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Manali Petrochemicals Ltd.

BSE: 500268 Sector: Industrials
NSE: MANALIPETC ISIN Code: INE201A01024
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NSE 00:00 | 17 Feb 17.10 -0.35
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OPEN 17.60
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VOLUME 35077
52-Week high 28.35
52-Week low 15.55
P/E 7.66
Mkt Cap.(Rs cr) 292
Buy Price 16.60
Buy Qty 110.00
Sell Price 17.00
Sell Qty 153.00
OPEN 17.60
CLOSE 17.45
VOLUME 35077
52-Week high 28.35
52-Week low 15.55
P/E 7.66
Mkt Cap.(Rs cr) 292
Buy Price 16.60
Buy Qty 110.00
Sell Price 17.00
Sell Qty 153.00

Manali Petrochemicals Ltd. (MANALIPETC) - Auditors Report

Company auditors report

TO THE MEMBERS OF MANALI PETROCHEMICALS LIMITED

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying Standalone Ind AS Financial Statements of ManaliPetrochemicals Limited ("the Company") which comprise the Balance sheet as at31st March 2019 and the Statement of Profit and Loss (Including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year then ended and notes to the Financial Statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("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 312019 and its profit itschanges in equity and its cash 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 theFinancial Statements section of our Report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of theFinancial Statements under the provisions

of the Companies Act 2013 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 opinion.

Emphasis of Matter

Attention is invited to Note No. 48 to the Standalone Ind AS Financial Statementsexplaining that the period of lease relating to the leasehold land on which one of themanufacturing units of the Company is operating has since expired on June 30 2017 forwhich requests for renewal have been filed by the Company with Govt of Tamil Nadu (theLessor) and the extension of lease is awaited. Pending renewal of lease no adjustmentshave been made in the Standalone Ind AS Financial Statements for the year ended March 312019 for any potential impact of non-renewal of land lease which is unascertainable atthis point of time. Further the Management is confident of obtaining the renewal of thelease of the land. Our opinion is not modified in respect of the above matter.

Key Audit Matters

Key audit matters are those matters that which in our professional judgment were mostsignificant in our audit of the Standalone Ind AS Financial Statements of the currentperiod. These matters were addressed in the context of our audit of the Standalone Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the below matters described to bethe key audit matters to be communicated in our Report.

1) Revenue recognition and discounts:

Key Audit Matter Auditor's Response
Revenue is measured net of discounts given to the customers on the Company's sales. The estimation towards measurement of discounts given to its customers corresponding to the sales made during the year is material and is considered to be complex and judgmental. (i) We have assessed the appropriateness of the Company's Revenue recognition accounting policies including those relating to estimation of discounts given to its customers.
(ii) We have tested the effectiveness of the entity's internal controls over calculation of discounts.
This is an area of significant judgement and with varying complexity depending on nature of arrangement which differs from customer to customer. (iii) We have evaluated the documentation associated with the transactions of sale including credit notes and appropriate approvals for discounts offered to customers from the samples selected to determine whether revenue was recognised net of discounts in the relevant reporting period.
Therefore there is a risk of revenue being misstated as a result of faulty estimations relating to discounts to its customers The results of our tests are satisfactory and we considered the estimate of the accrual relating to discounts and the amount of revenue recognised is found to be acceptable on comparing current year discounts accruals to the prior year and where relevant completing further inquiries and testing.

2) Evaluation of Contingent Liabilities

Kev Audit Matter Auditor's Response
The Company has contingent liabilities comprising claims against the company not acknowledged as debts and demands from various statutory authorities which are inherent to the normal course of their business filed by third parties former employees and statutory authorities. Our audit procedures included the following:
(i) We have evaluated and tested the procedures and controls relating to the identification recognition and measurement of provisions for disputes and disclosures in relation to matters concerning the contingent liabilities;
In general the settlement of these proceedings takes a long time and involve not only discussions on the matter itself but also complex process-related aspects depending on the applicable legislation. (ii) We have considered the list of various orders/notices/demands received with respect to various litigations from the management;
(iii) We reviewed the confirmations obtained by the Company from their legal counsel / consultants on a sample basis and also discussed and analysed material legal cases with the Company's Legal department.
Among other things the aspects used to establish the likelihood of a loss attributed to each proceeding are subjective and the evolution of the jurisprudence over these disputes are not always uniform. We have also analysed the responses obtained from the Company's legal advisors who conduct the court cases tax and administrative proceedings in which the status of the cases and possible/expected manner of proceedings were described.
In certain litigation and regulatory matters significant judgement is required by the Management to determine if there is a present obligation under relevant accounting standard. (iv) We held discussions with the Management to understand their assessment of the quantification and likelihood of significant exposures and the provision required for specific cases;
The complex nature of the Regulations and jurisprudence make this an ongoing area of judgement and taking into consideration Management's judgement in assessing the likelihood that the pending claim will succeed or a liability will arise time period for resolution have been a matter of significance during the audit and the exposure of each case there is a risk that such cases may not be adequately provided for or disclosed in the standalone Ind AS financial statements and hence considered as a key audit matter. (v) We assessed the objectivity and competence of the Management and independence of the legal experts;
(vi) We evaluated the Management's assumptions and estimates relating to the recognition of the provisions for disputes and disclosures of contingent liabilities in the standalone Ind AS financial statements; and
(vii) We assessed the adequacy of the disclosures with regard to facts and circumstances of the legal and litigation matters.
Based on the procedures stated above we found that the criteria and assumptions adopted by Management for determining the provision for contingent liabilities as well as the information disclosed relating to contingent liabilities in the financial statements are appropriate.

3) Evaluation of Carrying Value of Captive Power Plant (Property Plant and Equipment):

Key Audit Matter Auditor's Response
The Management has suspended the operations of the Captive Power Plant (CPP) and is in the process of evaluating the future course of action and viability of the plant which is mainly dependent on the availability and pricing of fuel. The Management has estimated the recoverable value of the CPP plant as र 23.13 crore which is the carrying value as at 31st March 2019. Principal audit procedures performed:
In evaluating this key audit matter we considered the following:
(i) Completeness and accuracy of the data and reasonableness of assumptions considered in determining the recoverable value.
Due to the multitude of factors assumptions and significant judgments involved in estimating the recoverable values any adverse changes to these assumptions could result in change in the recoverable value determined resulting in such recoverable value becoming lower than the carrying amount. (ii) The External valuation obtained by the Management for the immediately preceding financial year where the Management had confirmed that the valuation report is still be relevant for assessing the recoverable value of CPP as at 31st March 2019. The assessment associated with the determination of the recoverable value included the following procedures:
a. Discussions with key management persons to identify factors that have been taken into account in the analysis.
Therefore there is a risk of the carrying value being stated above to be different from the recoverable value and hence considered as a key audit matter. b. Assessed the reasonableness of the valuation methodology considered by the external specialist appointed by the Management having specific regard to the Management's plans of putting the CPP into use with alternate fuels to make the operations viable.
c. Evaluation of the Management's assumptions used in determining the recoverable value in sofar it relates to justification of the carrying value
Based on the procedures stated above we found that the justification of the carrying value is appropriate considering the Management's future plans.

Information Other than the Standalone Ind AS Financial Statements and Auditor's ReportThereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Company's Annual Report does notinclude the Standalone Ind AS financial statements and our auditor's report thereon.

Our opinion on the Standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance for the Standalone IndAS 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 Ind AS Financial Statements that give a true and fair view of thefinancial position financial performance including Other Comprehensive Income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards (Ind AS) specified undersection 133 of the Act read with relevant rules issued thereunder. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; the selection and application of appropriate accountingpolicies; making judgments and the estimates that are reasonable and prudent; and thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

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

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

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

Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an Auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Ind AS 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 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls with reference to financialstatements in place 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 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.

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the 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 "Annexure 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 accounts.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (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 termsof Section 164 (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".

g) 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 Note 37(i) to the standalone Ind AS financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich 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

3. With respect to the matter to be included in the Auditors' report under Section197(16):

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.

For Brahmayya & Co.
Chartered Accountants
FRN: 000511S
N. Sri Krishna
Place: Chennai Partner
Date: May 20 2019 Membership No: 026575

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in Independent Auditors' Report to the Members of ManaliPetrochemicals Limited on the Standalone Ind AS Financial Statements for the year endedMarch 31 2019

i. In respect of Company's fixed assets:

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

b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the programme certain fixedassets were physically verified by the Management during the year. In our opinion andaccording to the information and explanations given to us no material discrepancies werenoticed on such verification.

c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.

ii. As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals. No material discrepancies were noticed upon physicalverification during the year.

iii. In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Act. Accordingly paragraph 3(iii) of the Order is not applicable to theCompany.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public during the year in terms of theprovisions of Sections 73 to 76 or any other relevant provisions of the Act and the rulesframed there under. Accordingly paragraph 3(v) of the Order is not applicable to theCompany.

vi. We have broadly reviewed the cost records maintained by the Company specified bythe Central Government under sub-section (1) of Section 148 of the Companies Act 2013 andare of the opinion that prima facie the prescribed cost records have been maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

vii. According to the information and explanations given to us in respect of statutorydues:

a) on the basis of our examination of the records of the Company in respect ofundisputed statutory dues including Provident Fund Employees' State InsuranceIncome-Tax Sales-Tax Service Tax Duty of Custom Duty of Excise Value Added Tax Goodsand Services Tax Cess and other material statutory dues have generally been regularlydeposited with the appropriate authorities though there has been a slight delay in a fewcases. According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-Tax Sales-TaxService Tax Duty of Customs Duty of Excise Value Added Tax Goods and Services TaxCess and other material statutory dues were in arrears as at 31 March 2019 for a period ofmore than six months from the date they became payable.

b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company details of dues of Income-Tax Sales-TaxService Tax Duty of Customs Duty of Excise and Value Added Tax which have not beendeposited as on 31 March 2019 on account of disputes are given below:

Name of the Statute Nature of dues Forum where the dispute is pending Period to which the amount relates Amount involved Amount unpaid
Central Excise Excise Duty High Court of Madras 2007-08 53.39 -
Act 1944 High Court of Madras 2012-13 380.89 380.89
Customs Tariff Act1962 Customs Duty Additional Director General DRI Various Years 383.08 383.08
Finance Act1994 Service Tax Customs Excise and Service Tax Appellate Tribunal Various Years 6.80 4.80
TNVAT & CST Acts Sales Tax TN Sales Tax Appellate Tribunal 2000-01 10.74 10.74
Appellate Deputy Commissioner 2003-04 21.62 -
High Court of Madras 2008-09 6.06 6.06
Appellate Deputy Commissioner 2007-082008-09 2009-10 12.58 12.58
Appellate Deputy Commissioner 2008-09 7.17 7.17

Assessment Year

Income Tax Income Tax Commissioner of Income 2008-09 518.45 488.45
Act1961 Tax (Appeals) 2009-10 3.12 -
Deputy Commissioner of Income Tax(LTU) 2010-11 176.88 106.88
Commissioner of Income Tax (Appeals) 2010-11 29.13 29.13
Commissioner of Income Tax (Appeals) 2011-12 344.84 -
Commissioner of Income Tax (Appeals) 2012-13 476.90 381.10
ITAT 2013-14 30.46 30.46
Commissioner of Income Tax (Appeals) 2014-15 78.08 66.37
Commissioner of Income Tax (Appeals) 2015-16 108.22 108.22
Commissioner of Income Tax (Appeals) 2016-17 232.14 232.14
Total 2880.55 2248.07

viii. Based on the audit procedures and according to the information and explanationsgiven to us the Company is generally regular in repayment of loans or borrowings from anyfinancial institution banks government or debenture holders.

ix. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments). The Company has not obtained any term loans during theyear.

x. According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.

xi. In our opinion and according to the information and explanations given to us theCompany has not paid /provided managerial remuneration in excess of the limits andapprovals prescribed under Section 197 read with Schedule V to the Companies Act 2013.

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

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Standalone Ind AS Financial Statements as requiredby the applicable Accounting Standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable to the Company.

xvi. According to the information and explanations given to us the Company is notrequired to be registered under section 45 IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.

For Brahmayya & Co.
Chartered Accountants
FRN: 000511S
N. Sri Krishna
Place: Chennai Partner
Date: May 20 2019 Membership No: 026575

ANNEXURE - B TO THE INDEPENDENT AUDITORS' REPORT

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

In conjunction with our audit of the Standalone Ind AS Financial Statements of theCompany as of and for the year ended March 31 2019 we have audited the internalfinancial controls over financial reporting of Manali Petrochemicals Limited ("theCompany") as of 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 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.

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 judgment including the assessment of the risks ofmaterial misstatement of the Standalone Ind AS Financial Statements whether due to fraudor 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 authorizations ofmanagement and directors of the company; and (3) Provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the Financial Statements.

Inherent Limitations of Internal Financial Controls over financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion and to the best of our information and according to the explanationgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31 March 2019 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Brahmayya & Co.
Chartered Accountants
FRN: 000511S
N. Sri Krishna
Place: Chennai Partner
Date: May 20 2019 Membership No: 026575