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Sakthi Sugars Ltd.

BSE: 507315 Sector: Agri and agri inputs
NSE: SAKHTISUG ISIN Code: INE623A01011
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OPEN 8.97
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VOLUME 3600
52-Week high 14.20
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Mkt Cap.(Rs cr) 104
Buy Price 8.16
Buy Qty 150.00
Sell Price 8.79
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OPEN 8.97
CLOSE 8.98
VOLUME 3600
52-Week high 14.20
52-Week low 6.90
P/E
Mkt Cap.(Rs cr) 104
Buy Price 8.16
Buy Qty 150.00
Sell Price 8.79
Sell Qty 2000.00

Sakthi Sugars Ltd. (SAKHTISUG) - Auditors Report

Company auditors report

To The Members of Sakthi Sugars Limited

Report on the Audit of the Financial Statements

Opinion

1. We have audited the accompanying financial statements of Sakthi Sugars Limited("the Company") which comprise the Balance Sheet as at March 312019 and theStatement of Profit and Loss (including Other Comprehensive Income) Statement of Changesin Equity and Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 the loss and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

3. 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 Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Material Uncertainty Related to Going Concern

4. We draw attention to Note 40 of the Financial Statements. The company has incurrednet loss of Rs. 26676.22 lakhs during the year ended March 31 2019 and as of that datethe Company's accumulated losses aggregate to Rs. 37508.86 lakhs. Further as of thatdate company's current liabilities exceeded its current assets by Rs. 102416.02 lakhs.These factors along with other matters as set forth in said note raise substantial doubtabout the company's ability to continue as a going concern in the foreseeable future.However the company's financial statement has been prepared on going concern basis asdisclosed by management in said note. Our opinion is not modified in respect of thismatter..

Emphasis of Matter

5. Certain banks have classified its advance to company as Non-Performing Assets andare not charging/applying interest accrued. In order to account for all probableliabilities the management in its best judgement has provided interest including penalinterest as per the terms of original sanction on such borrowings. The management is ofthe opinion that the difference in interest if any shall be accounted for as and whenthe interest is charged or adjusted by the banks. Our opinion is not modified in respectof this matter.

Key Audit Matters

6. 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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

S.No. Key Audit Matter How the matter was addressed in the audit
6.1 Determination of net realizable value of inventory of sugar as at the year ended March 31 2019 Our audit procedures included the following:
(a) We understood and tested the design and operating effectiveness of controls as established by the management in determination of net realizable value of inventory of sugar.
(Refer to the accompanying note 1.4 and 7 forming integral part of the Financial Statements)
As on March 31 2019 the Company has inventory of sugar with the carrying value Rs. 4396.61 lakhs. The inventory of sugar is valued at the lower of cost and net realizable value. (b) We considered various factors including the actual selling price prevailing around and subsequent to the date of Balance Sheet minimum selling price & monthly quota and other notifications of the Government.
We considered the value of the inventory of sugar as a key audit matter given the relative size of the balance in the financial statements and significant judgement involved in the consideration of factors such as minimum sale price monthly quota fluctuation in selling prices and the related notifications of the Government in determination of net realizable value.
(c) Based on the above procedures performed the management's determination of the cost and net realizable value of the inventory of sugar as at the end of the year is considered to be reasonable
6.2 Assessment of litigations and related disclosure of contingent liabilities Our audit procedures included the following:
(a) We understood assessed and tested the design and operating effectiveness of key controls surrounding assessment of litigations relating to the relevant laws and regulations;
(Refer to the accompanying note 1.3 and 39(A) forming integral part of the Financial Statements)
As at March 312019 the Company has exposures towards litigations relating to various matters.
(b) We discussed with management the recent developments and the status of the material litigations which were reviewed and noted by the audit committee;
Significant management judgement is required to assess such matters to determine the probability of occurrence of material outflow of economic resources and whether a provision should be recognised or a disclosure should be made. The management judgement is also supported with legal advice in certain cases as considered appropriate.
(c) We performed our assessment on a test basis on the underlying calculations supporting the contingent liabilities/other significant litigations made in the Financial Statements;
(d) We evaluated management's assessments by understanding precedents set in similar cases and assessed the reliability of the management's past estimates/judgements; and
As the ultimate outcome of the matters are uncertain and the positions taken by the management are based on the application of their best judgement related legal advice including those relating to interpretation of laws/regulations it is considered to be a Key Audit Matter.
(e) We assessed the adequacy of the Company's disclosures. Based on the above work performed management's assessment in respect of litigations and related disclosures relating to contingent liabilities/other significant litigations in the Financial Statements are considered to be reasonable.

Other Information

7. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe financial statements and our auditor's report thereon. The Annual report is expectedto be made available to us after the date of this auditor's report.

8. Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.

9. In connection with our audit of the financial statements our responsibility is toread the other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

10. When we read the Annual report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and take necessary actions as per applicable laws and regulations.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

11. 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 financial statements that givea true and fair view of the financial position financial performance changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the accounting Standards specified under section 133 of theAct. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

12. In preparing the financial statements the Board of Directors 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 unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

13. Those Board of Directors are also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

14. 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.

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

(a) Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

(b) Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

(d) Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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.

(e) Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

16. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

17. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

18. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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

19. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable..

20. 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) the 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 financial statements comply with the Ind AS specifiedunder Section 133 of the Act.

(e) 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 312019 from being appointed as a director in terms of Section 164(2) of theAct.

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

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 39(A) to the financial statements;

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;

(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For P.K.NAGARAJAN & CO.
Chartered Accountants
Firm Registration Number: 016676S
PK. NAGARAJAN
Coimbatore Partner
May 28 2019 Membership Number: 025679

Annexure - A to the Independent Auditor's Report

Referred to in paragraph 19 of the Independent Auditor's Report of even date to themembers of Sakthi Sugars Limited on the financial statements for the year ended March 312019

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

(b) These fixed assets have been physically verified by the management at reasonableintervals. No material discrepancies were noticed on such physical verification.

(c) The title deeds of immovable properties as disclosed on Note No. 2 on PropertyPlant and Equipment to the financial statements are held in the name of the Companyexcept for land of Soya division acquired pursuant to scheme of amalgamation having acarrying value of Rs.2438.28 lakhs as at March 31 2019.

ii. As explained to us inventories have been physically verified by the management atregular intervals during the year. In our opinion the frequency of verification isreasonable. No material discrepancies were noticed on such physical verification.

iii. The Company had granted unsecured loan in earlier years to the erstwhile AssociateCompany covered in the register maintained under Section 189 of the Act and during theyear the loan has been fully repaid and there is an outstanding balance of Rs. 14711.49lakhs towards interest as at the date of balance sheet.

(a) The terms and conditions of the grant of loan to the erstwhile associate companyare not prejudicial to the interest of the company.

(b) Principal amount of the loan has been fully repaid during the year. Interest hasbeen charged during the last quarter of the year. As per the representation of themanagement of the company the interest has become due and payable on demand.

(c) In respect of the aforesaid loan principal has been fully repaid and the amount ofoutstanding interest is not overdue for more than ninety days.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act in respect ofthe loan given investments made security provided and guarantee given.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 to 76 of the Act and the rules framed there under.

vi. We have broadly reviewed the cost records maintained by the company specified undersub-section (1) of Section 148 of the Act and are of the opinion that the prescribedaccounts and records have been made and maintained.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the

Company the company is generally regular in depositing undisputed statutory dues withappropriate authorities except undisputed statutory dues relating to provident fund andgoods and services tax that have not generally been regularly deposited during the year bythe Company with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employee state insurance income-tax sales taxservice tax duty of customs duty of excise value added tax cess goods and servicestax and other material statutory dues were in arrears as at March 31 2019 for a period ofmore than six months from the date they became payable except Electricity Generation Taxas mentioned below:

Name of the Statute Nature of dues Amount (Rs.in lakhs) period to which the amount relates
Tamil Nadu Tax on Consumption or Sale of Electricity Act 2003 Electricity Generation Tax 167.72 30/06/2016 to 30/04/2018

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of duty of customs and value added tax whichhave not been deposited on account of any dispute. The particulars of dues of income taxsales tax duty of excise and service tax as at March 31 2019 which have not beendeposited on account of dispute are as follows:

Name of the Statute Nature of dues Amount (Rs.in lakhs) period to which the amount relates Forum where the dispute is pending
The Income Tax Act 1961 Penalty 3189.24 2005-06 2010-112011-12 2012-13 2014-15 2016-18 Commissioner of Income Tax (Appeals) Coimbatore
187.41 2010-112011-12 ITAT Chennai
Tamilnadu General Sales Tax Act Sales Tax 1056.09 1983-84 to 1995-96 1989-90 to 1994-95 Madras High Court Chennai
1959 28.25 2000-01 Additional Commissioner (CT)/(RP) Chennai.
The Central Excise Excise Duty 5.49 2002-03 Madras High Court Chennai
Act 1944 442.26 2007-08 2010-12 2015 CESTAT Chennai.
236.81 2006-07 2008-2010 2016-17 Commissioner of Central Excise (Appeals).
The Bihar & Orissa Excise Act 1915 Excise Duty 12.63 2002-03 High Court of Orissa Cuttack.
Finance Act 1994 Service Tax 265.90 2005 2006 2007 2008 2009-2013 2014-15 CESTAT Chennai.
1.47 2014-15 Commissioner of Central Excise (Appeals).

viii. According to the records of the Company examined by us and the information andexplanations given by the management the Company has not issued debentures. The defaultsby the Company as at the balance sheet date in repayment of loans to banks financialinstitutions and Government are as under:

(a) Default in repayment of loans to Bank

particulars

Amount of default as at 31.03.2019 (Rs.in lakhs)

period of Default

principal Interest principal Interest
1 Rupee Term Loan from Bank of India 436.70 881.36 June 2016 to December 2018 April 2016 to February 2019
2 Term Loan from Bank of India 436.77 881.41 June 2016 to December 2018 April 2016 to February 2019
3 Corporate Loan from Bank of India 220.49 444.98 June 2016 to December 2018 April 2016 to February 2019
4 Rupee Term Loan from Punjab National Bank 3197.37 1910.57 October 2012 to January 2019 December 2015 to February 2019
5 Working Capital Term Loan from Bank of India 155.19 313.20 June 2016 to December 2018 April 2016 to February 2019
6 Working Capital Term Loan from Bank of India 325.54 656.92 June 2016 to December 2018 April 2016 to February 2019
7 Funded Interest Term Loan from Bank of India 102.99 205.77 June 2016 to December 2018 April 2016 to February 2019
8 Funded Interest Term Loan from Bank of India 343.99 704.74 June 2016 to December 2018 April 2016 to February 2019
9 Funded Interest Term Loan from Punjab National Bank 330.19 194.12 December 2012 to January 2019 December 2015 to February 2019
10 FCCB Term Loan from Axis Bank Limited 2977.60 677.44 August 2017 to February 2019 August 2017 to February 2019
11 FCCB Term Loan from Bank of India 615.00 1237.29 June 2016 to December 2018 April 2016 to February 2019
12 SEFASU Loans from Bank of India 3757.93 51.85 November 2016 to February 2019 February 2019
13 SEFASU Loans from Indian Overseas Bank 2686.17 929.95 April 2016 to February 2019 January 2017 to February 2019

(b) Default in repayment of loans to Financial Institutions

particulars

Amount of default as at 31.03.2019 (Rs.in lakhs)

period of Default

principal Interest principal Interest
1 Asset Reconstruction Company (India) Limited [HDFC Bank Limited] 2308.97 3843.03 February 2019 October 2015 to March 2019
2 Asset Reconstruction Company (India) Limited [Canara Bank] 8100.92 9261.08 February 2019 October 2015 to March 2019
3 Asset Reconstruction Company (India) Limited [State Bank of India] 7050.49 7759.52 February 2019 October 2015 to March 2019
4 Asset Reconstruction Company (India) Limited [IDBI Bank] 3847.98 5970.02 February 2019 October 2015 to March 2019
5 Asset Reconstruction Company (India) Limited [Indian Overseas Bank] 6241.16 6333.83 February 2019 October 2015 to March 2019
6 Asset Reconstruction Company (India) Limited [Allahabad Bank] 1730.62 1635.38 February 2019 October 2015 to March 2019

(c) Default in repayment of loan to Government:

particulars

Amount of default as at 31.03.2019 Rs.in lakhs)

period of Default

principal Interest principal Interest
1 Sugar Development Fund Loan 4416.41 3290.84 May 2013 to February 2019 May 2011 to February 2019

ix. The Company has neither raised any money by way of initial public offer or furtherpublic offer (including debt instruments) nor availed any term loan during the year.Accordingly paragraph 3(ix) of the Order is not applicable.

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

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not paid/provided anymanagerial remuneration during the year. Accordingly paragraph 3(xi) of the Order is notapplicable.

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

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act. The details of such transactions havebeen disclosed in the financial statements as required by the applicable accountingstandards.

xiv. During the year under review the Company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures.

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

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable.

For P.K. NAGARAJAN & Co.
Chartered Accountants
Firm Registration Number: 016676S
P.K. NAGARAJAN
Coimbatore Partner
May 28 2019 Membership Number: 025679

Annexure - B to the Independent Auditor's Report

Referred to in paragraph 20(f) of the Independent Auditor's Report of even date to themembers of Sakthi Sugars Limited on the financial statements for the year ended March 312019

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

1. We have audited the internal financial controls over financial reporting of SakthiSugars Limited ("the Company") as of March 31 2019 in conjunction with ouraudit of the financial Statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. 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

3. 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 ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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

5. 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

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of 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:

(a) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(b) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(c) 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 financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. 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

8. 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 issued by the Institute of CharteredAccountants of India.

For PK. NAGARAJAN & Co.
Chartered Accountants
Firm Registration Number: 016676S
P.K. NAGARAjAN
Coimbatore Partner
May 28 2019 Membership Number: 025679