bkm industries ltd Auditors report

TO THE MEMBERS OF BKM INDUSTRIES LIMITED

Report on the audit of standalone financial statements

OPINION

We have audited the accompanying Standalone Financial Statements of BKM Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2020, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2020, the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.

EMPHASIS OF MATTERS

We draw attention to the following notes of the Standalone Financial Statements. Our opinion is not modified in respect of these matters,

1. Note No 48 to the Standalone Financial Statements which indicate that with effective April 1, 2019, the Company adopted Ind AS 116 "Leases" using the Modified Retrospective Approach which is applied to leases that were within the scope of this standard as of April 1, 2019 and has taken the cumulative adjustment to retained earnings in the Standalone Financial Statements as on April 1, 2019. As a result an amount of INR 127.73 lakhs as fair value of leased asset recognized as lease-hold building in the Property, Plant and Equipments (Refer Note No 5 to the Standalone Financial Statements) and also recognized an equivalent amount as fair value of leased liability, included in the Other non-current liabilities (Refer Note No 21 to the Standalone Financial Statements) as at March 31, 2020.

2. Note 7 "Trade Receivables-Impairment loss/ (gain) on financial assets" to the Standalone Financial Statements which indicate that as at the reporting date the management has reviewed the recoverability of trade receivables. Based on which the entity has provided for expected credit loss of INR 1558 lakhs to the extent of non-recoverability of trade receivables in accordance with Ind AS -109 "Financial Instruments: recognition & measurement" during the year ended 31st March, 2020. This is included in Note No 30 "Other Expenses-Impairment (loss)/gain on financial assets" in the Standalone Financial Statements for the year ended March 31, 2020.

3. Note 17 "Borrowings" to the Standalone Financial Statements which indicate that Due to irregularity in payment of Borrowings, as at 31st March, 2020 the Companys loan accounts in the Banks and Other Financial Institutions have got NPA due to overdue of Interest and Principal amounting to INR 10503 lakhs. Further these Bank and Other Financial Institutions have already initiated notice under section 13(2) of the SRFAESI Act, 2002, against which the Company has responded accordingly.

4. Note 58 to the Standalone Financial Statements which indicates that the Company out of 8 manufacturing facilities (‘facilities), the company has already discontinued its operations at 3 facilities till 31st March 2020 and communicated to the stock exchange on its intent to suspend the operation at 3 facilities from now onwards. However, the management is exploring options to revive the operations and cash flows in near future so as to maintain the going concern status of the entity. These events or conditions indicate that a material uncertainty exists that may cast significant doubt on the entitys ability to continue as a going concern.

5. Note 59 to the Standalone Financial Statements which indicates that the Company has sold lease hold land and discontinued its manufacturing operations of one of its plant located at Bhopal district in the state of Madhya Pradesh. Accordingly, net profit/ (Loss) from such manufacturing operation of an amounting to INR (23) lakhs disclosed separately in the Statement of Profit and Loss of the Company for the year ended March 31,

2020 as a separate item in accordance with Ind AS 105 "Non-current Assets Held for Sale and Discontinued Operations". Furthermore the Property, Plant and Equipment (Refer Note No 5 to the Standalone Financial Statements) of an amounting to INR 67 lakhs with respect to this plant classified in accordance with Ind AS 105 "Non-current Assets Held for Sale and Discontinued Operations" and disclosed under "Non-current assets held for disposal" in the Balance Sheet as at 31st March 2020.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sl. No. Key Audit Matter	Principal Audit Procedures
1. As at the reporting date the carrying amount of the net assets of the entity is more than its market capitalization on standalone basis. This provides an indication for occurrence of Impairment Loss in accordance with Ind-AS 36 "Impairment loss". However, based on the formal estimates by the management the recoverable value will exceed the carrying amount of the net assets of the company. Hence, no impairment loss recognized in the Standalone Financial Statements for the period ended March 31, 2020.	We have discussed with the Management and Audit Committee backed by detailed workings on future projections and sustainability plans.
2. Contingent Liabilities pending starting from financial year 2011- 12, Non-payment of tax liability of INR 135 lakhs & Non-filing of Income Tax Returns for the financial year 2017-18 & recoverability of deposits made against Appeals with Government Authorities.	We have involved our internal experts to review the nature of the amounts recoverable and payables, the sustainability and the likelihood of recoverability upon final resolution.
3 Allowance for Credit Losses: The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the Company deals with and the countries where it operates. In calculating expected credit loss, the Company has also considered credit reports and other related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID-19. We identified allowance for credit losses as a key audit matter because the Company exercises significant judgment in calculating the expected credit losses.	Our audit procedures related to the allowance for credit losses for trade receivables and unbilled revenue included the following, among others: We tested the effectiveness of controls over the (1) development of the methodology for the allowance for credit losses, including consideration of the current and estimated future economic conditions (2) completeness and accuracy of information used in the estimation of probability of default and (3) computation of the allowance for credit losses. For a sample of customers: We tested the input data such as credit reports and other credit related information used in estimating the probability of default by comparing them to external and internal sources of information. We tested the mathematical accuracy and computation of the allowances by using the same input data used by the Company.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITORS REPORT THEREON

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the Standalone Financial Statements and our auditors report thereon.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

MANAGEMENTS RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also 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 Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone 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.

The Board of Directors are responsible for overseeing the Companys financial reporting process.

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

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

i. Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

ii. Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

iii. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

iv. Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

v. Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may 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 financial statements.

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements for the financial year ended March 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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 Companies Act, 2013, we give in the ‘Annexure A; a statement on the matters specified in the paragraph 3 and 4 of the said order, to the extent applicable.

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

(a) we have sought and obtained all the information and explanations which to the best of 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 the Company so far as it appears from our examination of those books;

(c) the Standalone Balance Sheet, Statement of Profit and Loss, the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with relevant rule issued thereunder, as amended;

(e) on the basis of the written representations received from the Directors as on 31st March, 2019, taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2020 from being appointed as a Director in terms of section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these Standalone Financial Statements and the operating effectiveness of such controls, refer to our separate Report in ‘Annexure B to this report; and

(g) in our opinion, the managerial remuneration for the year ended March 31, 2020 has been paid/provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(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 pending litigations in its financial statements;

ii. The Company did not have any long- term contracts, including derivative contracts. Accordingly, no provisions for material foreseeable losses have been made; and

iii. There were no amounts which are required to be transferred to the investor education & protection fund by the Company.

ANNEXURE_A

TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal & Regulatory Requirements section of our report of even date)

The Annexure referred to in Independent Auditors Report to the members of BKM Industries Limited ("the Company") on the Standalone Financial Statements for the year ended 31st March 2020, we report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets, by which all fixed assets are verified in a phased manner over a period of two years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and the nature of its assets. Pursuant to such program, none of the fixed asset has been physically verified by the management during the period.

(c) According to information and explanations given by the management, the title deeds/lease deeds of immovable properties included in property, plant and equipment are held in the name of the Company except the title deeds/lease deeds pending for mutation of immovable properties are given bellow:

Particulars	Locations	Title Owner	Amount (Rs. in INR)
Free Hold Land	Hyderabad	Manaksia Crowns Pvt. Ltd.	88,633.00
Free Hold Land	Hyderabad	Manaksia Crowns Pvt. Ltd.	1,18,089.00
Factory Land	Belur	Hindustan Seals Limited	2,01,056.00
Free Hold Land	Silvasa	Manaksia Crowns Pvt. Ltd.	5,34,247.00
Land	Liluah	Manaksia Containers Ltd.	8,55,415.00

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable.

(b) The discrepancies noticed on the aforesaid verification between the physical stocks and book records were properly dealt in the books of accounts.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from public and accordingly clause (v) of paragraph 3 of the Order is not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under sub-section (1) of section 148 of the Act and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(vii) (a) 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, duty of customs, duty of excise, CGST, SGST, IGST, UTGST, Value Added Tax, Cess and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities except the following,

Nature of Statutory Dues	Outstanding Since	Amount (INR in Lakhs)
Goods and Services Tax (GST)	May, 2018	46.99
Tax Deducted at Source (TDS)	July, 2018	152.95
Income Tax Liability for the financial year 2017-18	Nov, 2018	135.00
Total		334.94

(b) According to the information and explanations given to us, the following dues of Excise Duty, Service Tax, Entry Tax and Other Dues have not been deposited by the Company on account of disputes:

Name of the Statute	Nature of the Dues	Amount involved (Rs. in INR)	Period to which the amount relates	Forum where Disputes is pending
Central Excise & CGST Act	Excise Duty & Penalty	95,91,956.00	2017-18	Commissionerate Audit-II, Kolkata
Central Excise & CGST Act	Excise Duty & Penalty	64,779.00	2017-18	Asst. Commissionerate of CGST & C. Ex, Bankura Division
Central Excise Act, 1944	Excise Duty & Penalty	3,502,788.00	1991-99	Superintendent of Central Excise, Range-9
Central Excise Act, 1944	Excise Duty & Penalty	1,604,645.00	2012-13	Addl. Commissioner, Hyderabad
Central Excise Act, 1944	Excise Duty & Penalty	1,729,833.00	2014-15	Jt. Commissioner, Hyderabad
Central Excise Act, 1944	Excise Duty & Penalty	29,504,533.00	2010-11	Commissioner of C.Ex., Hyderabad – I
Central Excise Act, 1944	Excise Duty & Penalty	2,558,384.00	1991-92	Commissioner of Central Excise, Kolkata
Central Excise Act, 1944	Excise Duty & Penalty	2,856,822.00	1990-94	Collectorate of C.Ex, Cal – II
Central Excise Act, 1944	Excise Duty & Penalty	4,966,246.00	1991-94	Superintendent, C.EX of HND
Central Excise Act, 1944	Excise Duty & Penalty	1,072,447.00	1992-15	A.C, C.Ex., CGR-I
Central Excise Act, 1944	Excise Duty & Penalty	568,850.00	2007-11	A.C., C.E.DGP
Central Excise Act, 1944	Excise Duty & Penalty	1,424,775.00	2007-08	Jt.Commr, Bolpur
Central Excise Act, 1944	Excise Duty & Penalty	835,713.00	1998-99	Additional Commissioner, Cal-IV
Central Excise Act, 1944	Excise Duty & Penalty	1,728,620.00	1993-04	Additional Commissioner, C.Ex of Cal-II
Central Excise Act, 1944	Excise Duty & Penalty	117,147.00	2013-14	Asstt. Commissioner, C.Ex, HND-II
Central Excise Act, 1944	Excise Duty & Penalty	266,145.00	2011-12	D.C., C.E, DGP
Central Excise Act, 1944	Excise Duty & Penalty	954,876.00	1995-97	Dy. Commissioner, C.Ex of Cal-II
Central Excise Act, 1944	Excise Duty & Penalty	31,262.00	2000-12	Joint Commissioner, C.Ex, Cal-IV
Central Excise Act, 1944	Excise Duty & Penalty	2,35,55,830.00	2015-16	Central Excise Commissionerate, kol-IV
Central Excise Act, 1944	Excise Duty & Penalty	46,425.00	2016-17	Asst. Commissioner of C.E-Bankura Division
Central Excise & CGST Act	Service Tax	2,69,000.00	2017-18	Asst. Commissioner of CGST & Central Excise, Durgapur Audit
Central Excise Act,1944	Service Tax	31,69,656.00	2009-10	Asst, Commissioner, CE & ST Haldia- Div.I
MP Industrial Relation Act, 1960	Others	2,13,259.00	2014-15	Labour Court, Bhopal
The WB Entry Tax Act	Entry Tax	70,66,085.00	2011-17	High Court, Kolkata

(viii) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to any financial institutions, bankers and government or debenture holders during the year,

			Amount Overdue as at
Name of the Bank	Nature of Account	Date of Overdue Started	31st March, 2020
			(INR in Lakhs)
State Bank of India	Cash Credit	20.09.2018	3,277.00
ICICI Bank Limited	Term Loan	22.09.2018	1,056.00
ICICI Bank Limited	Cash Credit	31.10.2018	196.00
IDBI Bank Limited	Cash Credit	23.10.2018	1,103.00
Allahabad Bank	Cash Credit	30.09.2018	2,307.00
Bank of Baroda	Cash Credit	01.07.2019	618.00
Indiabulls Housing Finance	Term Loan	01.04.2019	1,946.00
Total			10,503.00

(ix) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised. The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) during the year.

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

(xi) According to the information and explanations given to us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause (xii) of paragraph 3 of the Order is not applicable.

(xiii) 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 section 177 & 188 of the Act where applicable and the details of such transactions have been disclosed in the Standalone Financial Statements of the Company as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Therefore, the provision of clause 3(xiv) of paragraph 3 of the Order is not applicable to the Company.

(xv) 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 them. Accordingly, clause (xv) of paragraph 3 of the Order is not applicable.

(xvi) According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clause (xvi) of paragraph 3 of the Order is not applicable.

ANNEXURE_B

TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 2(f) under ‘Report on Other Legal & Regulatory Requirements section of our report of even date)

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE 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 BKM Industries Limited ("the Company") as of March 31, 2020 in conjunction with our audit of the Standalone 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 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 was 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 judgement, including the assessment of the risks of material misstatement of the Standalone 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 with reference to these Standalone Financial Statements.

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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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 2020, 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.