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SSPDL Ltd.

BSE: 530821 Sector: Infrastructure
NSE: N.A. ISIN Code: INE838C01011
BSE 00:00 | 03 Apr 18.45 -0.95
(-4.90%)
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NSE 05:30 | 01 Jan SSPDL Ltd
OPEN 18.45
PREVIOUS CLOSE 19.40
VOLUME 310
52-Week high 32.90
52-Week low 15.75
P/E
Mkt Cap.(Rs cr) 24
Buy Price 18.45
Buy Qty 44.00
Sell Price 20.30
Sell Qty 80.00
OPEN 18.45
CLOSE 19.40
VOLUME 310
52-Week high 32.90
52-Week low 15.75
P/E
Mkt Cap.(Rs cr) 24
Buy Price 18.45
Buy Qty 44.00
Sell Price 20.30
Sell Qty 80.00

SSPDL Ltd. (SSPDLLTD) - Auditors Report

Company auditors report

To the Members of SSPDL Limited

Report on the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone ind AS financial statements of SSPDLLimited ('the Company') which comprise the Balance Sheet as at 31st March2019 the Statement of Profit and Loss (including Other Comprehensive income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and notes to the financial statements including a summary of significant accountingpolicies and other explanatory information (herein after referred to as "ind ASfinancial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("ind AS") and other accounting principles generally acceptedin india of the state of affairs of the Company as at 31st March 2019 theloss and total comprehensive income changes in equity and its cash flows for the yearended on that date.

Basis for Opinion

We conducted our audit of the standalone ind AS financial statements in accordance withthe Standards on Auditing (SAs) specified under section 143(10) of the Companies Act2013. Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the standalone ind AS Financial Statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the institute of Chartered Accountants of india (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone ind AS financial statementsunder the provisions of the Companies Act 2013 and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone ind ASfinancial statements.

Emphasis of Matter

We draw your attention to Note 8(a) of the Standalone ind AS financial pertaining toreceivables balances including trade receivables which are due from related parties andothers.

As at 31st March 2019 the trade receivables amounted to Rs. 2916.10 lakhswhich include receivables from related parties amounting to Rs. 2020.08 lakhs and fromothers amounting to Rs. 896.02 lakhs are outstanding for more than one year.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone ind AS financial statements of the currentyear. These matters were addressed in the context of our audit of the standalone ind ASfinancial 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.

S. No Key Audit Matters Auditor's Response
1. Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) Our procedures pertaining to Construction revenue included:
The application of the new revenue accounting standard involves certain key judgements relating to identification of the contract with a customer identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized when a performance obligation is satisfied. Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. • Evaluation and testing of management's review and approval of revenue and cost forecasting.
• Selection of a sample of contracts for testing using:
• Data Analytic routines based on a number of quantitative and qualitative factors related to size and risk of projects.
• For the sample selected we:
• Conducted visits to a selection of project sites to understand project schedule forecast revenue/cost and risks and opportunities.
• Read relevant contract terms and conditions to evaluate the inclusion of individual characteristics and project risks in the Company's estimates.
• Tested forecast costs for labour subcontractors equipment materials and project overheads by comparing to actual incurred spend and committed future contract.
• Tested the variations and claims included within revenue against the criteria for recognition in the accounting standards via assessment of:
Construction Revenue and Profit/loss Recognition - correspondence between the Company and the customer; and
The Company performs various building engineering and services construction contract works (projects) for a wide range of customers. The Company contracts in a variety of ways. Each project has a different risk profile based on its individual contractual and delivery characteristics. We focused on construction revenue and profit recognition as a key audit matter due to the judgment required by us in assessing the range of factors that impact the Company's estimate of costs and revenue and the potential impact on profit. Estimating total costs to complete during project life is complex and requires judgment. Typical cost estimates include labour subcontractors equipment materials and project overheads. Changes to these cost estimates could give rise to variances in the amount of revenue and profit/loss recognized. Judgment is also involved by us in assessing the amount of revenue to be recognized specifically in relation to contractual variations and claims revenue which has not been formally agreed with the customer at the reporting date. Development Revenue and Profit/loss Recognition - the Company's legal and external experts' reports received on contentious matters.
Our procedures pertaining to Development revenue included:
• Evaluation and testing of management's review and approval of development revenue and cost forecasting.
• Selection of a sample of developments based on quantitative and qualitative information such as transaction size potential settlement risk and the complexity of the contractual terms of sale.
• For the sample selected we:
• compared revenue recognized to contractual terms of sale and cash settlements.
• assessed the Company's determination of the transfer of control by a detailed analysis of the contractual terms of sale against the criteria in the accounting standards.
• assessed the customers' credit risk including evaluating public information as to the financial position of the purchaser in the context of the level of instalments received by the Company.
• tested the completion of performance obligations by comparing the work done to the fulfill the obligations with the contractual terms of sale.
The Company develops for sale both built form product (for example residential apartments Villas and commercial/retail buildings) and residential land communities. As development revenue is recognized based on an assessment of when the Control is transferred to the purchaser an assessment of the contractual terms of sale and of the status of completion of performance obligations is required. This was a key audit matter due to the number of judgments required by us in assessing development revenue and profit recognition in particular for commercial/retail building sales and residential apartments/villas. The assessment of profit recognition requires judgment as cost allocation is typically a function of total forecast project profit based on either revenue or area estimation. • assessed the Company's cost allocation methodology by comparing costs allocated to sales recognized in the year relative to the total project against the Company's accounting policy and the requirements of the accounting standards.
Refer Notes 2.2h and 16 to the Standalone Ind AS Financial Statements.
2. Recoverability of Development Property Inventory Our procedures included:
The Company capitalizes development costs into inventory over the life of its projects. Development costs include the purchase of land site infrastructure costs construction costs for built form product and borrowing costs. Inventory is carried at the lower of cost and net realisable value and the recoverability of these costs is a significant judgment as that assessment is based on forecasts of: Selection of a sample of projects for testing using:
• Sales prices • Data Analytic routines based on a number of quantitative and qualitative factors related to size duration and risk of projects.
• Forecast construction and infrastructure costs to complete the development • The Company's project reporting. For the sample selected we:
• compared expected sales prices to published industry forecasts and comparable sales prices achieved in the year.
Where a development is forecast to be loss making and the inventory is no longer considered to be recoverable it is considered to be impaired and an expense is recognized. This is a key audit matter due to many developments being long term which increases the level of forecasting judgment and audit complexity in estimating sales prices and future costs to complete the development. Refer Note 7 to the Standalone Ind AS Financial Statements. • tested forecast construction and infrastructure costs to underlying supplier contracts historical experience of similar costs and our industry expectation of cost contingency levels and cost escalation assumptions.
3. Valuation of Deferred tax assets Principal Audit Procedures
The Company has a significant amount of deferred tax assets mainly resulting from net operating losses. The valuation of deferred tax assets is significant to our audit because the assessment process is complex and is based on estimates of future taxable income. The risk exists that future (fiscal) profits will not be sufficient to recover all or part of these deferred tax assets. Management has supported the recoverability of the deferred tax assets mainly with taxable income projections which contain estimates of and tax strategies for future taxable income. In this area our audit procedures included amongst others:
• Using our own tax specialists to assist us in assessing the appropriateness of the level of deferred taxes recognised in the balance sheet.
• We paid attention to the long-term forecasts and critically assessed the assumptions and judgments underlying these forecasts by considering the historical accuracy of forecasts and the sensitivities of the profit forecasts.
Changes in for example the industrial footprint the business and its markets and changes in regulations may impact these projections. • We assessed the adequacy of the income tax disclosures to the financial statements setting out the basis of the deferred tax balance and the level of estimation involved.
Refer Note 5 to the Standalone Ind AS Financial Statements.

Information Other than the Standalone Ind AS Financial Statements and Auditor's ReportThereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the standalone Ind ASfinancial statements and our auditor's report thereon.

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

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income changes inequity and cash flows of the Company in accordance with the Ind AS and other accountingprinciples generally accepted in India.

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 implementation and maintenance of 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 Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are responsible for overseeing the Company's financialreporting process.

Auditor's Responsibility for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether these standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone Ind AS financial statements.

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

We also:

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

• Obtain an understanding of internal 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.

• 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 ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalone indAS financial statements including the disclosures and whether the standalone ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalone ind AS financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the standalone ind AS financial statementsmay be influenced. We consider quantitative materiality and qualitative factors in (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 ind AS financialstatements.

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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone ind AS financialstatements 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 ("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.

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 statement of cash flows dealt with bythis Report are in agreement with the books of account.

d) in our opinion the aforesaid standalone ind AS 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 on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director interms of Section 164(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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements- Refer Note 25(b) to the standaloneInd AS 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. A. Madhusudana & Co
Chartered Accountants
ICAI Firm Registration No: 007405S
(Divakar Atluri)
Place: Hyderabad Partner
Date: 30.05.2019 Membership No. 022956

"Annexure - A" to the Auditors' Report

The Annexure referred to in independent Auditors' Report to the members of the Companyon the Standalone ind AS financial statements for the year ended 31st March2019 we report that: Re: SSPDL Limited ('the Company')

i. in respect of its fixed assets:

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

(b) As explained to us the management has physically verified a substantial portion ofthe fixed assets during the year and in our opinion frequency of verification isreasonable having regard to the size of the Company and the nature of its assets. Thediscrepancies noticed on physical verification of fixed assets as compared to the books ofaccount were not material and have been properly dealt with in the books of accounts.

(c) in our opinion and according to the information and explanations given to us allthe title deeds of immovable properties are held in the name of the Company.

ii. According to the information and explanations given to us the inventories havebeen physically verified by the management during the year. in our opinion the frequencyof verification is reasonable. The discrepancies noticed on physical verification ofinventory as compared to the books of account were not material and have been properlydealt with in the books of accounts.

iii. According to the information and explanations given to us the Company has grantedunsecured loans to four wholly owned subsidiaries covered in the register maintained undersection 189 of the Act.

(a) The terms and conditions of grant of such loans are in our opinion prima facienot prejudicial to interest of the shareholders.

(b) The said loans are repayable on demand and are interest free.

(c) There are no overdues on the loans mentioned above.

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 with respectto the loans and investments made.

v. According to the information and explanations given to us the Company has notaccepted deposits from the public within the meaning of Section 73 and 76 or any otherrelevant provisions of the Act and the rules framed there under.

vi. We have broadly reviewed the books of account and records maintained by the Companypursuant to the Rules made by the Central Government of india for the maintenance of costrecords prescribed under sub-section (1) of section 148 of the Act in respect ofproduction and processing activities of the Company and are of the opinion that primafacie the prescribed accounts and records have been maintained. We have however not madea detailed examination of the records with a view to determine whether they are accurateor complete.

vii. in respect of Statutory dues:

(a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income-taxsales-tax service tax Goods and Service tax value added tax cess and other materialstatutory dues applicable to it. The provisions relating to excise duty and duty ofcustoms are not applicable to the Company. According to the information and explanationsgiven to us no undisputed amounts payable in respect of such statutory dues wereoutstanding at the year end for a period of more than six months from the date theybecame payable.

(b) According to the information and explanations given to us the dues outstanding ofincome-tax sales-tax service tax value added tax and cess on account of dispute are asfollows:

Name of the Statute Nature of the Dues Amount Rs. In Crores Period to which the amount relates Forum where dispute is pending
Tamil Nadu General sales Act. Disallowances of input tax credit 0.33 2006-07 Supreme court
Tamil Nadu General Sales Act Disallowances of input tax credit 1.25 2007-08 Supreme court
Finance Act 1994 Service tax demand 7.53 2006-11 CESTAT Chennai
Finance Act 1994 Service tax demand 0.19 2010-12 CESTAT Chennai

viii. Based on our audit procedures and as per the information and explanations givenby the management we are of the opinion that the Company has not defaulted in therepayment of dues to banks and financial institutions. The Company did not have anydebentures outstanding as at the year end.

ix. Based on the information and explanations given to us by the management theCompany has not raised any moneys by way of initial public offer or further public offerof equity shares convertible securities and debt securities. During the year Company hastaken a term loan from PNB Housing Finance Ltd. and it is utilised for the purpose forwhich it is raised.

x. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given bythe management we report that no material fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.

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 to the Act.

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 where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

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.

For. A. Madhusudana & Co
Chartered Accountants
ICAI Firm Registration No: 007405S
(Divakar Atluri)
Place: Hyderabad Partner
Date: 30.05.2019 Membership No. 022956

"Annexure - B" to the Independent Auditors' Report

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

We have audited the internal financial controls over financial reporting of SSPDLLimited ("the Company") as of 31st March 2019 in conjunction withour audit of the Standalone Ind AS financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('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 Companies Act 2013.

Auditors' 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 Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 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 judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error.

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

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of standalone Ind AS 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 standaloneInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the standaloneInd AS 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 31st March 2019based on 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. A. Madhusudana & Co
Chartered Accountants
ICAI Firm Registration No: 007405S
(Divakar Atluri)
Place: Hyderabad Partner
Date: 30.05.2019 Membership No. 022956