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Mangalam Cement Ltd.

BSE: 502157 Sector: Industrials
NSE: MANGLMCEM ISIN Code: INE347A01017
BSE 00:00 | 24 Jan 307.25 3.30
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308.00

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310.50

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304.85

NSE 00:00 | 24 Jan 308.10 4.15
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304.85

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OPEN 308.00
PREVIOUS CLOSE 303.95
VOLUME 749
52-Week high 339.90
52-Week low 193.00
P/E 16.27
Mkt Cap.(Rs cr) 820
Buy Price 307.25
Buy Qty 50.00
Sell Price 311.00
Sell Qty 5.00
OPEN 308.00
CLOSE 303.95
VOLUME 749
52-Week high 339.90
52-Week low 193.00
P/E 16.27
Mkt Cap.(Rs cr) 820
Buy Price 307.25
Buy Qty 50.00
Sell Price 311.00
Sell Qty 5.00

Mangalam Cement Ltd. (MANGLMCEM) - Auditors Report

Company auditors report

TO The members of Mangalam Cement Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying Financial statements of Mangalam Cement Ltd.("the Company") which comprise the Balance sheet as at March 31 2019 theStatement of Profit and Loss (including the statement of Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as "the financialstatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amendedfind AS") and other accounting principles generally accepted in India of the stateof affairs of the Company as at March 31 2019 its loss including other comprehensiveincome its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the Financial statements in accordance with the Standards onAuditing (SAs) as specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the ‘Auditor's Responsibilities for theAudit of the Financial statements' section of our report. We are independent of theCompany in accordance with the 'Code of Ethics' issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the financial statements under the provisions of the Act and the Rules thereunder andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Financial statements.

Emphasis of Matters

We draw attention to Note No 32.5 regarding coal valuing Rs. 1512.64 Lakhs included ininventory of Stores and Spares sent for processing and is lying with a vendor for longtime. Due to financial difficulty vendor could not supply the material but the Company ishopeful of recovery.

Our opinion is not modified in respect of the above matter. Key Audit Matters Key auditmatters are those matters that in our professional judgment were of most significance inour audit of the financial statements for the financial year ended March 31 2019. Thesematters were addressed in the context of our audit of the financial statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters. For each matter below our description of how our audit addressed the matter isprovided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the 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 financial statements. The results of our audit procedures includingthe procedures performed to address the matters below provide the basis for our auditopinion on the accompanying financial statements.

Key Audit Matter Auditor's Response
1. Revenue Recognition For the financial year ended 31 March 2019 the Company has recorded revenue amounting to 119506.50 Lakhs. The accounting policies for revenue recognition are set out in Note 32.2 to the financial statements and the different revenue streams of the Company have been disclosed in Note 24 to the financial statements. We have identified sales cut-off to be significant because of the high volume of transactions and the varying sales contractual and shipping terms. Revenue recognition is susceptible to the higher risk that the revenue is recognised when the control of goods has not been transferred to the customers. How our audit addressed the key audit matter
We assessed the overall sales process and the relevant systems and the design of controls over the capture and recording of revenue transactions. We have tested the effectiveness of controls on the processes related to revenue recognition relevant to our audit. We performed sample testing on revenue and checked that the revenue recognition criteria are appropriately applied. We have also performed cut-off tests to ensure the Company has complied with proper cut-off procedures and revenue is recognised in the appropriate accounting period.
Our Observation:
We found the Company's revenue recognition to be consistent with its accounting policy as disclosed in Note 32 to the financial statements. We are satisfied that the Company's revenue has been appropriately recognised and in the relevant accounting period.
2. Valuation of inventories How our audit addressed the key audit matter.
We refer to Note 5 and 32.2 to the financial statements. We have analyzed the ageing of the inventories reviewed the historical trend on whether there were significant inventories written off or reversal of the allowances for inventories obsolescence. We conducted a detailed discussion with the key management and considered their views on the adequacy of allowances for inventories obsolescence considering the current economic environment. We have also verified the subsequent selling prices in the ordinary course of business and compared against the carrying amounts of the inventories on a sampling basis at the reporting date.
As at March 31 2019 the total carrying amount of inventories was Rs. 11656.42 Lakhs. The assessment of impairment of inventories involves significant estimation uncertainty subjective assumptions and the application of significant judgment. Our Observations:
Reviews are made periodically by management on inventories for obsolescence and decline in net realizable value below cost. Allowances are recorded against the inventories for any such declines based on historical obsolescence and slow-moving history. Key factors considered include the nature of the stock its ageing shelf life and turnover rate. We found management's assessment of the allowance for inventory obsolescence to be reasonable based on available evidence.
3. Valuation of Non-Current and Current investments How our audit addressed the key audit matter
As at March 31 2019 the total carrying amount of investments were Rs. 3297.41 Lakhs. The assessment of impairment of investments involves significant estimation uncertainty subjective assumptions and the application of significant judgment. Our audit procedures included updating our understanding of the processes employed by the Company for accounting for and valuing their investments. We obtained accounts confirmation and verified that the company was the recorded owner of all investments. Our audit procedures over the valuation of the Investments included reviewing fair valuation of all Investments held at March 31 2019 determined as per fair valuation methods described in Ind-AS 113 'Fair Value Measurement'.
Valuation and existence of investments designated at amortised costs / fair value through profit or loss ("the Investments'). This was an area of focus for our audit and the area where significant audit effort was directed. Our Observation:
Based on the audit procedures performed we are satisfied with existence and valuation of investment.
4. Valuation of trade loans and other receivables How our audit addressed the key audit matter
As disclosed in Note 3471011 and 13 to the financial statements. We obtained an understanding of the Company's credit policy for trade receivables and in case of loans terms and condition of the agreements and evaluated the processes for identifying impairment indicators. We have reviewed and tested the ageing of trade loans and other receivables. We have reviewed management's assessment on the credit worthiness of selected customers for trade receivables. We further discussed with the key management on the adequacy of the allowance for impairment recorded by the Company and reviewed the supporting documents provided by management in relation to their assessment. We have also reviewed the adequacy and appropriateness of the impairment charge based on the available information.
The Company assesses periodically and at each financial year end the expected credit loss associated with its receivables. When there is expected credit loss impairment the amount and timing of future cash flows are estimated based on historical current and forwardlooking loss experience for assets with similar credit risk characteristics. We focused on this area because of its significance and the degree of judgement required to estimate the expected credit loss and determining the carrying amount of trade loans and other receivables as at the reporting date. Our Observation:
Based on our audit procedures performed we found management's assessment of the recoverability of trade loans and other receivables to be reasonable and the disclosures to be appropriate.
5. Income Taxes How our audit addressed the key audit matter.
There is significant judgement in accounting for taxes particularly given the large number of jurisdictions in which the Company operates and exposures to tax laws in India. This gives rise to complexity and uncertainty in respect of the calculation of income taxes deferred tax positions. Due to significance to the financial statements as a whole combined with the judgement and estimation required to determine their values the evaluation of current and deferred tax balances is considered to be a key audit matter. We assessed the adequate implementation of the policies and controls regarding current and deferred tax. We evaluated the design and implementation of controls in respect of provisions for current tax and the recognition and recoverability of deferred tax assets. We examined the procedures in place for the current and deferred tax calculations for completeness and valuation and audited the related tax computations and estimates in the light of our knowledge of the tax circumstances. Our work was conducted with the support of our tax specialists. We performed an assessment of the major items impacting the Company's tax expense balances and exposures.
Our Observations:
With the support of our tax specialists we analyzed tax balances. In respect of Minimum Alternate Tax and deferred tax assets and liabilities we assessed the appropriateness of management's assumptions and estimates including the likelihood of generating sufficient future taxable income to support Minimum Alternate Tax asset and deferred tax assets on tax losses carried forward which shall be available for utilization in future.
6. Evaluation of uncertain tax positions How our audit addressed the key audit matter.
Refer Notes 13 and 32.3 to the Financial Statements. The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. We have obtained details of complete tax assessments and demands from management. We considered management's assessment of the validity and adequacy of provisions for uncertain tax positions evaluating the basis of assessment and reviewing relevant correspondence and legal advice where available including any information regarding similar cases with the relevant tax authorities. We have involved our internal experts to challenge the management's assumptions in estimating the tax provision and the possible outcome of the disputes. Our Observations: With the support of our tax specialists we analyzed tax positions taken by company. We considered management's assessment of the validity and adequacy of provisions for uncertain tax positions evaluating the basis of assessment and reviewing relevant correspondence and legal advice where available including any information regarding similar cases with the relevant tax authorities. In respect of various tax demands and liabilities we assessed the appropriateness of management's assumptions and estimates.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe Financial statements and our auditor's report thereon. We have obtained all otherinformation prior to the date of this auditors' report.

Our opinion on the Financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the Financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit 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. Management's Responsibility for the Ind-AS FinancialStatements

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 Financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

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

Auditor's Responsibility

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 enor and are considered material if individually or in the aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese 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 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.

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 Act we give in the Annexure-A statements on the matters specified in the paragraphs 3and 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 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 financial statements comply with the AccountingStandards specified under Section 133 of the Act. read with Rule 7 of the -2 Companies(Accounts) Rules 2014 and the Companies (Indian Accounting Standards) Rules 2015 asamended.

(e) On the basis of written representations received from the directors as on March312019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312019 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 with reference tofinancial statement of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B". (g) The matter about coal sent forprocessing as described under the emphasis of matters paragraph above in our opinionshall have no adverse effect on the functioning of the Company.

(h) In our opinion the managerial remuneration for the year ended March 312019 hasbeen paid/provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act: and (i) With respect to the other matters tobe included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us: a. The Company has disclosed the impact of pendinglitigations on its financial position in its financial statements. Refer Note No. 32.3. b.The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on longterm contracts includingderivative contracts. c. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company. For SINGHI& CO Chartered Accountants Firm Reg. No. 302049E B. K. SIPANI Place: New DelhiPartner Date: May 112019 Membership No.088926 Annexure-A to the Auditor's Report Annexurereferred to in paragraph 1 of our report of even date on the other legal and regulatoryrequirements (Re:Mangalam Cement Limited)

(i) . (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of plant property and equipment except in case ofcertain assets where the same is in process of updation.

(b) The Company has a regular programme of physical verification of its plant propertyand equipment by which plant property and equipment are verified in a phased manner overa period of three years. In accordance with this programme fixed assets were verifiedduring the year. The discrepancies noticed on such physical verification were notmaterial.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded in fixed assets are held in the name of the Company.

For SINGHI & CO
Chartered Accountants
Firm Reg. No. 302049E
B. K. SIPANI
Place: New Delhi Partner
Date: May 11 2019 Membership No.088926

Annexure-A to the Auditor's Report

Annexure referred to in paragraph 1 of our report of even date on the other legal andregulatory requirements (Re:Mangalam Cement Limited)

(i). (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of plant property and equipment except in case ofcertain assets where the same is in process of updation.

(b) The Company has a regular programme of physical verification of its plant propertyand equipment by which plant property and equipment are verified in a phased manner overa period of three years. In accordance with this programme fixed assets were verifiedduring the year. The discrepancies noticed on such physical verification were notmaterial.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded in fixed assets are held in the name of the Company.

(ii) . The management has conducted physical verification of inventories except stocklying with third parties during the year at reasonable interval and no materialdiscrepancies were noticed on such physical verification.

(iii) . The Company has granted unsecured loans to a company covered in registermaintained under section 189 of the Companies Act2013. The terms and conditions on whichthe loans were granted to above company were not prima facie prejudicial to the interestof the Company. The Company has stipulated schedule of repayment of principal includinginterest thereon. The Board of Directors has rescheduled payment of interest. Accordinglypayment of principal and interest is not overdue. The Company has not granted loan tofirms Limited Liability partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013.

(iv) . In our opinion and according to the information and explanations given to usthe Company has complied with provisions of section 186 of the Companies Act 2013 withrespect of loan granted and investment made. According to information and explains givenby the management no loan or guarantee or security under section 185 and no guarantee andsecurity under section 186 of the Companies Act 2013 have been given or outstandingduring the year. (v) The Company has not accepted any deposits covered under section 76 ofthe Companies Act 2013 during the year. Therefore the provisions of clause 3(v) of theOrder are not applicable. (vi) We have broadly reviewed the books of account maintained bythe Company pursuant to the rules made by the Central Government for the maintenance ofcost records under section 148(1) of the Companies Act 2013 and are of the opinion thatprima facie the prescribed records have been made and maintained. We have however notmade a detailed examination of the said records with a view to determine whether they areaccurate or complete. (vii) . a According to the records of the Company the Company isregular in depositing amounts deducted/ accrued in the books of accounts in respect ofundisputed statutory dues including Provident Fund Employee's State InsuranceIncome-tax Sales-tax Service Tax Duty of customs Duty of excise Value Added TaxCess Goods and Services Tax and other material statutory dues with the appropriateauthorities. There was no undisputed outstanding statutory dues as at the yearend for aperiod of more than six months from the date they became payable. b According to therecords of the Company there are no dues outstanding on account of Income-tax Sales- taxValue Added Tax Service Tax Duty of customs Duty of excise. Goods and Services Tax andCess on account of any dispute except the followings :

The Name of Statute Nature of Dues Amount (Rs in Lacs)* Period to which the amount related Forum where matter is pending
Central Excise Act 1944 Cenvat Credit 1922.39 2006 to 2013 High Court
57.99 2005 to 2016 CESTAT New Delhi
1.39 2016 to 2017 Commissioner (Appeals)
116.12 2012 to 2013 Commissioner
116.24 2013 to 2017 Deputy Commissioner
7.69 2016-17 Superintendent
Excise Duty 4780.18 2008 to 2017 Commissioner
Income Tax Act 1961 Income Tax 1088.98 AY 2009-10 to 2012-13 Supreme Court
102.29 AY 2013-14 CIT(Appeals)
Sales Tax (Rajasthan) Sales-tax Incentive and interest thereon 4161.84# 2003-08 High Court
RVAT 2.00 2007-08 Rajasthan Tax Board
Finance act 1994 Service Tax 448.23 2010 to 2015 Supreme Court
801.02 2013 to 2017 CESTAT New Delhi
106.58 2013 to 2014 Commissioner (Appeals)
265.57 2010 to 2017 Addl. Commissioner
33.94 2008 to 2017 Asst. Commissioner
0.39 2013-14 Superintendent

•Net of amount paid under protest.

# Since decided in the favor of the Company.

(viii) . The Company has not defaulted in repayment of dues to banks. The Company didnot have any borrowing from any financial institution or Government and dues to debentureholders.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments). Further in our opinion and explanations givento us term loans were applied for the purpose for which loans were raised.

(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 to us no fraud by the Company or no fraud on the Company by its officers andemployees has been noticed or reported during the year.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Therefore the provisions of clause 3(xii) of the Orderare not applicable.

(xili) 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 financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations give 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.

(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 directors. Therefore the provisionsof clause 3(xv) of the Order are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For SINGHI & CO
Chartered Accountants
Firm Reg. No. 302049E
B. K. SIPANI
Place: New Delhi Partner
Date: May 11 2019 Membership No.088926

Annexure - B to the Auditor's Report

Report on the Internal Financial Controls under Clause 0) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to financial statementsof Mangalam Cement Limited ("the Company") as of 31 March 2019 in conjunctionwith our audit of the Ind-AS financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the Ind-ASfinancial 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 with reference to Financial 5 Statements

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind-AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company;

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

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the Ind-AS financial statements. Inherent Limitations of InternalFinancial Controls with reference to Financial Statements Because of the inherentlimitations of internal financial controls with reference to financial statementsincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls with reference tofinancial statements to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the 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 controlswith reference to financial statements were operating effectively as at 31 March 2019based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial controls with reference to financial statements issued by theInstitute of Chartered Accountants of India however same need to be further strengthened.

For SINGHI & CO
Chartered Accountants
Firm Reg. No. 302049E
B. K. SIPANI
Place: New Delhi Partner
Date: May 11 2019 Membership No.088926