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NCC Ltd.

BSE: 500294 Sector: Infrastructure
NSE: NCC ISIN Code: INE868B01028
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(-1.36%)
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OPEN 40.45
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VOLUME 1043522
52-Week high 119.15
52-Week low 37.70
P/E 5.00
Mkt Cap.(Rs cr) 2,436
Buy Price 39.60
Buy Qty 5.00
Sell Price 39.95
Sell Qty 1252.00
OPEN 40.45
CLOSE 40.50
VOLUME 1043522
52-Week high 119.15
52-Week low 37.70
P/E 5.00
Mkt Cap.(Rs cr) 2,436
Buy Price 39.60
Buy Qty 5.00
Sell Price 39.95
Sell Qty 1252.00

NCC Ltd. (NCC) - Auditors Report

Company auditors report

To the Members of NCC Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of NCC Limited("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 standalone Ind AS financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the standalone Ind AS financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of reports of the branch auditors and otherauditors on separate financial statements of branches and joint operations referred to inthe Other Matters paragraph below the aforesaid standalone Ind AS financial statementsgive the information required by the Companies Act 2013 ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2019 its profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards 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 Standalone Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone Ind AS 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 standalone Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 31 2019. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context. We havedetermined the matters described below to be the key audit matters to be communicated inour report. We have fulfilled the responsibilities described in the ‘Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour report 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 standalone Ind AS financial statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanying standalone Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
Trade receivables and contract assets
Trade receivables and contract assets amounting to `3154.16 crores and ` 4204.17 crores respectively represents approximately 55.92% of the total assets of the Company as at March 31 2019. In assessing the recoverability of the aforesaid balances management's judgement involves consideration of aging status evaluation of litigations and the likelihood of collection based on the terms of the contract. Our audit procedures amongst others included the following:
• We understood and tested on a sample basis the design and operating effectiveness of management control over the recognition and the recoverability of the trade receivables and contract assets.
Management estimation is required in the measurement of work completed during the period for recognition of unbilled revenue. We considered this as key audit matter due to the materiality of the amounts and significant estimates and judgements as stated above. • We performed test of details and tested relevant contracts documents and subsequent settlements for material trade receivable balances and amounts included in contract assets that are due on performance of future obligations.
• We tested the aging of trade receivables at year end.
• We performed test of details and tested relevant contracts and documents with specific focus on measurement of work completed during the period for material unbilled revenue balances included in contract asset.
• We performed additional procedures in respect of material over-due trade receivables and long outstanding contract assets i.e. tested historical payment records correspondence with customers and legal advice obtained by the management on litigations from legal experts.
• We evaluated the competence capabilities and objectivity of the aforesaid legal experts
• We assessed the allowance for impairment made by management.
Carrying value of investment made in a subsidiary Our audit procedures amongst others included the following:
The Company's carrying value of investment in NCC Infrastructure Holdings Limited (‘NCCIHL') as at March 31 2019 is ` 375.09 crores which is higher by ` 84.72 crores as compared to the Company's share of net worth in NCCIHL as per its audited financial statements. Management's assessment of the recoverable amount of the investment in the above subsidiary has been identified as a key audit matter due to the significance of the carrying value of the investment and that it requires the management to make significant estimate of future cash flows from the claims filed by NCCIHL but not accounted for by taking into consideration the management's internal assessment and legal advice on the tenability of the claims. • We obtained and read management's assessment of the recoverable amount of the investment.
• We traced the net worth of NCCIHL to the audited financial statements of NCCIHL as at and for the year ended March 31 2019 audited by another firm of chartered accountants.
• We obtained a summary of the claims filed by NCCIHL but not accounted for.
• We read and assessed the legal advice obtained by the Company from expert in respect of the tenability of the above claims.
• We evaluated the competence capabilities and objectivity of the aforesaid expert.
• We assessed the allowance for impairment made by management.
Indirect tax litigations
The Company is subject to assessments by tax authorities on various indirect tax matters resulting into litigations / disputes (refer note 36 to the standalone Ind AS financial statements). Our audit procedures amongst others included the following:
The tax matters involve significant amounts which are at various stages and the proceedings take significant time to resolve. • Obtained list of indirect tax litigations as at March 31 2019 from management.
Management exercises significant judgement in assessing the financial impact of tax matters due to the complexity of the cases and involvement of various tax authorities. • Discussed the matters with the management to understand the possible outcome of these disputes.
Accordingly we have identified this as a key audit matter. • Involved our experts to review the management's assessment of the possible outcome of the disputes relating to indirect tax litigations.
• Our experts also considered legal precedence and other rulings in evaluating management's assessment on these indirect tax litigations.
• Assessed contingent liability disclosure in note 36 to the accompanying standalone Ind AS financial statements.

We have determined that there are no other key audit matters to communicate in ourreport.

Information Other than the Financial Statements and Auditor's report thereon

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 standalone Ind AS financial statements and our auditor's report thereon. Our opinionon the standalone Ind AS financial statements does not cover the other information and wedo 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 for the Standalone Ind AS Financial Statements

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 standalone Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the 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.

Those charged with governance are also responsible for overseeing the Company'sfinancial reporting 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 judgement andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves 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 standalone Ind AS financialstatements for the financial year ended March 31 2019 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Other matter

We did not audit the financial statements and other financial information of 5 branchesand 10 joint operations included in the accompanying standalone Ind AS financialstatements of the Company whose financial statements and other financial informationreflect total assets of ` 117.34 crores as at March 31 2019 and the total revenues of `160.41 crores for the year ended on that date. These financial statements and otherfinancial information of these branches and joint operations have been audited by thebranch auditors and other auditors respectively whose reports have been furnished to usand our opinion in so far as it relates to the amounts and disclosures included in respectof these branches and joint operations and our report in terms of subsection (3) ofSection 143 of the Act in so far as it relates to the aforesaid branches and jointoperations is based solely on the report of such branch auditors and other auditorsrespectively. Of these 2 branches are located outside India whose financial statements andother financial information have been prepared in accordance with accounting principlesgenerally accepted in their respective countries and which have been audited by branchauditors under generally accepted auditing standards applicable in their respectivecountries. The Company's management has converted the financial statement of such brancheslocated outside India from accounting principles generally accepted in their respectivecountries to accounting principles generally accepted in India. We have audited theseconversion adjustments made by the Company's management. Our opinion in so far as itrelates to the balances and affairs of such branches located outside India is based on thereport of branch auditors and the conversion adjustments prepared by the management of theCompany and audited by us. Our opinion on the standalone Ind AS financial statements andour report on Other Legal and Regulatory Requirements below is not modified in respect ofthese matters.

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 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.

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 and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus;

(c) The reports on the accounts of the branch offices of the Company audited underSection 143(8) of the Act by branch auditors have been sent to us and have been properlydealt with by us in preparing this report;

(d) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and the Statement of Changes in Equitydealt with by this Report are in agreement with the books of account and with the returnsreceived from the branches not visited by us;

(e) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;

(f) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct;

(g) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure 2" to this report;

(h) In our opinion the managerial remuneration for the year ended March 31 2019 hasbeen paid and provided by the Company to its directors in accordance with the provisionsof section 197 read with Schedule V to the Act; and

(i) 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 standalone Ind AS financial statements – Refer Notes 36 and 44 to thestandalone Ind AS financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts; and

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

For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Navneet Rai Kabra
Partner
Membership Number: 102328
Place of Signature: Hyderabad
Date: May 24 2019

ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

Re: NCC Limited (‘The Company')

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

(i)(b) A major portion of fixed assets have been physically verified by the managementin accordance with the programme of verification which in our opinion provides forphysical verification of all fixed assets at reasonable interval having regard to the sizeof the Company and nature of its assets. According to the information and explanationsgiven to us the discrepancies noticed on such verification were not material and havebeen properly dealt with in the books of account.

(i)(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment/ fixed assets areheld in the name 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)(a) The Company has granted loans to companies covered in the register maintainedunder section 189 of the Companies Act 2013. In our opinion and according to theinformation and explanations given to us the terms and conditions of the grant of suchloans are not prejudicial to the Company's interest.

(iii)(b) The schedule of repayment of principal and payment of interest has beenstipulated for the loans granted and the repayment/receipts are regular.

(iii)(c) There are no amounts of loans granted to companies firms or other partieslisted in the register maintained under section 189 of the Companies Act 2013 which areoverdue for more than ninety days.

(iv) In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the Company.

(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 construction services and areof the 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 generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of custom duty of excise value added tax goodsand service tax cess and other material statutory dues applicable to it.

(vii)(b) According to the information and explanations given to us no undisputedamounts payable in respect of provident fund employees' state insurance income-taxservice tax sales-tax duty of custom duty of excise value added tax goods and servicetax cess and other material statutory dues were outstanding at the year end for aperiod of more than six months from the date they became payable.

(vii)(c) According to the records of the Company the dues outstanding of income-taxsales-tax service tax custom duty excise duty Goods and Service tax value added taxand cess on account of any dispute are as follows:

(Rs. in crores)
Statute Nature of the dues Forum where dispute is pending Period to which the amount relates Amount involved net of paid under protest Amount paid under protest
CST Appellate Authority Bhopal 2011-12 to 2014-15 0.80 0.48
CST Commissioner of Commercial Taxes Ranchi Jharkhand 2014-15 0.31 -
CST Sales Tax TribunalMumbai. 2010-12 and 2013-14 10.88 0.48
VAT Additional Commissioner Andhra Pradesh 2012-13 12.64 8.38
VAT Additional Commissioner Grade-2 (Appeals) Commercial Tax Range-5 Lucknow 2006-07 1.55 0.16
VAT Additional Commissioner (CT) West Bengal 2010-11 21.77 1.45
VAT Commissioner of Sales Tax New Delhi 2009-11 & 2012-14 13.00 4.74
VAT Appellate Deputy Commissioner Kerala 2008-09 0.31 0.05
VAT Additional Commissioner West Bengal 2014-15 2.77 2.93
VAT Commissioner of Sales Tax Kerala 2012-14 2.13 -
VAT Commissioner of Commercial Taxes Ranchi Jharkhand 2010-15 7.37 1.13
VAT High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh 2005-06 1.45 -
VAT Hon'ble High Court of Orissa 2007-13 10.42 3.80
Sales tax and VAT Law VAT Hon'ble High Court of Tamil Nadu 2006-07 0.44 -
VAT Sales Tax Appellate Tribunal Andhra Pradesh 2005-09 16.15 13.86
VAT Sales Tax Tribunal Mumbai. 2010-14 37.92 6.67
VAT Sr. Joint Commissioner (Appeals) West Bengal 2008-10 & 2012-13 34.33 3.35
VAT Sr. Joint Commissioner Commercial Tax West Bengal 2013-14 8.42 6.15
VAT Appellate Deputy Commissioner Hyderabad 2007-10 28.07 28.07
VAT Sales Tax Appellate Joint Commissioner Andhra Pradesh 2010-12 14.96 14.96
VAT Joint Commissioner Lucknow 2011-16 46.67 31.84
VAT Sales Tax Tribunal Lucknow 2010-11 1.88 1.88
VAT Joint Commissioner West Bengal 2013-2015 14.73 3.49
VAT Deputy Commissioner of Sales Tax Bhubaneswar Oct'15 to June'17 39.08 5.72
Entry Tax High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh 2012-13 0.99 0.50
Entry Tax Hon'ble High Court of Orissa 2007-13 0.74 -
Sales Tax High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh 1994-95 0.44 0.27
Sales Tax Sales Tax Appellate Tribunal Andhra Pradesh 2000-01 0.69 0.10
Central Excise Act 1944 Excise Duty CESTAT Bangalore 2007-08 0.46 0.10
Service Tax CESTAT Bangalore 2005-12 75.03 0.80
Service Tax CESTAT Hyderabad 2010-15 7.87 0.48
Finance Act 1994 Service Tax Commissioner (Appeals) Service Tax High Court of Judicature at Hyderabad 2005-08 0.39 0.10
Service Tax for the State of Telangana and the State of Andhra Pradesh 2007 -09 13.02 -

(viii) In our opinion and according to information and explanations given by themanagement the Company has not defaulted in repayment of dues to a financial institutionand banks. The Company did not have any outstanding dues to government or debentureholders.

(ix) In our opinion and according to the information and explanations given by themanagement the Company has not raised the monies by way of further public offer(including debt instruments). In our opinion and according to the information andexplanations given by the management the Company has utilised the monies raised by way ofterm loans for the purposes for which they were raised. (x) Based upon the auditprocedures performed for the purpose of reporting the true and fair view of the financialstatements and as per the information and explanations given by the management we reportthat no fraud on or by the Company has been noticed or reported during 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 by the management theCompany has complied with provisions of section 42 of the Companies Act 2013 in respectof Preferential allotment of share warrants during the year. According to the informationand explanations given by the management we report that the amounts raised have beenused for the purposes for which the funds were raised.

(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) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm registration number : 101049W/E300004
Per Navneet Rai Kabra
Partner
Membership No.102328
Place: Hyderabad
Date: May 24 2019

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE IND ASFINANCIAL STATEMENTS OF NCC LIMTED

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

We have audited the internal financial controls over financial reporting of NCC Limited("the Company") as of March 31 2019 in conjunction with our audit of thestandalone Ind AS 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting (the "GuidanceNote") and the Standards on Auditing as specified under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to thesestandalone Ind AS financial statements and their operating effectiveness. Our audit ofinternal financial controls over financial reporting included obtaining an understandingof internal financial controls over financial reporting with reference to these standaloneInd AS financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue 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 standalone Ind AS financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to theseStandalone Ind AS Financial Statements

A company's internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation ofstandalone Ind AS financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting with reference to these standalone Ind AS financial statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of 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 of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting WithReference to these Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone Ind AS financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone Ind AS financial statements to future periods are subject to the riskthat the internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements and such internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements were operating effectively as at March 312019 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm registration number : 101049W/E300004
Per Navneet Rai Kabra
Partner
Membership No.102328
Place: Hyderabad
Date: May 24 2019