtained the list of delayed projects from the management and on a sample basis obtained reasons of the delay and the expected capitalization dates from the management after considering the delays expected on account of the current pandemic. |
|The Company has long outstanding capital work-in progress relating to old slow/nonmoving projects which have been delayed because several internal and external factors. || For assets capitalized during the year we considered the planned vs actual capitalization dates to test the management's assessment of expected capitalization dates. |
|Further on account of the COVID 19 induced lockdown further delays in completing these projects are expected. || We tested management's assessment of indicators of impairment of old projects as may be required and the write off's made in the current year. |
|As a result this is considered as a key audit matter with focus on certain slow moving/non moving projects where the risk of assessment of impairment of such items was deemed higher because of the complexity of the specific project's and the delays involved ||. For old projects capitalized during the year we tested on sample basis to determine that the useful life of the asset was adjusted to reflect the wear and tear of such assets. |
| || For capital inventory forming part of Capital work in progress we assessed the allowance for old obsolescence created basis the allowance policy on aged inventory approved by the Board. Further we have tested the accuracy of the ageing analysis of inventories on a sample basis. |
|Contingencies : Uran Trombay Transportation Tariff Matter || |
|(as described in notes 31. 9 containing details of contingencies of the financial statements) || |
|The Company has entered into an agreement with GAIL (India) ||Our audit procedures among others included the following: |
|Limited for supply of Natural Gas. which is being supplied by ONGC to GAIL at ONGC Trombay. ONGC is transporting its own gas from ONGC Uran to Trombay through its Uran Trombay Natural Gas Pipeline (UTNGPL). || We evaluated the design and tested the operating effectiveness of controls in respect of the identification and evaluation of claims proceedings and investigations at different levels and the recording and continuous re-assessment of the related contingent liabilities and disclosures. |
|The Company has certain disputes with GAIL with respect to applicability of transportation tariff of UTNGPL as levied retrospectively from 20 November 2008 till 31 March 2020 of H 22332.14 lacs which has not been provided in the books of accounts or paid to GAIL till date. || We performed inquiries with the in-house legal counsel on the legal evaluation of the litigation. |
|The dispute was being discussed at the Appellate Tribunal for Electricity (APTEL) which has been referred back to PNGRB to consider several facts before concluding on the matter. || We have tested the underlying computation of the management in relation to the measurement of the contingency. |
|On March 18 2020 PNGRB ruled the case against the Company and the company subsequently in April 2020 have filed an appeal against the order with APTEL and a writ petition with the Delhi High Court. || We have obtained written legal confirmation of litigation claims from the legal counsel and have also relied on the written legal opinion obtained by the Company from an independent legal counsel for the matter relating to their expectations of the company's prospects in this case and have evaluated the conclusions as said in the legal opinion with the current treatment and disclosures given in the financial statements |
|The claims made by the Company involves complex estimation and the Company is required to assess the need to make provision or disclose a contingency considering the underlying facts of the litigation and its probability of winning the case at the APTEL. The Company has disclosed this fact as at contingent liability as at the balance sheet date. || We evaluated the disclosures in the financial statements |
|Due to the complexity involved in the litigation the management's judgement and assessment of the outcome of the matter and the measurement of provisions is inherently uncertain and might change over time as the legal case progresses. Accordingly the legal dispute has been considered as a key audit matter. || |
5. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included the annual report but does not include theInd AS financial statements and our auditor's report thereon.
Our opinion on the Ind AS financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.
In connection with our audit of the Ind AS financial statements our responsibility isto read the other information and in doing so consider whether such other information ismaterially inconsistent with the Ind AS financial statements or our knowledge obtained inthe audit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Responsibilities of Management for the Ind AS Financial Statements
6. 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 Ind AS financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting (Ind AS) specified under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error .
7. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Ind AS Financial Statements
8. Our objectives are to obtain reasonable assurance about whether the Ind AS 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 Ind AS financial statements.
9. 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 Ind AS financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143 (3)(i) of the Act we are also responsible for expressing our opinion on whether the Companyhas adequate internal financial controls system with reference to financial statements inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern . If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the financial statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.
Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the under lying transactions and events in a manner that achieves fairpresentation.
10. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
11. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
12. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements forthe financial year ended March 31 2020 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
13. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure 1 a statement on the matters specified inparagraphs 3 and 4 of the Order.
14. 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 including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;
(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Ind AS financial statements and theoperating effectiveness of such controls refer to our separate Report in "Annexure2" to this report;
(g) In our opinion the managerial remuneration for the year ended March 31 2020 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 Ind AS financial statements - refer note 31.9 to the Ind AS financialstatements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For S R B C & CO LLP
ICAI Firm Registration Number: 324982E/E300003 per Vikram Mehta
Membership Number: 105938 UDIN: 20105938AAAACN8638 Place of Signature: Mumbai Date:June 10 2020
Annexure 1 referred to in paragraph 13 of our report of even date
Re: Mahanagar Gas Limited ('the Company')
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification of all assets except for undergroundassets in relation to the gas distribution network which cannot be physically verified.The programme for physical verification in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. No material discrepancies were noticedon such verification.
(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the company.
(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii) (a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities given in respect of whichprovisions of section 185 and 186 of the Companies Act 2013 are applicable and hence notcommented upon.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules. 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the sale of natural gas and are ofthe opinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income-taxsales-tax service tax duty of custom duty of excise value added tax cess GST andother statutory dues applicable to it.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund. employees state insurance income-tax. servicetax sales-tax duty of custom duty of excise value added tax goods and service tax.cess and other statutory dues were outstanding at the year end. for a period of more thansix months from the date they became payable.
(c) According to the records of the Company the dues outstanding of income-taxsales-tax service tax excise duty on account of any dispute are as follows:
|Name of the Statuate ||Nature of Dues ||Amount J in lakhs ||Period to which the amount related ||Forum where the dispute is pending |
| || ||316.81 ||March 2001 - December 2004 ||High Court |
| || ||3554.55 ||July 2005 - April 2016 ||CESTAT/CESTAT (Appeal) |
| || ||1778.19 ||April 2014 - April 2016 ||Commissioner / Commissioner (Appeal) |
|Central Excise Act 1944 ||Excise Duty ||247.85 ||March 2010 - July 2017 ||Joint Commissioner/ Joint Commissioner (Appeals) |
| || ||173 .92 ||October 2014 - April 2017 ||Assistant Commissioner |
| || ||298.47 ||April 2014 - April 2016 ||Additional Commissioner |
| || ||7.74 ||Jan 2016 - April 2017 ||Superintendent of Central Goods and Service Tax |
| || ||34.09 ||May 2005 - September 2015 ||CESTAT/CESTAT (Appeal) |
|Central Excise Act ||Service ||67.82 ||April 2006 - September 2015 ||Commissioner/Commissioner (Appeal) |
|1944 ||Tax ||18.20 ||October 2015 - March 2017 ||Deputy Commissioner |
| || ||4.10 ||October 2015 - March 2017 ||Assistant Commissioner |
|Maharashtra Value Added Tax Act 2002 ||Sales Tax ||354.38 ||April 2006 - March 2011 ||Joint Commissioner/ Joint Commissioner (Appeals) |
|Income Tax Act 1961 ||Income Tax ||1431.26 ||AY 2002-2003 to AY 2016-2017 ||Commissioner of Income Tax / Commissioner of Income Tax (Appeals) |
| || ||13.05 ||AY 2005-2006 ||Income Tax Assessing Office |
(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans to government. The Companydid not have any outstanding loans or borrowing dues in respect of a financial institutionor bank or dues to debenture holders during the year.
(ix) According to the information and explanations given by the management the Companyhas not raised any money by way of initial public offer / further public offer/ debtinstruments and term loans hence reporting under clause (ix) is not applicable to theCompany and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no material fraud onthe company by the officers and employees of the Company has been noticed or reportedduring the year.
(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.
(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.
(xv) According to the information and explanations given by the management the Companyhas not entered into any non- cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act. According to the information and explanations given to us theprovisions of section 45 -IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.
For S R B C & CO LLP
ICAI Firm Registration Number: 324982E/E300003 per Vikram Mehta Partner
Membership Number: 105938 UDIN: 20105938AAAACN8638 Place of Signature: Mumbai Date:June 10 2020
Annexure 2 Report on the Internal Financial Controls under Clause (i) of Sub- section 3of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of MahanagarGas Limited ("the Company") as of March 31 2020 in conjunction with our auditof the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the 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 the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these financial statements based onour audit. We conducted our audit in accordance with the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting (the "Guidance Note") andthe Standards on Auditing as specified under section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these financial statements was established and maintained andif such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control s over financial reporting with reference to thesefinancial statements and their operating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internalfinancial controls over financial reporting with reference to these financial statementsassessing 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 internal financial controls over financialreporting with reference to these financial statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference to theseFinancial Statements
A company's internal financial control over financial reporting with reference to thesefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial control over financial reporting with reference to these financialstatements 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 WithReference tothese Financial Statements
Because of the inherent limitations of internal financial controls over financialreporting with reference to these financial statements including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls over financial reporting with reference to these financialstatements to future periods are subject to the risk that the internal financial controlover financial reporting with reference to these financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.
In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting with reference to these financial statements and suchinternal financial controls over financial reporting with reference to these financialstatements were operating effectively as at March 31 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
For S R B C & CO LLP
ICAI Firm Registration Number: 324982E/E300003
per Vikram Mehta
Membership Number: 105938 UDIN: 20105938AAAACN8638
Place of Signature: Mumbai Date: June 10 2020