To the Members of Birla Cotsyn (India) Limited
Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of BIRLA
COTSYN (INDIA) LIMITED ("the Company") which comprise the Balance Sheet as
at 31st March, 2018, the Statement of Profit and Loss (including Other Comprehensive
Income), Statement of Changes in Equity and the Statement of Cash Flows for the year then
ended, and a summary of significant accounting policies and other explanatory information
(hereinafter referred to as "the standalone Ind AS financial statements").
Managements Responsibility for the Standalone Ind AS Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation
and presentation of these standalone Ind AS financial statements that give a true and fair
view of the state of affairs, profit/loss (including other comprehensive income), changes
in equity and cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed
under Section 133 of the Act.
This responsibility includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and presentation of the standalone Ind
AS financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the
companys ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the company or to cease operations, or has no realistic
alternative but to do so.
Auditors Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial
statements based on our audit. We have taken into account the provisions of the Act, the
accounting and auditing standards and matters which are required to be included in the
audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone Ind AS financial statements in accordance with
the Standards on Auditing specified under Section 143(10) of the Act. Those Standards
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the standalone Ind AS financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the Standalone Ind AS financial statements. The procedures selected
depend on the auditors judgment, including the assessment of the risks of material
misstatement of the Standalone Ind AS financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal financial control
relevant to the Companys preparation of the Standalone Ind AS financial statements that
give a true and fair view in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made by the Companys
Directors, as well as evaluating the overall presentation of the Standalone Ind AS
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our qualified audit opinion on the standalone Ind AS financial
statements.
Basis for Qualified Opinion
1. With reference to note no.15C regarding Inter Corporate Deposits of Rs.
156,496,666/- taken from various parties as at 31st March, 2018 in the absence of third
party confirmation, reconciliation, if any and other supportive audit evidence, we are
unable to comment upon such balances.
Further, few such parties have already filed winding up petition under section 271 and
272 of the Companies Act,
2013 ("the Act") against the Company for non-payment of dues. These matters
are sub-judice and the impact, if any, of the outcome is unascertainable of this stage.
2. No provision has been made during the year for interest payable of Rs.
18,352,675/- on Inter-Corporate and other Deposits taken by the Company. Consequently the
loss for the period is lower by Rs. 18,352,675/- and other current liabilities is
understated by Rs. 18,352,675/- as at 31st March, 2018. Including un-provided
interest of earlier periods, Inter-Corporate Loans is understated by Rs.
65,288,274/-.
3. With reference to the dues to related parties note no. 15(B)(b)
regarding dues to related parties of Rs. 16,348,686/-and note no.16(A)(a) trade
payables of Rs. 141,801,102/- as at 31st March, 2018, in the absence of third party
confirmation, reconciliation, if any and other supportive audit evidence, we are unable to
comment upon such balances.
4. No provision has been made in the current year for interest payable of
Rs. 2,712,511/- on loans taken from related parties by the Company and no provision
has been made for interest receivable of Rs. 33,443,960/- on loans given to related
parties by the Company. Consequently the loss for the year is higher by Rs.
30,731,449/-, Other Current Liabilities (Note No 17) is understated by Rs. 2,712,511/-
and Other Non-Current Assets (Note 5) is understated by Rs. 33,443,960/-. Including
unprovided interest of earlier periods, Other Current Liabilities (Note No 17) is
understated by Rs. 12,657,293/- and Other Non-Current Assets (Note 5) is
understated by Rs. 104,935,836/-.
5. With reference to Fixed Deposits accepted by the Company, the Company
has defaulted in the repayment of depositors. The dues of such depositors as on 31st
March, 2018 is Rs. 6,200,650. The Honble Company Law Board, Mumbai Bench passed an
order dated 27th January, 2016 for rescheduling the repayment of the deposits for a
specified period under section 58A(9) read with section 74(2) of the Companies Act, 2013.
However the company has not repaid the deposits in compliance with the said order passed
by the Honble Company Law Board.
6. With reference to note no. 4(c)(ii) regarding loan of Rs.
361,908,831/- given to four related parties, which have incurred losses and also have
negative net worth (excluding Revaluation Reserves) as at 31st March 2017. In the absence
of latest audited accounts and detailed information of cash flows as at 31 March, 2018 or
other supportive audit evidence, we are unable to comment upon its impairment, if any.
7. With reference to note no. 2 regarding Plant &Machinery of Rs.
381,162,161/-(net block) situated at factory units of the company which are not operating
during the year, in the absence of future cash flow information about the value in use, we
are unable to comment upon its impairment provision, if any as per IND AS- 36
"Impairment of Assets".
8. With reference to loan given to Foreign subsidiary, the Company has
not restated the same at exchange rate prevailing on the last day of the reported period
as required by IND-AS 21 " The effect of changes in Foreign Exchange Rates". As
a result, the loan to foreign subsidiary for the period is understated by Rs.
36,069,096/- and correspondingly Foreign Currency Translation Reserve for the period is
also understated by Rs. 36,069,096/-.
9. With reference to capital advance of Rs. 2,315,279/- as at 31st
March, 2018 given to various parties, in the absence of third party confirmation,
reconciliation, if any and other supportive audit evidence, we are unable to comment upon
its recoverability in cash or kind, if any.
10. With reference to trade receivables of Rs. 1,691,278/- as at 31st March,
2018 in the absence of third party confirmation, reconciliation, if any and other
supportive audit evidence, we are unable to comment upon its balance recoverability, if
any.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of the matter described in the Basis for Qualified
Opinion paragraph above and read with points mentioned in Emphasis of Matter paragraph,
the aforesaid financial statements give the information required by the Act in the manner
so required and give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as at 31st March,
2018, and its loss and its cash flows for the year ended on that date.
Emphasis of Matter
1. We draw attention to the Note no. 12(e) in the financial Statements. The
company has incurred net loss of Rs. 889,433,660/- during the year ended 31st
March, 2018 and as of that date, the Companys accumulated losses aggregate to Rs.
5,999,922,597/- resulting in complete erosion of its net worth. Further, as of that date,
companys current liabilities exceeded its current assets by Rs. 5,994,811,639/-.
These factors along with other matters as set forth in said note raise substantial doubt
about the companys ability to continue as a going concern in the foreseeable future.
However, the companys financial statement has been prepared on going concern basis as
disclosed by management in said note. Our opinion is not qualified in respect of this
matter.
2. We draw attention to Note no. 17A and 17B regarding notice issued by
consortium of banks under section 13(2) of the Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 for non-payment
of principal and interest thereon after the due date by the company and therefore all
loans accounts became Non Performing Assets effective from respective dates mentioned in
such notice. We are informed that the company has challenged the notice and the Banks
action of taking symbolic possession of the properties of the company under section 13(4)
of the SARFAESI Act by filing a Securitisation Application in the Debts Recovery Tribunal,
Mumbai, which is pending. The consortium of banks has also filed an Original
Application in the Debts Recovery Tribunal, Mumbai, which is pending. The matters are
sub-judice. These factors along-with other matters as set forth in said notice raise
substantial doubt about the companys ability to continue as a going concern in the
foreseeable future. However, the companys financial statements have been prepared on
going concern basis as disclosed by management in said note. Our opinion is not qualified
in respect of this matter
3. Term Loans and Cash Credit facility of Axis Bank have been assigned to
Edelweiss Asset Reconstruction Company Ltd. by the bank vide agreement dated 20.03.2017.
Subsequent to the date of the Balance Sheet, Edelweiss Asset
Reconstruction Company Ltd. has filed application before the National Company Law
Tribunal, Mumbai Bench dated 04.04.2018 u/s 7 of The Insolvency and Bankruptcy Code 2016
("the Code") for the purpose of initiating corporate insolvency resolution
process against the Company vide application No. C.P. (IB) No. 579 of 2018. We are
informed that the Company is exploring various legal options available to it under the
Code. These factors along-with other matters as set forth in said notice raise substantial
doubt about the companys ability to continue as a going concern in the foreseeable
future. However, the companys financialstatements have been prepared on going concern
basis as disclosed by management in said note. Our opinion is not qualified in respect of
this matter.
Other Matters
The company had given loan to four related parties in earlier years and the amount
outstanding as at 31st March, 2018 Rs. 404,098,111/- (including interest
till 31st March, 2018) which is not in compliance with the requirements of section 185 of
the Companies Act, 2013.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016("the Order")
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Act, we give in "Annexure A", a statement on the matters Specified in
paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of our audit except for the
matter described in the Basis for Qualified Opinion Paragraph.
(b) In our opinion, proper books of accounts as required by law have been kept by the
Company so far as it appears from our examination of those books.
(c) The Balance Sheet, Statement of Profit and Loss (including other Comprehensive
Income), the statement of changes in Equity and statement of Cash Flow dealt with by this
Report are in agreement with the books of accounts.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with
the Indian Accounting Standards prescribed under section 133 of the Act
(e) Except for the effects of the matters described in the Basis for Qualified Opinion
paragraph, and read with points mentioned in Emphasis of Matter paragraph, in our opinion,
the aforesaid standalone Ind AS financial statements comply with the Indian Accounting
Standards (Ind AS) specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014.
(f) On the basis of the written representations received from the directors as on 31st
March, 2018 taken on the record by the Board of Directors, none of the director is
disqualified as on 31st March, 2018 from being appointed as a director in terms of Section
164(2) of the Act.
(g) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate audit report in "Annexure B". Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of the Companys internal financial
controls over financial reporting.
(h) With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion
and 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 financial
position in its standalone Ind AS financial statements- Refer Note 26 to the standalone
Ind AS financial statements;
II. The Company does not have any long term contracts including derivative contracts;
as such the question of commenting on any material foreseeable losses does not arise
III. During the year, the Company has transferred Rs..1,303,901/- of unclaimed dividend
to Investor Education and Protection Fund. Other than this, there was no amount of
unclaimed dividend required to be transferred to Investor Education and Protection Fund
during the current year.
IV. The disclosure regarding details of specified bank notes held and transacted during
8 November 2016 to 30 December 2016 has not been made since the requirement does not
pertain to financial year ended 31 March 2018.
For Samria & Co.
Chartered Accountants
Firm Registration No: 109043W
(AdharSamria) Partner
M.No. 049174
Dated: 23rd May, 2018
ANNEXURE TO INDEPENDENT AUDITORS REPORT
With reference to the Annexure A referred to in the Independent Auditors Report to the
members of the Company on the Standalone Ind AS Financial Statements for the year ended
31st March 2018, we report the following :
1 Fixed Assets:
1.1 The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
1.2 The fixed assets are physically verified during the year by the Management in
accordance with a regular program of verification which, in our opinion is reasonable
having regard to the size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification by the management between the book and
physical verification records.
1.3 According to the information and explanations given to us and on the basis of our
examination of the record of the company, the title deeds of immovable properties are held
in the name of the company.
2 Inventories:
2.1 According to the information and explanations given to us and on the basis of our
examination of the records of the company, inventory has been physically verified by the
Management during the year. In our opinion, the frequency of verification is reasonable
and no major discrepancies were noticed on physical verification.
3 Loans Granted:
3.1 According to information and explanations given to us the Company has not granted
any loans during the year, secured or unsecured to companies, firms, Limited Liability
Partnerships or other parties covered in the register maintained under section 189 of the
Companies Act, 2013.
3.2 According to the information and explanations given to us the Company does not have
any loan or interest receivable from parties covered in the register maintained under
section 189 of the Companies Act, 2013. In the earlier years the Company had granted loans
to four body corporate who were covered in the register maintained under section 189 in
those years and which are still outstanding as at 31st March, 2018. In case of such loans
since there are no terms for repayment of interest we cannot comment upon the regularity
of the same. The terms of arrangements do not stipulate any repayment schedule of
principal and interest amount and the loans are repayable on demand. Accordingly,
paragraph 3(iii)(b) of the Order is not applicable to the Company in respect of repayment
of the principal amount.
3.3 The terms of arrangements do not stipulate any repayment schedule of principal and
interest amount and the loans are repayable on demand. Accordingly, paragraph 3(iii)(c) of
the Order is not applicable to the Company in respect amount of principal and interest
overdue.
4 Loans and Investments:
4.1 According to the information and explanations given to us and based on the audit
procedures conducted by us, during the year, the Company has not granted any loans,
investments, guarantees or security covered under section 185 or section 186 of the
Companies Act, 2013.
4.2 The Company has granted loans to bodies corporate in the earlier year which as on
the date of this balance sheet are in excess of the limit specified under section 186. No
special resolution has been passed in the General Meeting for the same.
4.3 The Company has granted interest free loan to its 100% subsidiary in the earlier
years which is receivable at the end of the current financial year. No special resolution
has been passed in the General Meeting for the same.
4.4 In respect of loans of Rs. 361,908,831/- given to four companies and outstanding as
on 31st March, 2018, the terms of the loan provide for payment of interest at a rate
higher than prescribed under section 186. However, none of the companies to whom the loans
have been given have paid interest to the Company and the Company has not made any
provision for interest receivable from such loans in its books of accounts.
5 Deposit from Public:
The Company has defaulted in the repayment of depositors. The dues of such depositors
as on 31st March, 2018 is Rs. 6,200,250. The Honble Company Law Board, Mumbai Bench
passed an order dated 27th January, 2016 for rescheduling the repayment of the deposits
for a specified period under section 58A(9) read with section 74(2) of the Companies Act,
2013. However the company has not repaid the deposits in compliance with the said order
passed by the Honble Company Law Board.
6 Maintenance of Cost Records:
6.1 We have broadly reviewed the cost records maintained by the Company pursuant to the
Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central
Government under sub-section (1) of section 148 of the Companies Act, 2013, and are of the
opinion that, prima facie, the prescribed cost records have been made and maintained. We
have, however, not made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
7 Remittance of Statutory Dues:
7.1 According to the information and explanations given to us and on the basis of our
examination of the records of the Company, amounts deducted / accrued in the books of
account in respect of undisputed statutory dues including provident fund, employees state
insurance, income-tax, sales-tax, service tax, customs duty, excise duty, VAT, Goods and
Services Tax (GST), Cess and other statutory dues have been regularly deposited with the
appropriate authorities except in case of TDS as given in para 7.2 below.
7.2 According to the information and explanation given to us, no undisputed amounts
payable in respect of provident fund, employees state insurance, income tax, wealth tax,
service tax, sales tax, custom duty, excise duty, Goods and Services Tax (GST), Cess and
other undisputed statutory dues were outstanding at the end, for the period of more than
six month from the date they became payable, except as stated below
| Name of the Statute |
Nature of Dues |
Amount (Rs.) |
Period to which the Amount relates |
Due Date |
Date of Payment |
Remark (if Any) |
| Income Tax |
Dividend Distribution tax |
20,165,737 |
2009-10 |
04-10-2012 |
Not Paid |
- |
| Income Tax |
TDS on Interest |
2,068,460 |
2012-13 |
01-04-2012 to 31-12-2012 |
Not Paid |
- |
| Income Tax |
TDS on FD Interest |
276,279 |
2014-15 |
01-04-2014 to 30-09-2014 |
Not Paid |
- |
7.3 According to the information and explanations given to us and as per the records of
the Company examined by us, there are no dues outstanding of sales tax, custom duty,
service tax, excise duty Goods and Services Tax (GST) and cess, which have not been
deposited on account of any dispute. However, according to information and explanations
given to us, the following dues of income tax have not been deposited by the Company on
account of dispute
| Name of the Statue |
Nature of Dues |
Amount in (Rs..) |
Period to which the amount relates |
Forum where dispute is pending |
| Income Tax Act,1961 |
Income tax and interest |
273,281 |
Assessment Year 2009-2010 |
CIT (Appeals) |
| Income Tax Act,1961 |
Income tax and interest |
143,466,369 |
Assessment Year 2011-2012 |
CIT (Appeals) |
| Income Tax Act,1961 |
Income tax and interest |
34,661,725 |
Assessment Year 2012-2013 |
CIT (Appeals) |
| Income Tax Act,1961 |
Income tax and interest |
14,204,631 |
Assessment Year 2013-2014 |
CIT (Appeals) |
8 Dues to Bank and Financial Institutions
8.1 In our opinion, and according to the information and explanation given to us, the
Company has defaulted in repayment of dues to financial institutions and banks for
principal amount of Rs. 2,332,304,243/- and interest amounting of Rs. 3,269,145,627/-
since May 2012. The Company has received notice issued by consortium of banks under
section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement
of Security Interest Act 2002 for non-payment of principal and interest thereon after the
due date by the Company and therefore all loans accounts became Non Performing Assets
effective from respective dates mentioned in such notice. We are informed that the company
has challenged the notice and the Banks action of taking symbolic possession of the
properties of the company under section 13(4) of the SARFAESI Act by filing a
Securitisation Application in the Debts Recovery Tribunal, Mumbai, which is pending.The
consortium of banks has also filed an Original Application in the Debts Recovery Tribunal,
Mumbai, which is pending.The matters are sub-judice. Lender wise detail is provided in
respect of default made to bank and financial institutions & Government.
| Particulars |
Amount of Default as at the Balance sheet date (incl. Interest) |
Period of Default |
| Union Bank of India (Term Loan) |
299,665,678 |
September, 2012 |
| Union Bank of India (Cash Credit) |
262,469,601 |
December,2012 |
| Axis Bank (Term Loan) |
186,796,708 |
September, 2012 |
| Axis Bank (Cash Credit) |
126,195,629 |
December,2012 |
| Bank of India (Term Loan) |
386,897,875 |
September, 2012 |
| Bank of India (Cash Credit) |
1,189,536,217 |
September, 2012 |
| Indian Overseas Bank (Term Loan) |
492,476,821 |
June, 2012 |
| Indian Overseas Bank (Cash Credit) |
368,067,170 |
October, 2012 |
| Oriental Bank of Commerce (Term Loan) |
194,248,591 |
September, 2012 |
| Canara Bank (Term Loan) |
246,820,904 |
June, 2012 |
| Canara Bank (Cash Credit) |
279,317,903 |
September, 2012 |
| State Bank of India (Term Loan) |
216,893,722 |
February, 2013 |
| Catholic Syrian Bank (Term Loan) |
13,58,61,457 |
September, 2012 |
| Catholic Syrian Bank (Cash Credit) |
385,509,870 |
December, 2012 |
| Jankalyan Sahakari Bank (Term Loan) |
49,454,703 |
May, 2012 |
| Bank of India-Housing Complex (Term Loan) |
130,315,462 |
September, 2012 |
| Karur Vysya Bank (Cash Credit) |
650,921,558 |
June, 2012 |
9 Application of term loans/public issue/ follow on offer:
9.1 The Company did not raise any money by way of initial public offer or further
public offer (including debt instruments) and term loans during the year. Accordingly,
paragraph 3(ix) of the Order is not applicable.
10 Frauds
10.1 According to the information and explanations give to us and based on our
examination of the records of the Company, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the period, nor have been informed
of any such case by the management.
11 Managerial Remuneration:
11.1 According to the information and explanations give to us and based on our
examination of the records of the Company, the Company has paid/provided for managerial
remuneration in accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Act.
12 Nidhi Company:
12.1 In our opinion and according to the information and explanations given to us, the
Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not
applicable.
13 Related Party Transaction:
13.1 According to the information and explanations given to us and based on our
examination of the records of the Company, transactions with the related parties are in
compliance with sections 177 and 188 of the Act where applicable and details of such
transactions have been disclosed in the financial statements as required by the applicable
accounting standards.
14 Preferential Allotment/private placement:
14.1 During the year, the Company has made preferential allotment of 17,935,296
/-Equity Shares at par value of Re.1/- per share to Melstar Information Technologies
Limited on 24th November, 2017 aggregating to Rs. 17,935,296/- by conversion
of their loan outstanding including interest payable thereon.
15 Non Cash Transaction:
15.1 According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not entered into non-cash
transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of
the Order is not applicable.
16 Registration under RBI:
16.1 The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act 1934.
For Samria & Co.
Chartered Accountants
Firm Registration No: 109043W
(AdharSamria)
Partner M.No. 049174
Place: Mumbai
Dated: 23rd May, 2018
Annexure B to the Auditors Report
Report on the Internal Financial Controls over Financial Reporting 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 financial reporting of BIRLA
COTSYN (INDIA) LIMITED ("the Company") as of 31 March 2018 in conjunction
with our audit of the standalone Ind AS financial statements of the Company for the year
ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
issued by the Institute of Chartered Accountants of India (‘ICAI). These
responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to the Companys policies, the safeguarding
of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
(the ‘Guidance Note) and the Standards on Auditing, issued by ICAI and deemed to be
prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to
an audit of internal financial controls, both applicable to an audit of Internal Financial
Controls and, both issued by the Institute of Chartered Accountants of India. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether adequate internal
financial controls over financial reporting were established and maintained and if such
controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the standalone Ind AS financial statements, whether due to fraud
or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with authorizations of the
Management and directors of the Company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the
Companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31st March 2018, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
For Samria & Co.
Chartered Accountants
Firm Registration No: 109043W
(AdharSamria)
Partner M.No. 049174
Dated: 23rd May, 2018
+91-9892691696
