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Pritish Nandy Communications Ltd.

BSE: 532387 Sector: Media
NSE: PNC ISIN Code: INE392B01011
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OPEN 13.55
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VOLUME 80
52-Week high 19.75
52-Week low 7.50
P/E 18.87
Mkt Cap.(Rs cr) 20
Buy Price 12.85
Buy Qty 490.00
Sell Price 14.70
Sell Qty 9.00
OPEN 13.55
CLOSE 14.15
VOLUME 80
52-Week high 19.75
52-Week low 7.50
P/E 18.87
Mkt Cap.(Rs cr) 20
Buy Price 12.85
Buy Qty 490.00
Sell Price 14.70
Sell Qty 9.00

Pritish Nandy Communications Ltd. (PNC) - Auditors Report

Company auditors report

To

The Members

PRITISH NANDY COMMUNICATIONS LIMITED Report on the Audit of Standalone FinancialStatements OPINION

We have audited the accompanying standalone financial statements of PRITISH NANDYCOMMUNICATIONS LIMITED ("the Company") which comprise the Balance sheet as atMarch 312019 and the statement of profit and loss (including Other ComprehensiveIncome) Statement of Changes in Equity and Statement of Cash Flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the standalone financial statements").

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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2019 and its profit (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the standalone financialstatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

EMPHASIS OF MATTER

We draw attention to Note 36(a) on the standalone financial statements which relates toinvestment in wholly owned subsidiary company "PNC Wellness Ltd". The investmentin this subsidiary stands at Rs 116.40 lakh whereas the net worth of the subsidiary is'33.42 lakh as at March 31 2019. Considering that the Company has made provision fordiminution in value of investment in this subsidiary by 1/5* of its book value andconsiders the balance retained book value as fully realizable no further provision is madefor the diminution in book value of investment which is considered as temporary.

We further draw attention to Note 36(b) on the standalone financial statements whichrelates to investment in subsidiary company "PNC Digital Ltd". The investment inthis subsidiary stands at' 70.20 lakh whereas the net worth of the subsidiary is Rs 7.56lakh as at March 31 2019. The Company has agreed to provide its films to this subsidiarycompany to explore revenue opportunities on the digital platform and exploit it to itscommercial advantage. In view of the fact that this subsidiary has unfettered access tothe film content of the Holding company and requires no additional substantive capitaldeployment to generate revenue no provision for diminution in value of investment whichis considered temporary has been made in the accounts.

We further draw attention to Note 38(a) on the standalone financial statements whichdescribe the facts related to the legal proceedings initiated by the Company for therecovery of an advance of Rs 150 lakh. The management considers the same as good and fullyrecoverable. The legal opinion obtained by the Company supports this. We have relied onthe opinion and consequently the Company has not made provision of any amount thereagainst.

We further draw attention to Note 38(b) on the standalone financial statements whichdescribes that the Company has received an award of Rs 352 lakh in its favour in thearbitration case filed against White Feather Films. The Company has also received arevised order for the amount of interest which the Company has not found satisfactory andhence it has moved an appeal with the Bombay High Court. White Feather Films has gone inappeal against the above said award and has been directed to deposit an amount of Rs 300lakh by the Bombay High Court. Proceedings are ongoing and in view of the sameoutstanding of Rs 317.53 lakh is considered as fully recoverable.

We further draw attention to Note 39 on the standalone financial statements whichdescribes the facts related to the arbitration proceedings initiated by the Companyagainst Prasar Bharati on account of wrongful encashment of bank guarantee of Rs 750.50lakh. The Company has obtained legal opinion from Justice AM Ahmadi former Chief Justiceof Supreme Court of India which supports the Company's stand that the amount is fullyrecoverable and hence no provision is made there against.

Our opinion is not modified in respect of the above matters.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professionaljudgment 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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

a. Valuation of Inventory (as described in Note 9 and Note 2.5 of the standalonefinancial statements)

Description of Key Audit Matter

Inventory includes Cinematic Content and Television Content. Cinematic Content includesIncomplete Cinematic content Abandoned/ shelved cinematic content and Completed cinematiccontent. Television Content includes unexploited television content unfinished televisioncontent production property and exploited television content.

Considering the distinctiveness of each type of inventory the industry in which theCompany is operating and the peculiarity involved makes valuation a complex exercise.Additionally the allocation of cost is done on the basis of genre nature of thecinematic content involving significant judgments and estimates by the management. Thevalue of the Company's Inventories as at March 31 2019 amounts to Rs 5698.40 lakh whichis a significant component of the balance sheet. Therefore we have considered it to be akey audit matter.

Description of Auditor's response

We have gained adequate understanding of the nature of Inventories and applied theprescriptions given in Ind AS 2 in their context.

We analysed the valuation approaches adopted by management for each class ofInventories for their appropriateness. We also audited the methodology used by the Companyand verified reasonableness of costs allocated and estimates applied by the Companyincluding useful life of the content implications of technological changes and otherfactors mention in Note 40 to the standalone financial statements. Further we havereviewed the valuation carried out on the basis of the accounting policy includingrealizations made in the past and expectation of future potential to earn there from.Finally the appropriateness and adequacy of the presentation and disclosure of Inventoryin the financial statements was audited.

b. Amortisation of Inventory (as described in Note 2.5 and Note 40 of the standalonefinancial statements)

Description of Key Audit Matter

Inventory of Company are intangible in nature. Determination of useful life ofIntangible assets involves significant estimates by the management which involves theexpected usage of the asset by the Company product life cycles technical technologicalor other types of obsolescence and various other factors mentioned in Note 40 to thestandalone financial statements. Cost of inventory is divided into components such asmusic rights rights other than music such as theatrical rights satellite others andresidual rights. Each of these components of costs are amortised by the management overtheir respective estimated useful lives as described in Note 2.5 and Note 40 to thestandalone financial statements.

Considering the significant estimates involved by the management and its complexity wehave considered it to be a Key audit matter.

Description of Auditor's response

Audit procedure included detailed review of rationale documented by the management forascertaining useful life of intangible assets basis of allocation of costs into differentcategories basis of its amortization as per manner provided in Note 2.5 and Note 40 tostandalone the financial statements. In addition we also verified the industry practicepast trends examined the transactions to ascertain that amortization is in accordancewith accounting policy.

c. Revenue Recognition (as described in Note 2.8 and Note 25 of the standalonefinancial statements)

Description of Key Audit Matter

Revenue (as disclosed in Note 25) from each stream of income is contracted uniquelybased on number of factors. Costs incurred from conceptualisation onwards is typical tothe industry and the Company considering the uncertainty and measurability of eventualsuccess of a project. There are often timing differences between when revenue/costinvoiced/incurred to when revenue/cost is actually earned/ charged. The resultantbifurcation between accruals and deferrals are brought to account at each reporting date.

The accounting policies for revenue recognition are set out in Note 2.8 to thestandalone financial statements. This is considered to be a key audit matter due tosignificance of revenue in the statement of profit and loss and the complexity involved inthe revenue cycle for determination of existence accuracy and timing of revenuerecognition.

Description of Auditor's response

Audit procedure relating to existence accuracy and timing of revenue recognitionincluded reading the terms and conditions of contracts relating to different classes ofcontracts examination of transactions cut off procedures to check that revenue isaccrued in the correct accounting period review of controls and analytical procedurescovering revenue direct costs and margins for different revenue streams were auditedamongst other things.

d. Advance for Content (as described in Note 8 of the standalone financial statements)

Description of Key Audit Matter

Company carries out number of long-term in-house content development projects for whichit incurs costs for title registration advances to writers pre-shoot expenses advancefor finalizing cast professional fees etc. These amounts have different ageing dependingonthe progress of each project. These costs are classified as ‘Advance for Content'amounting to Rs 1823.37 lakh as at March 312019 which is a significant component of thebalance sheet. Therefore we have considered it to be a key audit matter.

Description of Auditor's response

Audit procedure included understanding from the technical team about its realizablevalue its future viability and management contention to continue with the projectincluding considerations for write off / impairment based on future plans of the Company.We verify the existence of title in the name of the Company the agreements and obtainingconfirmation for material amounts. Finally the appropriateness and adequacy of thepresentation and disclosure of Advance for Content in the financial statements wasaudited.

OTHER INFORMATION

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Chairman'sStatement Management Discussion and Analysis Board's Report including Annexures toBoard's Report and Corporate Governance but does not include the standalone financialstatements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information we are required to report that fact. We have nothing to reportin this regard.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONEFINANCIAL 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 financialstatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone 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 Board of Directors are also responsible for overseeing the Company's financialreporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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 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 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

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 financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c. The balance sheet the statement of profit and loss (including Other ComprehensiveIncome) Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e. On the basis of the written representations received from the Directors as onMarch312019taken on record by the Board of Directors none of the directors isdisqualified as on March 312019 from being appointed as a Director in terms of section164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B"

g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its Directors during the year is inaccordance with the provisions of section 197 of the Act.

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 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 38 and Note 39 to thestandalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

For BD Jokhakar and Co.
Chartered Accountants
Firm Registration number 104345W
Pramod Prabhudesai
Partner
Mumbai May 282019 Membership number 032992

ANNEXURES TO INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of Independent Auditors' Report on standalone financial statementsof even date)

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

b. According to the information and explanations given to us fixed assets have beenphysically verified by the management during the year and in our opinion the frequency ofverification is reasonable having regard to the size of the Company and the nature of itsassets. We are informed that no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no immovable properties held by theCompany. Therefore sub clause (c) of the paragraph 3 (i) of the Order is not applicableto the Company.

ii. As explained to us by the management the production/ making of content requiresvarious types qualities and quantities of content related consumables and inputs indifferent denominations. Due to the multiplicity and complexity of items it is notpracticable to maintain quantitative record/ continuous stock register as the process ofmaking content is not amenable to it. All the purchases of content related consumables aretreated as consumed. In view of this the Company does not maintain stock register exceptthe record of the finished content unamortised content unfinished content and also doesnot carry out physical verification of stock. However management physically verifies thefinished content in the hand at the end of the year.

iii. As informed to us the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013.

iv. According to the information and explanations given to us the Company has notgiven any loans made investments provided guarantees and securities during the year ascontemplated under section 185 and 186 of the Act.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from the public during the year. Therefore paragraph3(v) of the Order is not applicable.

vi. According to information and explanations given to us the maintenance of costrecords under Section 148 (1) of the Act is not prescribed under the Companies (CostRecords and Audit) Rules 2014.

vii. a. According to information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income- tax goods and services tax duty of customs duty of excise cess andother material statutory dues as applicable to it have been regularly deposited during theyear by the Company with the appropriate authorities. As explained to us there were noundisputed statutory dues as mentioned above in arrears as at March 312019 for a periodof more than six months from the date they became payable.

b. According to the information and explanations given to us the dues in respect ofincome tax (including TDS) sales tax service tax goods and service tax duty ofcustoms duty of excise and value added tax that have not been deposited with theappropriate authorities on account of dispute and the forum where the disputes are pendingas on March 312019 are as given below:

Name of the statute Nature of the dues Amount inlakh* Period to which it relates Forum where dispute is pending
MVAT Act 2002 Tax and Interest 27.24 FY 2005-2006 Deputy Commissioner of Sales Tax Appeals -1 Mumbai
MVAT Act 2002 Tax Interest and Penalty 2.85 FY 2006-2007 Deputy Commissioner of Sales Tax Appeal Mumbai
Name of the statute Nature of the dues Amount inlakh* Period to which it relates Forum where dispute is pending
MVAT Act 2002 Interest 37.88 FY 2007-2008 Deputy Commissioner of Sales Tax Appeals - II Mumbai
MVAT Act 2002 Interest 0.99 FY 2008-2009 Deputy Commissioner of Sales Tax Appeals -1 Mumbai

*Interim Stay has been granted in these matters till disposal of respective firstappeals.

viii. According to the information and explanations given to us the Company has notdefaulted in repayment of dues to financial institutions. The Company did not have anyoutstanding debentures dues to banks and Governments.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. In our opinion and according tothe explanations given to us on an overall basis the term loans were applied for thepurposes for which those were raised.

x. To the best of our knowledge and belief and according to the information andexplanations given to us no material fraud on or by the Company has been noticed orreported during the course of our audit.

xi. According to the information and explanations given 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 of the Act.

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

xiii. In our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company all transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable and thedetails have been disclosed in Note 34 of the standalone financial statements as requiredby the applicable accounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company no preferential allotment or private placementof shares or fully or partly convertible debentures has been made by the Company duringthe year under review. Therefore paragraph 3(xiv) of the order is not applicable.

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 any non-cashtransactions with directors or persons connected with him as specified under section 192of the Act. Therefore paragraph 3(xv) of the order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 and therefore the provisions of paragraph 3(xvi) of the order isnot applicable.

For BD Jokhakar and Co.
Chartered Accountants
Firm Registration number 104345W
Pramod Prabhudesai
Partner
Mumbai May 282019 Membership number 032992

ANNEXURE B TO INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of Independent Auditors' Report on standalone financial statementsof even date)

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 PritishNandy Communications Limited ("the Company") as of March 31 2019 in conjunctionwith our audit of the standalone 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 Act.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both 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 was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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 standalone 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 the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of standalone 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 standalone financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

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

OPINION

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issuedby the Institute of CharteredAccountants ofIndia.

For BD Jokhakar and Co.
Chartered Accountants
FirmRegistrationnumber 104345W
Pramod Prabhudesai
Partner
Mumbai May 282019 Membership number 032992