Camson Bio Technologies Ltd Auditors Report.

Qualified Opinion

We have audited the accompanying Standalone Ind AS financial statements of Camson Bio Technologies Limited ("the company"), which comprise the BalanceSheet as at 31st March 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as " Standalone Ind AS financial statements").

In our opinion and to the best of our information and according to the explanations given to us, Except for the effects of matter prescribed in "Basis for Qualified Opinion Paragraph" below, the aforesaid Standalone Ind AS financial statements give the information required by the Companies Act, 2013 ("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 31st March, 2019, and its Loss including Other Comprehensive Income , the changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

(a) Attention is invited to Note- 5 to the Standalone Ind AS Financial Statements, wherein the Company has reported Biological Asset for an amount of Rs.67.63 lakhs as on 31.03.2019 for which the basis of valuation and its recognition has not been produced for our verification. Hence we are unable to comment on value of the Biological asset reported.

(b) Attention is invited to Note- 6 to the Standalone Ind AS Financial Statements, wherein the company has reported investment in equity shares of M/s Camson Agri Ventures Private Limited Rs.3.40 Crores (6500 shares of face value of Rs.10 each & 33,93,500 shares at Rs.17.60 each) as on 31.03.2019. However we have not been provided with the Audited Financial statements of M/s Camson Agri Ventures Private Limited (Associate Company) for the FY 2018-19. Hence we are unable to comment on the impact on statement of profit and loss, if any, and on the carring value of investment due to profitability/performance of the Associate company.

(c) Attention is invited to Note- 9 to the Standalone Ind AS Financial Statements, wherein the company has reported Rs.25.88 Crore as inventory held by the company as on 31.03.2019. Due to the nature of inventory, we could not verify the quantity as well as value of the inventory and we could not satisfy ourself about the correctness of quantity of inventory held. Also we have not been provided with the basis for valuation of the inventory. Further, during the year the company has revalued the inventory, as a result there is a reduction of inventory to the extent of Rs.12.65 Crore, the basis of such revaluation has not been provided to us. In view of the above we are unable to comment on the value of inventory reported.

(d) Attention is invited to Note- 10 to the Standalone Ind AS Financial Statements, wherein the Company has not provided the breakup for trade receivables reported in the Standalone Ind AS financial statements as on 31.03.2019. Furher, we have not been provided with confirmation of balances for trade receivables as on thet date. Hence, we cannot comment on the reliability of the Trade Receivables balances.

(e) Attention is invited to Note-11 to the Standalone Ind AS Financial Statements, wherein the Company has not provided the confirmation of balances and status of account for certain Bank and NBFC accounts as on 31.03.2019. The impact of the same, if any, on the Standalone Ind AS financial statements could not be quantified as the requisite information and records are not made avilable for our verification.

(f) Attention is invited to Note- 16 & 19 to the Standalone Ind AS Financial Statements, wherein the Company has not provided for interest and other charges payable during the year to certain Banks and NBFC accounts due to non-receipt of statement and confirmation of balances. The impact of the same on the Standalone Ind AS financial statements could not be quantified as the requisite information and records are not made available for our verification. Further during the year the company has reversed interest on secured loans which was provisioned during earlier period/year amounting to Rs.7.46 crore, resulting in understatement of loss and liabilities.

(g) Attention is invited to Note- 17 to the Standalone Ind AS Financial Statements, wherein the company has recognised liability towards gratuity of Rs.4.95 lakhs during the year, which is not as per acturial valuation.

Hence we are unable to comment on whether the gratuity liability has been accounted as per Ind AS 19 (Employee Benefits).

(h) Attention is invited to Note- 20 to the Standalone Ind AS Financial Statements, wherein the company has not provided the breakup for Trade payables reported in the Standalone Ind AS financial statements as on 31.03.2019. Further, we have not been provided with confirmation of balances for trade payables as on that date. Hence, we cannot comment on the reliability of the Trade Payable balance.

(i) Attention is invited to Note- 25 to the Standalone Ind AS Financial Statements, wherein the company has reported Rs.2.31 Crores under miscellaneous income being reversal of employeessalary payable.

However, we have not been provided with employeewise breakup of salary payable, ageing of the liability and supporting documents for such write off. And there were no other satisfactory audit proceedures that we could adopt to satisfy ourself that the reversal of liability is free from material misstatement.

(j) Attention is invited to Note- 25 to the Standalone Ind AS Financial Statements, wherein the company has reported Rs.79.07 lakh under miscellaneous income being reversal of Trade Payables. However, we have not been provided with Vendor wise trade payable, ageing of the liability and supporting documents for such write off. And there were no other satisfactory audit procedures that we could adopt to satisfy ourself that the reversal of liability is free from material misstatement.

We conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Ind AS 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 together with the Ethical requirements that are relevant to our audit of the Standalone Ind AS financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide the basis for our opinion on the Standalone Ind AS financial statements

Emphasis of Matters:

i. We draw attention to Note 38 of the Standalone Ind AS financial statements, wherein during the FY 2015-16, the Company had received communication from certain shareholders to conduct forensic audit on the financial matters of the Company. The Company had earlier replied to the said shareholders requesting specific facts and scope/areas for the forensic audit. However, as per the representation received from the Board of Directors / Management of the Company, there is no pursuance from the complainants and due to no substantial framework was provided for the forensic audit to be conducted, the Companys Board of Directors have decided to drop the proposal of such forensic audit. In view of these matters described in the aforesaid Note, we are unable to comment on the applicability of the audit and consequential impact thereof in the event of materialization of such forensic audit.

ii. We draw attention to Note 20 of the Standalone Ind AS financial statements, wherein the Company is yet to receive confirmation of balances from majority of the vendors for trade payables and also their status under MSMED Act, 2006.

iii. As detailed in Annexure B to this report (With respect to the adequacy of the internal financial controls over financial reporting), there is no adequate internal audit system in place in the company during the year in commensurate with its size and nature of operation. Our opinion is not qualified in respect of the above matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Ind AS financial statements of the current period. These matters were addressed in the context of our audit of Standalone Ind AS 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.

Sr. No. Key Audit Matter Auditors Response
1. Revenue Recognition Principal Audit Procedures
Revenue from the sale of goods (hereinafter referred to as "Revenue") is recognised when the Company performs its obligation to its customers and the amount of revenue can be measured reliably and recovery of the consideration is probable. The timing of such recognition in case of sale of goods is when the control over the same is transferred to the customer, which is mainly upon delivery. Our audit approach was a combination of test of internal controls and substantive procedures including:
The timing of revenue recognition is relevant to the reported performance of the Company. The management considers revenue as a key measure for evaluation of performance. • Assessing the appropriateness of the Companys revenue recognition accounting policies in line with Ind AS 115 ("Revenue from Contracts with Customers") and testing thereof.
• Evaluating the design and implementation of Companys controls in respect of revenue recognition.
• Testing the effectiveness of such controls over revenue cut off at year-end.
• Testing the supporting documentation for sales transactions recorded during the period closer to the year end and subsequent to the year end, including examination of credit notes issued after the year end to determine whether revenue was recognised in the correct period.

Information Other than the Standalone Ind AS 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 comprises the information included in the annual return, but does not include the Standalone Ind AS financial statements and our auditors report thereon.

Our opinion on the Standalone Ind AS 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 Ind AS 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 Ind AS 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 Ind AS Financial Statements

The Companys Management is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity 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 read with Rule 7 of the Companies (Accounts) Rules, 2014 and 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 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 Standalone Ind AS 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 Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS 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 Ind AS financial statements.

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

• Identify and assess the risks of material misstatement of the Standalone Ind AS 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.

• Obtain an understanding of internal 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.

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

• 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 Ind AS financial statements or, if such disclosure is 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.

• Evaluate the overall presentation, structure and content of the Standalone Ind AS financial statements, including the disclosures, and whether the Standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

We also communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings 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 Ind AS financial statements of the current period 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 section 143(11) of the Act, we give in the "Annexure A", a statement on the matters specified in the paragraph 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.

(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 Balance Sheet, the Statement of Profit and Loss Including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this report are in agreement with the books of account.

(d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of written representations received from the directors as on March 31, 2019, and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2019, 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 and the operating effectiveness of such controls, refer to our separate report in "Annexure B".

(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid and provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act ; and

(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.

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

For YCRJ & Associates
Chartered Accountants
Firm Registration No. 006927S
Place: Bangalore Yashavanth Khanderi
Date: 28.05.2019 Partner
Membership No. 029066

"Annexure A" to the Independent Auditors Report

(referred to in paragraph 1 under the heading ‘Report on Other Legal & Regulatory Requirementsof our report of even date to the Standalone Ind AS financial statements of the Company for the year ended, 31st March 2019.)

As per the books and records produced before us and as per the information and explanations given to us and based on such audit checks that we considered necessary and appropriate, we confirm that:

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

(b) A major portion of fixed assets have been physically verified by the management in accordance with the programme of verification, which in our opinion, provides for physical verification of all fixed assets at reasonable interval having regard to the size of the company and nature of its assets.

(c) According to the information and explanations given to us and records examined by us and based on the examination of the leave and license agreement, registered sale deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings except for Immovable properties mentioned below are held in the name of the Company as at the balance sheet date. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the Standalone Ind AS financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.

(ii) We have not been provided with Inventory verification report and details of basis of valuation of the inventories held by the companies. Hence, we are unable to comment on clause (ii) of paragraph 3 of the order.

(iii) According to the information and explanation given to us, the Company has granted loans to companies or other parties covered in the register maintained under section 189 of the Companies Act, 2013. In respect of which:

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Companys interest.

(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act, However, we have not been provided with detailed breakup for advances received from customers and their aging, hence we are unable to comment on whether the company has accepted the deposits as per the Companies (Acceptance of Deposits) Rules, 2014 (as amended).

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, and we are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) According to the Information and Explanations given to us, in respect of statutory dues

(a) The Company has been not been regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, GST, Income tax, Sales Tax, Wealth tax, Service tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other statutory dues with the appropriate authorities.

(b) There are undisputed amounts payable in respect of Provident Fund, EmployeesState Insurance, Income tax, Sales Tax (GST), Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2019 for a period of more than six months from the date they became payable and below are the details of the same:

Name of Statute Nature of Dues Amount (Rs.In lakhs) Period to which the Amount Relates Forum where dispute is pending
Employee Provident Act, 1952 PF 58.79 June 2016 to August 2018 NA
Employee State Insurance ESI 1.16 June 2017 to August 2018 NA
Income Tax Act, 1951 Sec 194C 3.08 September 2016 to August 2018 NA
Sec 194I 4.24 August 2016 to September 2018 NA
Sec 194J 8.36 August 2016 to September 2018 NA
Sec 194B 114.01 June 2016 to August 2018 NA
Sec 194A 3.87 April 2018 to August 2018 NA
Commercial Taxes Department, Karnataka PT Payable 0.80 Till August 2018 NA

(c) There are no dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax as on March 31, 2019 on account of disputes. Except below mentioned:

Name of Statute Nature of Dues Amount (Rs.In lakhs) Period to which the Amount Relates Forum where dispute is pending
Income Tax Act 1961 Assessment u/s 143 (3) 217.27 AY 2012-13 AO
Income Tax Act 1961 Assessment u/s 144 317.63 AY 2010-11 AO
Income Tax Act 1961 Assessment u/s 271 (1)(b) 0.10 AY 2010-11 AO
Income Tax Act 1961 Assessment u/s 143 10.74 AY 2009-10 AO
Income Tax Act 1961 Assessment u/s 143 (3) 45.30 AY 2013-14 AO
Income Tax Act 1961 Assessment u/s 143 (3) 855.34 AY 2015-16 DCIT
Income Tax Act 1961 Assessment u/s 271 (1)(C ) 791.19 AY 2015-16 AO

(viii) We have not been provided with details/confirmations/bank statements for the loan accounts of the company. Hence, we are unable to provide details required in clause (viii) of paragraph 3 of the order

(ix) According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer or further public offer or debt instruments. Further, term loans were applied for the purpose for which the loans were obtained.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Standalone Ind AS financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

We draw attention to Note 38 of the Standalone Ind AS financial Statement, during the FY 2015-16, the Company had received communication from certain shareholders to conduct forensic audit on the financial matters of the Company. The Company had earlier replied to the said shareholders requesting specific facts and scope/areas for the forensic audit. However, as per the representation received from the Board of Directors / Management of the Company, there is no pursuance from the complianants and due to the involvement of substantial cost for conducting the forensic audit, the Companys Board of Directors have decided to drop the proposal of such forensic audit.

In view of the matters described in the aforesaid Note, we are unable to comment whether any fraud by the Company or on the Company by its officers or employees may have occurred

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Company is not a Nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the Standalone Ind AS financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

For YCRJ & Associates
Chartered Accountants
Firm Registration No. 006927S
Place: Bangalore Yashavanth Khanderi
Date: 28.05.2019 Partner
Membership No. 029066

Annexure - B to the Independent Auditors Report of even date on the Standalone Ind AS financial statements of Camson Biotechnologies Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Camson Bio Technologies Limited as of 31st March 2019 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 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.

AuditorsResponsibility

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 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 Standalone Ind AS 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 Standalone Ind AS 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 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 Standalone Ind AS 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.

Qualified Opinion

According to information and explanation given to us, the following material weakness has been identified in the operating effectiveness of the Companys internal financial controls over financial reporting as at March 2019

a) There is no adequate internal audit system in place in the company in commensurate with its size and nature of operation. Hence, we are unable to comment on the existence of effective risk assessment process in the company which could potentially result in the lack of control over overall operations of the company.

A ‘material weaknessis a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companys annual or interim Standalone Ind AS financial statements will not be prevented or detected on a timely basis.

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 2019, 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. and except for the effects/possible effects of the material weakness described above on the achievement of the objectives of the control criteria, the Companys internal financial controls over financial reporting were operating effectively as of March 31, 2019

We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2019 Standalone Ind AS financial statements of the Company, and the material weakness do not affect our opinion on the Standalone Ind AS financial statements of the Company.

For YCRJ & Associates
Chartered Accountants
Firm Registration No. 006927S
Place: Bangalore Yashavanth Khanderi
Date: 28.05.2019 Partner
Membership No. 029066