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NLC India Ltd.

BSE: 513683 Sector: Infrastructure
NSE: NLCINDIA ISIN Code: INE589A01014
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OPEN 56.80
PREVIOUS CLOSE 57.15
VOLUME 55726
52-Week high 85.50
52-Week low 49.15
P/E 6.40
Mkt Cap.(Rs cr) 8,285
Buy Price 59.20
Buy Qty 400.00
Sell Price 59.55
Sell Qty 91.00
OPEN 56.80
CLOSE 57.15
VOLUME 55726
52-Week high 85.50
52-Week low 49.15
P/E 6.40
Mkt Cap.(Rs cr) 8,285
Buy Price 59.20
Buy Qty 400.00
Sell Price 59.55
Sell Qty 91.00

NLC India Ltd. (NLCINDIA) - Auditors Report

Company auditors report

To

The Members of NLC INDIA LIMITED

(Formerly Neyveli Lignite Corporation Limited) Report on the Standalone FinancialStatements Opinion

We have Audited the accompanying standalone financial statements of NLC INDIALIMITED (Formerly Neyveli Lignite Corporation Limited) ("the Company")which comprise the Balance Sheet as at 31st March 2019 the Statement of Profit and Loss(including other Comprehensive income) the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and a summary of the significant accountingpolicies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs (financialposition) of the Company as at 31st March 2019 and its profit total comprehensiveincome changes in equity and its Statement of 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 CompaniesAct 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 Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the Audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key Audit matters are those matters that in our professional judgment were of mostsignificance in our Audit of the financial statements of the current period. These matterswere addressed in the context of our Audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

The following have been considered as Key Audit Matters of Holding Company - NLC IndiaLimited

Sl. No. Key Audit Matters Auditor's Response
1. Revenue recognition on sale of power to entities (DISCOMS) and the disclosure requirements vis--vis the requirements for complying with IND AS-114- Regulatory Deferral Accounts & IND AS-115 - Revenue from Contracts with Customers. We have analysed the accounting principles consistently followed by the Company for recognition of the revenue arising on sale of power commencing from financial year 2016-17 where in the Company has opted for complying with IND AS 114 (Regulatory Deferral Accounts). It is observed by us that the accounting policy followed by the company for revenue recognition is in accordance with the principles laid down by IND AS 114 dealing with recognition of revenue by companies whose tariff rates are governed by the orders of a rate regulator which in this case is Central Electricity Regulatory Commission / State Electricity Regulatory Commission. It is observed that the consideration of various items under "Net movement in regulatory deferral account balances" and the treatment in the Audited accounts are in compliance with the accounting principles laid down in INDAS 114.
The Central Electricity Regulatory Commission (CERC)/ State Electricity Regulatory Commission (SERC) determine the tariff rates to be charged by the company for the sale of thermal and renewable power respectively. Tariff rates for sale of thermal power are determined by CERC for a block of 5 years and the rates prescribed for the block period 2014-2019 have been considered by the Company for recognising the revenue under operating income - sale of power. The tariff for thermal power includes lignite transfer price which is determined in accordance with the guidelines issued by the Ministry of Coal (MoC).
In addition to the recognition of revenue as stated above the Company recognises certain items of income / expenditure in accordance with Mandatory Accounting Standard - IND AS 114 - Regulatory Deferral Accounts. Accordingly the Company has recognised Rs. 859.41 crore as Net Movement in Regulatory Deferral Account balances in the Statement of Profit and Loss with a corresponding impact under Regulatory Deferral Assets/Liabilities. Refer Note Nos.1 (XV) & 1 (XXVI) and Note No.29 of the standalone Financial statements.
2. Accounting of Surcharge
Due from entities (DISCOMS) for any delay in the settlement of claims due to the Company results in levy of surcharge in accordance with the terms and conditions of the agreement entered into for the sale of power. For the financial year 2018-19 the Company has recognised a sum of द 478.37 crore as surcharge under other income - Refer Note No.23 - on Financial statements. Accounting of surcharge was examined by us to ensure that all the material amounts of surcharge accounted by the Company as income were in accordance with the terms and conditions of the contracts entered into by the Company with DISCOMS.
3. Disputed Tax demands - Direct and Indirect taxes and measurement and the related disclosure in accordance with IND AS - 37 Provisions Contingent Liabilities and Contingent Assets. Details of the tax liabilities contested in the appeals were obtained and analyzed by us to ensure that the amount of द 368.78 crore disclosed under contingent liability had not become ascertained liability as on 31-03-2019.
There are several items of disputes pending in various appellate forums in respect of determination and quantification of liability towards direct and indirect taxes by the departments. Liabilities in respect of disputed demands are considered only as contingent liabilities pending the outcome of the decision of the appellate authorities. The total amount of disputed liabilities on account of Direct and Indirect taxes as disclosed in Note No.53 is द 368.78 core. - Orders of the Appellate authorities for the adjudication of similar items in the earlier accounting years in favor of the Company were perused to evaluate the similarity of the facts and also to ensure the disclosure of the disputed demands under contingent liability was in accordance with the requirements of IND AS-37 Provisions Contingent Liabilities and Contingent Assets
- The contention of the management as to the contingent nature of liabilities was also analysed in the light of expert legal opinion obtained by the Company.
4. Amounts disclosed under contingencies and commitments - from others - Note No.53. We have verified the list of claims made by third parties. Status of the appeals filed and pending for disposal as on 31st March 2019 was analysed. It was observed that there was no change in the status as compared to 31 st March 2018.
Asum of द 11434.18 crore has been considered by the Company under the above head.
This sum represents claims of third parties including the compensation for land acquisition and contractors. The Company has not accepted the said claims which are contested in legal proceedings and are pending for disposal by the appellate authorities. We have obtained the details of project activities of Bithnok and BTPSE project from the management.
5. Amount of द 349.13 crore included under Capital Work in Progress (project Put on Hold) Bithnok and BTPSE Project. We have noted that the company has incurred capital expenditure of द 349.13 crore and द 168.17 crore in Bithnok and BTPSE project respectively which includes land of Rs. 176.92 crore and capital advance of द 261.72 crore. On the basis of clarification received from management current year expenses also have been capitalised in the project cost.
We have obtained the information from records and found that Rajasthan government has accorded in-principle approval for revival of the project with certain conditions.
We have obtained the management reply that the discussions with Rajasthan Government and M/s. Reliance Infrastructure Limited by NLCIL's top level management for revival of the project are under progress.

Management's Responsibility for the Standalone 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 financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

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.

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

Auditors' 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 error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

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

• Obtain an understanding of internal control relevant to the Audit in order todesign Audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the Audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our Auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the Audit evidence obtained up to the date of our Auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements 29 including the disclosures and whether the financial statements representthe underlying 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.

Emphasis of Matter

We draw attention to the Note No.29 -Net movement in regulatory deferral accountbalances Income/expenses -to the Standalone financial statements:

a. As explained in the said note a sum of द 131.29 crore along with period cost hasbeen de-recognised under regulatory deferral liabilities during the current financial yearon account of redetermination of the estimated liabilities arising out of orders of CERCin respect of sharing of incentives and revenue on sale of lignite to outsidersrespectively and inclusion of the said amount under Regulatory deferral income

b. Our opinion is not modified in respect of the said matter.

Other Matter

We did not Audit the financial statements of One (1) Branch included in the StandaloneFinancial Statements of the Company which reflected a total asset of द 1628.51 crore asat March 31 2019 and a total revenue of द 188.81 crore for the year ended on that date.The financial statements of this Branch have been Audited by the Branch Auditor whosereport has been furnished to us and our opinion in so far as it relates to the amountsand disclosures included in respect of this Branch is based solely on the report of suchBranch Auditor.

Our opinion is not modified in respect of this matter.

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 Annexure-I a statement on the matters specified in paragraphs 3 and 4of the said Order to the extent applicable.

2. As required by Section143(3) of theAct 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 reports on accounts of the Branch Office of the Company Audited under Sec143(8) of the Act by the Branch Auditor have been sent to us and have been properly dealtwith by us in preparing this report.

(d) The Balance Sheet the Statement of Profit and Loss Cash Flow Statement and theStatement of Changes in Equity dealt with by this Report are in agreement with the booksof accounts.

(e) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.

(f) As per Notification No: G.S.R 463(E) dated 05.06.2015 subsection (2) of Sec 164 ofthe Companies Act 2013 is not applicable to Government Companies.

(g) With respect to adequacy of the internal financial control over financial reportingof the company and the operating effectiveness of such controls we give our report inAnnexure-II. Our report expresses an unmodified opinion on the operating effectiveness ofthe Company's internal financial controls over financial reporting.

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies ( Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer to Note 51 to financialstatements.

ii. The Company has long term contracts for coal mining power sale project executionetc. However as at March 31 2019 there were no material foreseeable losses on thosecontracts. The company did not have any derivative contracts as at March 31 2019

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

3. As required by Sec 143(5) of the Companies Act 2013 our comments in regard to thedirections and sub-directions issued by the Comptroller and Auditor General of India isgiven inAnnexure-III.

FOR M/s.CHANDRAN & RAMAN FOR M/s. PKKG BALASUBRAMANIAM & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Regn. No.000571S Firm Regn. No.001547S
S. PATTABIRAMAN C. RAMESH
Partner Partner
M No.014309 M No.025985
Place : Neyveli
Date : 30th May 2019

Annexure-I to Independent Auditors' Report

Statement of matters specified in Para 3 & 4 of the order referred to insub-section (11) of section 143

The Annexure referred to in our report to the members of NLC INDIA LTD (the Company')for the year Ended on 31.03.2019:

1. Fixed Assets

a. The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

b. The Company is having a regular programme of physical verification of all fixedassets (Property Plant and Equipment) over a period of 2 years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies were noticed on such verification.

2. Inventory

The inventory has been physically verified at reasonable intervals by the management.No material discrepancies were noticed during such verification.

3. Transactions of loans with parties covered by register referred to in section189

The Company has granted unsecured loan to a subsidiary Company and to a director of theCompany covered by the register maintained under section 189 of the Companies Act 2013:

a. In our opinion the terms and conditions of grant of the loans are not prejudicialto the interest of the Company.

b. According to the information and explanations given to us the schedule of repaymentof principal and payment of interest has been stipulated while granting such loans and therepayment/receipts are regular.

c. No amounts are overdue for more than 90 days.

4. Compliance with section 185 & 186 in respect of Loans and Investments

The Company has not advanced loans given guarantees or security or made any investmentin contravention of section 185 and/or section 186 of the Companies Act 2013.

5. Public Deposits

In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from public and hence the provisions of sections 73 to76 or any other relevant provisions of the Companies Act and the rules made there underare not applicable to the Company.

6. Maintenance of Cost Records

The Central Government has prescribed the maintenance of cost records U/s. 148(1) ofthe Companies Act 2013 in respect of Electricity Industry and Lignite. We have broadlyreviewed the books of account maintained by the Company pursuant to the Rules made by theCentral Government for the maintenance of cost records under section 148 of theAct andare of the opinion that prima facie the prescribed accounts and records have been madeand maintained.

7. Statutory dues

a. The Company has generally been regular in depositing Provident Fund dues of its ownemployees. Based on the information and explanations given to us the Company has laid downsystem and procedures regarding deposit of PF and ESI dues relating to contractors'workers. The Company has generally been regular in depositing Income-tax Sales TaxService Tax duty of customs duty of excise value added tax cess GST and any otherstatutory dues to the appropriate authorities.

Based on information and explanation given to us no undisputed amounts payable inrespect of Income Tax Sales Tax Service Tax Customs Duty Excise Duty Value Added TaxCess GST and any other statutory dues were outstanding as at 31st March 2019 for a periodof more than six months from the date they became payable.

b. According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Customs duty Wealth Tax Excise Duty Value Added Tax Cess andGST which have not been deposited on account of any dispute except as reported below:

Name of the Statute Nature of Dues Demand Amount (Rs.) in lakh Amount Deposited under Protest (Rs. in lakh) Period to which the amount relates Forum where dispute is pending
Customs Act 1962 Customs Duty 2685.00 983.00 - CESTAT
7481.82 - AY 2013-14 ITAT
Income Tax Act Income Tax 6814.83 - AY 2014-15 ITAT
3089.11 617.82 AY 2011-12 CIT(A)
12936.47 2587.29 AY 2015-16 CIT(A)
651.47 130.29 AY 2016-17 CIT (A)
89.56 6.72 Apr 2009 to Jun 2012 CESTAT
51.34 7.00 Jul 2012 to Mar 2014 CEC(A)
Finance Act 1994 Service Tax 852.59 63.94 Jul 2012 to Mar 2015 CESTAT
366.59 27.49 Jul 2012 to Mar 2014 CESTAT
25.54 2.55 Apr 2014 to Mar 2015 CESTAT
9.24 0.92 Apr 2014 to Mar 2015 CEC(A)
121.37 12.14 Apr 2014 to Mar 2015 CEC(A)
205.62 - Jun 2008 to Mar 2012 CESTAT
72.83 5.46 Apr 2015 to June 2017 CEC(A)
1417.27 106.30 Apr 2015 to June 2017 CEC(A)
8.05 0.60 Apr 2015 to June 2017 CEC(A)

8. Repayment of Loans

The Company has not defaulted in repayment of loans or borrowing to a financialinstitution bank government or dues to debenture holders during the relevant financialyear.

9. Raising of monies through Public Offer and/or Term Loans

According to the information and explanations given to us the monies raised by way ofterm loans were applied for the purposes for which those were raised.

10. Frauds

According to the information and explanations given to us no fraud by the Company orany fraud on the Company by its officers or employees has been noticed or reported duringthe year.

11. Managerial Remuneration

As per Notification No. GSR 463(E) dated 5th June 2015 issued by the Ministry ofCorporate Affairs Government of India Section 197 of the Act is not applicable to theGovernment Companies. Accordingly provisions of clause 3 (xi) of the Order are notapplicable to the Company.

12. Compliance with Net Owned Funds Ratio & unencumbered term deposits

The Company is not a Nidhi Company and hence the provisions para 3(xii) of the orderreferred to in Companies ( Auditor's Report) Order 2016 issued by the Central Governmentof India in terms of subsection (11) of Section 143 of theAct do not apply to the Company.

13. Transaction with Related Parties

In our opinion all transactions with the related parties are in compliance with theprovision of section 177 and 188 of Companies Act 2013 wherever applicable and thedetails have been disclosed in the Financial Statements etc. as required by theapplicable accounting standards.

14. Preferential Allotment or Private Placement

The Company has not made any preferential allotment or private placement of shares orfully or partly convertible debentures during the year under review.

15. Non-cash transactions

The Company has not entered into any non-cash transactions with directors or personsconnected with him as referred to in section 192 of the CompaniesAct 2013.

16. Registration with Reserve Bank of India

The Company is not carrying any activities which require registration under section45-IA of the Reserve Bank of IndiaAct 1934.

FOR M/s. CHANDRAN & RAMAN FOR M/s. PKKG BALASUBRAMANIAM & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Regn. No.000571S Firm Regn. No.001547S
S. PATTABIRAMAN C. RAMESH
Partner Partner
M No.014309 M No.025985
Place : Neyveli Date : 30th May 2019

Annexure-II to 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")

We have Audited the internal financial controls over financial reporting of NLCINDIA LIMITED (formerly Neyveli Lignite Corporation Limited) ("the Company")as of March 31 2019 in connection with our Audit of the standalone financial statementsof 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 Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe CompaniesAct 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our Audit. We have conducted our Audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an Audit of internal financial controls both applicable to an Auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 Auditinvolves performing procedures to obtain Audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness.

Our Audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the Auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the Audit evidence we have obtained is sufficient and appropriate toprovide a basis for our Audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of CharteredAccountants ofIndia.

Other Matter

We did not Audit the Internal Financial Control over Financial Reporting of ONE (1)branch included in the standalone financial statements of the Company. The adequacy ofinternal financial controls system over financial reporting and the operatingeffectiveness of such internal financial controls over financial reporting conducted bythe branch Auditor whose report has been furnished to us and our opinion in so far as itrelates to the amounts and disclosures included in respect of this branch is based solelyon the report of such branch Auditor. Our opinion is not modified in respect of thismatter.

FOR M/s. CHANDRAN & RAMAN FOR M/s. PKKG BALASUBRAMANIAM & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Regn. No.000571S Firm Regn. No.001547S
S. PATTABIRAMAN C. RAMESH
Partner Partner
M No.014309 M No.025985
Place : Neyveli
Date : 30th May 2019