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Sicagen India Ltd.

BSE: 533014 Sector: Others
NSE: SICAGEN ISIN Code: INE176J01011
BSE 00:00 | 22 Sep 24.80 0.75
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NSE 05:30 | 01 Jan Sicagen India Ltd
OPEN 24.50
PREVIOUS CLOSE 24.05
VOLUME 7231
52-Week high 28.60
52-Week low 10.31
P/E 9.25
Mkt Cap.(Rs cr) 98
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 24.50
CLOSE 24.05
VOLUME 7231
52-Week high 28.60
52-Week low 10.31
P/E 9.25
Mkt Cap.(Rs cr) 98
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sicagen India Ltd. (SICAGEN) - Auditors Report

Company auditors report

To the Members of SICAGEN INDIA LIMITED Report on the Audit of theStandalone Financial Statements

Opinion

We have audited the standalone financial statements of SICAGEN INDIALIMITED ("the Company") which comprise the Balance Sheet as at March 312020 the Statement of Profit and Loss (including Other Comprehensive Loss) the Statementof Changes in Equity and the Statement of Cash Flows for the year ended on that date andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as "the standalonefinancial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 312020the profit and total comprehensive Loss and changes in equity and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Standalone Financial Statements section of our report. We are independent ofthe Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Companies Act 2013 andthe Rules there under and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Emphasis of Matter

We draw attention to Note 1.4 & 24.2 to the financial statementswhich describes the uncertainties and the impact of the Covid-19 pandemic on the Company'soperations and results as assessed by management. The actual results may differ from suchestimates depending on future developments. Our opinion is not modified in respect of thismatter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.We have determined the matters described below to bethe key audit matters to be communicated in our report.

Revenue Recognition (IND AS 115) Audit Procedure
Recognition of revenue is complex due to several types of customer contracts across divisions. Audit procedure involved review of the Company's IND AS 115 implementation process and key judgments made by management evaluation of customer contracts in light of IND AS 115 on sample basis and comparison of the same with management's evaluation and assessment of design and operating effectiveness of internal controls relating to revenue recognition.
The application of the new standard on recognition of revenue involves significant judgment and estimates made by the management which includes;
• Identification of performance obligations contained in contracts.
Based on the procedures performed it is concluded that management's judgments with respect to recognition and measurement of revenue in light of IND AS 115 is appropriate.
• Determination of the most appropriate method for recognition of revenue relating to the identified performance obligations.
• Assessment of transaction price &
Furthermore the appropriateness of the disclosures made in Note 1.7 to the financial statements was assessed.
• Allocation of the assessed price to the individual performance obligations
Existence and impairment of Trade Receivables Audit Procedure
Trade Receivables are significant to the Company's financial statements. The Collectability of trade receivables is a key element of the company's working capital management which is managed on an ongoing basis by its management. Due to the nature of the Business and the requirements of customers various contract terms are in place which impacts the timing of revenue recognition. We performed audit procedures on existence of trade receivables which included substantive testing of revenue transactions obtaining trade receivable external confirmations and testing the subsequent payments received.
In calculating the Expected Credit Loss as per Ind AS 109 - "Financial Instruments" the company has also considered the estimation of probable future customer default and has taken into account an estimation of possible effect from the pandemic relating to Covid-19. Assessing the impact of trade receivables requires judgment and we evaluated management's assumptions in determining the provision for impairment of trade receivables by analyzing the ageing of receivables assessing significant overdue individual trade receivables and specific local risks combined with the legal documentations where applicable.
Given the magnitude and judgment involved in the impairment assessment of trade receivables we have identified this as a key audit matter.
We tested the timing of revenue and trade receivables recognition based on the terms agreed with the customers. We also reviewed on a sample basis terms of the contract with the customers invoices raised etc. as a part of our audit procedures.
Legal cases have been filed in the case of some debtors and we have analyzed the company's chances of succeeding in the litigation.
Furthermore we assessed the appropriateness of the disclosures made in Note 7 & Note 42 to the financial statements.
Our procedures did not identify any material exceptions.
Inventory Audit Procedure
Management judgment is required to establish the carrying value of inventory particularly in relation to determining the appropriate level of provisions in relation to obsolete and Surplus items. Physical Verification of Inventory was not conducted on 31st March 2020 owing to lock down accordingly necessary Alternative Audit Procedures have been conducted to conclude that inventory is free of material misstatements. With respect to the Net Realizable value of Inventory the Company has provided Management Representations that there is no significant impact on account of Covid as all contracts are based on fixed prices.
In view of being a Trading concern this has been identified as a Key Audit Matter.
The Company's operations owing to Covid Related Events result in the Company holding inventory for extended period of time.
Audit procedures include testing the inventory provisions we assessed the management control and estimation of inventory provisions and their appropriateness. Future salability of inventory was assessed based on past track records.
Based on the audit procedure performed no material discrepancies were identified.
Discussion on investments in subsidiaries Audit Procedure
Investments to the tune of Rs 12602 lakhs in subsidiaries are identified as a Key Audit Matter owing to the size and its impact in assessing the true and fair view of the Financials statements. Audit Procedures were performed to confirm the value of the investments and testing the same for impairment by reviewing the financial statements of the subsidiaries.
Our Audit Procedures did not identify any material exceptions.
Contingent Liability Audit Procedure
On assessment of Provisions for taxation litigations and claims as at 31st March 2020 the Company had a provision in respect of possible or actual taxation disputes litigation and claims to the tune of ' 1957 lakhs. The Audit addressed this Key Audit Matter by;
• Assessing the adequacy of tax Provisions by reviewing correspondence with tax Authorities.
• Discussing significant litigations and claims with the Company's Internal Legal Counsel.
These provisions are estimated using a significant degree of management judgment in interpreting the various relevant rules regulations and practices and in considering precedents in various forums.
• Reviewing previous judgments made by relevant tax Authorities and opinions given by Company's advisors &
• Assessing the reliability of the past estimates of the management.
Our Audit Procedures did not identify any material exceptions
Loans & Advances to Subsidiaries Audit Procedure
Loans & advances to the tune of ' 1493 lakhs were given to a subsidiary - Danish Steel Clusters Pvt Ltd which has incurred losses during the year. Audit check done for the Authorization of Loan Advanced and repayment terms and capability of the subsidiary to repay. The Holding Company has made payments to fund the operations of the Subsidiary for a few months as the subsidiary had liquidity issues.
Our Audit Procedures did not identify any material exceptions
Adoption of IND AS 116 - Leases Audit Procedure
As described in Note 1.11 to the financial statements the Company has adopted Ind AS 116 - Leases in the current year. The application and transition to this accounting standard is complex and is an area of focus in our audit. Our audit procedures on adoption of Ind AS 116 include:
• Assessed and tested new processes and controls in respect of the lease accounting standard (Ind AS 116).
• Assessed the Company's evaluation on the identification of leases based on the contractual agreements and our knowledge of the business;
Ind AS 116 introduces a new lease accounting model wherein lessees are required to recognize a right-of-use (ROU) asset and a lease liability arising from a lease on the balance sheet. The lease liabilities are initially measured by discounting future lease payments during the lease term as per the contract/ arrangement. Adoption of the standard involves significant judgements and estimates including determination of the discount rates and the lease term. Additionally the standard mandates detailed disclosures in respect of transition. Refer Note 2.1 to 2.5 of financial statements.
• Evaluated the reasonableness of the discount rates applied in determining the lease liabilities.
Upon transition as at 1 April 2019:
• Evaluated the method of transition and related adjustments;
• Tested completeness of the lease data by reconciling the Company's operating lease commitments to data used in computing ROU asset and the lease liabilities.
On a statistical sample we performed the following procedures:
• assessed the key terms and conditions of each lease with the underlying lease contracts; and
• evaluated computation of lease liabilities and challenged the key estimates such as discount rates and the lease term.
• Assessed and tested the presentation and disclosures relating to Ind AS 116 including disclosures.

Information Other than the Standalone Financial Statements andAuditors' Report Thereon

The Company's management and Board of Directors are responsible for theother information. The other information comprises the information included in theCompany's Annual Report but does not include the standalone financial statements and ourreport thereon.

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

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the accountingStandards specified under section 133 of the Act read with the rule 3 of the Companies(Indian Accounting Standards) Rules 2015 and Companies (Indian Accounting StandardsAmendment Rules 2016). This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate implementation and maintenance of accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance 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 statement 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 isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the Company has adequate internal financial controls system in placeand the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the goingconcern basis of 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 standalone financial statements including the disclosures andwhether the standalone financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government in terms of sub-section (11) of section 143of the Companies Act 2013 we give in the Annexure 1 a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of accounts as required by law havebeen kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Loss Statement of Changes in Equity and the Cash Flow Statement dealt withby this Report are in agreement with the books of accounts.

(d) In our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 3 of theCompanies (Indian Accounting Standards) Rules 2015 and Companies (Indian AccountingStandards) Amendment Rules 2016.

(e) On the basis of the written representations received from thedirectors as on March 31 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312020 from being appointed as a director in termsof Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure 2'".

(g) With respect to the matter to be included in the Auditors' Reportunder section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

(h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 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 itsfinancial position in its standalone financial statements - Note 39 to the standalonefinancial statements;

ii) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

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

For SRSV & Associates
Chartered Accountants
FR. No. 015041S
V. Rajeswaran
Place: Chennai Partner
Date : 17th June 2020 Membership No. 020881
UDIN NO. : 20020881AAAADS6239

Annexure 1 to the Independent Auditor's Report

Referred to in Paragraph 1 of Report on Other Legal and

Regulatory Requirements of our Report of even date

i. a) The Company has maintained proper records

showing full particulars including quantitative details and situationof fixed assets.

b) As explained to us all the fixed assets have been physicallyverified by the management in a phased periodical manner which in our opinion isreasonable having regard to the size of the Company and nature of its assets. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch physical verification.

c) According to the information and explanation given to us and on thebasis of examination of records of the Company the title deeds of immovable propertiesare held in the name of the Company.

ii. Physical verification of inventory has been conducted at reasonableintervals by the management and no material discrepancies were noticed on suchverification. However as on 31st March 2020 the

physical verification of all branches was not conducted owing to Covid19 lock down the Company has employed necessary cut off procedures in this regard.Accordingly necessary alternative Audit Procedures have been conducted to conclude thatinventory is free of material misstatement.

iii. In our opinion and according to the information and explanationsgiven to us the Company has not granted any loans secured or unsecured to companiesfirms or other parties covered in the register maintained under section 189 of theCompanies Act. (Based on the above para matters referred in clause iii(a) iii(b) andiii(c) of paragraph 3 of Companies (Auditors Report) Order 2016 are not applicable).

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 185 and 186 of theCompanies Act 2013 in respect of loans investments guarantees and security.

v. In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits during the year. Accordinglyreporting under this clause does not arise.

vi. We have broadly reviewed the books of accounts maintained by theCompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under sub-section (1) of Section 148 of the Companies Act in respect of Company'sproducts and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. However we have not made a detailed examination of thecost records with a view to determine whether they are accurate or complete.

vii. a) According to the records of the Company and

information and explanations given to us the Company is regular indepositing undisputed

statutory dues including provident fund employees' state insuranceincome-tax goods & service tax wealth tax duty of customs cess and any otherstatutory dues with the appropriate authorities. There are no undisputed statutory duesoutstanding for more than six months.

b) As at March 31 2020 according to the records of the Company thefollowing are the particulars of the disputed dues on account of sales tax income taxcustoms duty wealth tax service tax and cess which have not been deposited on accountof dispute:

S.No Period Nature of Dues Not Paid (? In Lakhs) Forum where Pending
1 AY 2009-10 Income Tax 200 High Court
2 AY 2011-12 Income Tax 1699 Remanded Back to Assessing Officer by ITAT
3 AY 2015-16 Income Tax 39 CIT(A)
4 FY 2016-17 CST 14 Appellate Deputy Commissioner
5 FY 2017-18 CST 2 Appellate Deputy Commissioner
6 FY 2012-13 & 2013-14 Service Tax 3 Commissioner (Appeals)

viii. Based on our audit procedures and according to the informationand explanations given to us by the management we are of the opinion that the Company hasnot defaulted in repayment of loans or borrowings to a financial institution bankGovernment or debenture holders. Moratorium has been availed on certain loans from thebanks as per Covid 19 relief measures announced by the Government of India.

ix. The Company has not raised money by way of initial public offer orfurther public offer during the Current year and the term loans were applied for thepurposes for which those were raised.

x. In our opinion and according to the information and explanationsgiven to us no fraud on or by the Company has been noticed or reported during thefinancial period.

xi. In our opinion and according to the information and explanationsgiven to us the managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theCompanies Act 2013

xii. In our opinion the Company is not a Nidhi Company. Accordinglyclause xii of Para 3 of Companies (Auditors Report) Order 2016 is not applicable.

xiii. In our opinion and according to the information and explanationgiven to us all transactions with the related parties are in compliance with sections 177and 188 of Companies Act 2013 where applicable and the details have been disclosed in thestandalone

financial statements as required by the applicable accountingstandards.

xiv. The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview.

(Based on the above Para matters referred in clause (xiv) of paragraph3 of Companies (Auditors Report) Order 2016 is not applicable).

xv. ln our opinion and according to the information and explanationsgiven to us the Company has not entered into any non - cash transactions with directorsor persons connected with the Directors. Accordingly clause xv of Para 3 of Companies(Auditors Report) Order 2016 is not applicable.

xvi. In our opinion and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-lA of theReserve Bank of India Act 1934. Accordingly clause xvi of Para 3 of Companies (AuditorsReport) Order 2016 is not applicable.

For SRSV & Associates
Chartered Accountants
F.R. No. 015041S
V. Rajeswaran
Place: Chennai Partner
Date: 17th June 2020 Membership No. 020881
UDIN NO. : 20020881AAAADS6239

Annexure 2 to the Independent Auditor's Report

Report on the Internal Financial Controls under Clause

(i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")

We have audited the internal financial controls over financialreporting of M/s SICAGEN INDIA LIMITED ("the Company") as of March 312020 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We 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 audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit

opinion on the Company's internal financial controls system overfinancial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2020 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For SRSV & Associates
Chartered Accountants
F.R. No. 015041S
V. Rajeswaran
Place: Chennai Partner
Date: 17th June 2020 Membership No. 020881
UDIN NO. : 20020881AAAADS6239

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