Om Metals Infraprojects Ltd Auditors Report.

To the Members of

Om Metals Infraprojects Limited

Report on the Standalone Financial Statements

Qualified Opinion

We have audited the standalone financial statements of Om Metals Infraprojects Limited ("the Company"), which comprise the balance sheet as at 31st March 2019, and the statement of Profit and Loss (including other comprehensive income) , the statement of changes in equity and statement of cash flows for the year ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information in which are incorporated financial statements of Engineering and Hotel Divisions of the Company audited by other auditors and whose reports have been furnished to us. Our opinion, in so far as it relates to the affairs of such division is based solely on the report of other auditors.

In our opinion and to the best of our information and according to the explanations given to us, except for the matters discussed in basis of qualified opinion, the aforesaid standalone 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 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, 2019, and the profit, and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis of qualified opinion

1. As stated in Note 52(b) to the standalone financial statements, the Companys non-current investments as at 31 March 2019 include investments aggregating Rs. 488.45 Lacs in a subsidiary; being considered good and recoverable by the management considering the factors stated in the aforesaid note.

However, this Subsidiary has accumulated losses and its net worth is fully eroded. Further, this subsidiary is facing liquidity constraints due to which they may not be able to realize projections made as per their respective business plans, thus we are unable to comment upon the carrying value of these non-current investments and recoverability of the aforesaid dues and the consequential impact, if any, on the accompanying standalone financial statements and as per audited financial statements of subsidiary provided to us, respective auditor has not on qualified on going concern matter. The recoverability of the said investment is in doubtful in our opinion.

2. As stated in Note 52 (a) & 52(d) to the standalone financial statements, the Companys noncurrent investments as at 31 March 2019 include investments aggregating Rs. 5092.90 Lacs and advances of Rs. 8518.13 Lacs current as well as non-current in two joint ventures being considered good and recoverable by the management considering the factors stated in the aforesaid note.

Both joint ventures (52(a) & 52(d)) has filed termination to their respective authority and claimed the amount invested and termination payments as per concession agreement. But companys operating only on behalf of respective authority and is not booking any expenses and revenue in books after termination. So far as this matter indicates material uncertainty about the going concern of these joint ventures. In our view, recoverability of the amount invested and advance provided not certain but no provisioning has been made against such diminishing of investment and loans. Management is of the view that such arbitration claims has merits and will be in favor of joint ventures and amount invested and advance provided will be recovered fully.

3. Company granted advance to SPML Infra Limited amount of Rs. 541.95 lacs as at 31st march, 2019. The Management represented that this amount will be adjusted against capital contribution of SPML Infra Ltd lying in OM Metal SPML JV (Ujjain) which is a joint operation and proportionately included in companys financial statements. However, in absence of third party confirmation and other supportive evidence, we are unable to comment upon such balances and such adjustment. Further company has not adjusted such amount in books.

Other Matter

(i) We did not audit the separate financial statements of five joint operations, included in these standalone financial statements, whose financial statements reflect total assets of Rs. 8576.45 Lacs and net liabilities of Rs. 6464.02 Lacs as at 31 March 2019, and total revenues of Rs.7189.37 Lacs and Net Profit before tax of Rs. 1258.49 Lacs for the year ended on that date, as considered in these standalone financial statements. The Company had prepared separate set of statutory financial statements of these joint operations for the years ended 31 March 2019 in accordance with accounting principles generally accepted in India and which have been audited by other auditors under generally accepted auditing standards applicable in India. Our opinion in so far as it relates to the amounts and disclosures in respect of these joint operations is solely based on report of the other auditors and the conversion adjustments prepared by the management of the Company, which have been audited by us. Our opinion is not qualified in respect of this matter.

(ii) The Company has executed an agreement to sale of Hotel Om Tower (Hotel Division) in current year and whole amount against sale consideration of Rs. 3600.00 lacs has been received on various dates from the buyer of property as at 31/03/2019. Company has classified such net current and noncurrent assets as held for sale under the other current assets and recognized them on lower of book value and recoverable amount which is based upon the managements prudent business practice and does not affect companys profitability or going concern.

(iii) As stated in note no. 62 Company made claims against customer/parties/ subsidiaries which represents work done in earlier years or loss of interest or any other matter which are either in dispute or yet to be finalized by both the parties amounting to Rs. 59140.09 Lacs net off counter claims of Rs. 2146.53 lacs. Outcome of such claims are presently unascertainable. No adjustment has been made in the standalone financial statements. Our opinion is not qualified in respect of this matter.

Basis for Opinion

We conducted our audit of the standalone 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 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 Companies Act, 2013 and the Rules there under, 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.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. The Key audit matters on financial statements of Engineering and Hotel Divisions and joint operations of the Company are provided by other auditors and whose reports have been furnished to us. Our opinion, in so far as it relates to the affairs of such division is based solely on the report of other auditors.

S. no. Key Audit Matter Auditors Response
i. Revenue Recognition Principal Audit Procedures
There are significant accounting judgements including estimation of costs to complete, determining the stage of completion and the timing of revenue recognition. Our procedures included :
• Testing of the design and implementation of controls involved for the determination of the estimates used as well as their operating effectiveness;
The Company recognizes revenue and profit/ loss on the basis of stage of completion based on the milestone approved by project authority. • Testing the relevant information technology systems access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard;
Cost contingencies are included in these estimates to take into account specific uncertain risks, or disputed claims against the Company, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the contract life and adjusted where appropriate. • Testing a sample of contracts for appropriate identification of performance obligations;
• For the sample selected, reviewing for change orders and the impact on the estimated costs to complete;
• Engaging technical experts to review estimates of costs to complete for sample contracts; and
• Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings
2. Evaluation of uncertain tax positions Principal Audit Procedures
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Obtained details of completed tax assessments and demands for the year ended March 31, 2019 from management. We involved our internal experts to challenge the managements underlying assumptions in estimating the tax provision and the possible outcome of the disputes. Our internal experts also considered legal precedence and other rulings in evaluating managements position on these uncertain tax positions.
Refer Notes 44 to the Standalone Financial Statements
Additionally, we considered the effect of new information in respect of uncertain tax positions as at March 31, 2018 to evaluate whether any change was required to managements position on these uncertainties.
3. Recoverability of Indirect and direct tax Principal Audit Procedures
receivables We have involved our internal experts to review the nature of the amounts recoverable, the sustainability and the likelihood of recoverability upon final resolution.
As at March 31, 2019, non-current assets in respect of withholding tax and others include Cenvat recoverable amounting to Rs. 698.97 Lacs which are pending adjudication.
4. Assessment of the carrying value of unquoted equity instruments in loss making subsidiaries and joint ventures. Besides obtaining an understanding of Managements processes and controls with regard to testing the impairment of the unquoted equity instruments in loss making subsidiaries and joint ventures.
The impairment review of unquoted equity instruments and debt, with a carrying value of Rs 5580.65 lacs, is considered to be a risk area due to the size of the balances as well as the judgmental nature of key assumptions, which may be subject to management override.
Our procedures included the following:
• Engaged internal fair valuation experts to challenge managements underlying assumptions and appropriateness of the valuation model used;
• Compared the Companys assumptions with
The carrying value of such unquoted equity instruments and debt is at risk of recoverability. comparable benchmarks in relation to key inputs such as long-term growth rates and discount rates;
The net worth of the underlying entities has significantly eroded and the orders in hand are below the break-even production levels of this facilities. The estimated recoverable • Assessed the appropriateness of the forecast cash flows within the budgeted period based on their understanding of the business and sector experience;
amount is subjective due to the inherent uncertainty involved in forecasting and discounting future cash flows. • Considered historical forecasting accuracy, by comparing previously forecasted cash flows to actual results achieved; and
Refer to Note Number 7 of the Standalone Financial Statements • Performed a sensitivity analysis in relation to key assumptions.

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 Annexure 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 Companies Act, 2013 ("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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of 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 also 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.

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" statement on the matters specified in paragraphs 3

and 4 of the 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 except for the matter described in the basis of qualified opinion paragraph.

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 and proper returns adequate for the purposes of our audit have been received from the branches i.e. Engineering and Hotel Divisions of the Company not visited by us;

c) The report(s) on the accounts of the branch office(s) i.e. Engineering, & Hotel Divisions and joint operations of the Company audited under section 143 (8) of the Act, by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

d) The Balance Sheet, the Statement of Profit and Loss including Other comprehensive income, statement of changes in equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches Engineering, & Hotel Divisions and Joint operations, not visited by us

e) Except for the effects of the matter described in the basis for qualified opinion paragraph, In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards 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, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 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 Report in "Annexure B".

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 litigation on its financial position in its Financial Statement as referred in Note no 44 to the Financial Statement.

ii. The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on Long Term Contracts including derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.

For Mahipal Jain & Co.
Chartered Accountants
Firm Registration No 007284C
Place : Delhi
Dated : 30.05.2019
{CA Rupesh Garg}
Partner
M.No.404191

ANNEXURE A TO THE AUDITORS REPORT

Annexure referred to in paragraph 1 under the heading of "Report on other legal and Regulatory requirements" of the independent Auditors Report on the Financial Statements of Om Metals Infra-projects Limited ("The Company) for the year ended on 31st March 2019.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of accounts and other records examined by us in the normal course of audit. In preparing the report, we have considered the report made under the aforesaid order by other auditors, who have audited the Financial Statements of the Divisions of Engineering and Hotel and joint operation of the Company we report that:

(i) In respect of fixed assets:

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

b. The fixed assets were physically verified during the year except Engg division, management in accordance with a program of verification, the frequency of verification is reasonable having regard to the size of the company and the nature of its fixed assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification as compared to books records. In Engg. Division, physical verification has been done by company once In two years.

c. The title deeds of all the immovable properties are held in the name of the company except for the below:

(Amount in Rs. Lacs)

Name of Property Located at Carrying Value Title Deed in the name of
Industrial Land & Building Plot No A-37-38, A-21-22, B-26, Industrial Estate , Kota 3.00 Om Metals & Mineral P Ltd*
Industrial Land & Building Plot No B-131, IPIA, Kota Land - 483.49 Building - 34.65 Om Structural India P Ltd**
Industrial Land & Building Special - 1, IPIA, Kota Land - 2443.82 Building 282.83 Om Rajasthan Carbide Ltd**
Industrial Land & Building Special - 1A, IPIA, Kota Land - 1876.18 Building - 47.89 Jupitar Manufacturing P Ltd**
Commercial Building NBCC Plaza, IVth Floor, Sector -11, Pushp Vihar, Saket, Delhi 2100.00 Pending for registration

*These are the earlier name of "the Company"

** Immovable properties i.e. freehold/lease hold land and buildings are held in the name of the Company and such immovable properties has been transferred pursuant to the scheme of amalgamation under section 391 to 394 of the Companies Act 1956, the transfer is through the order of the Honble High Court Rajasthan, Jaipur and are pending for registration in favor of the Company.

(ii) The management has conducted physical verification of inventory at reasonable intervals during the year. No material discrepancies were noticed on the physical verification.

(iii) The Company has granted unsecured loan to Subsidiaries and joint Venture covered in the register maintained under section 189 of the Companies Act, 2013 and with respect to the same:

a) In our opinion the terms and conditions of such loans are not, prime facie, prejudicial to the Companys interest.

b) The schedule of repayment of the principal and the payment of the interest has not been stipulated and hence we are unable to comment as to whether repayment/ receipt of the principal amount and the interest are regular.

c) In the absence of stipulated schedule of repayment of principal and payment of interest, we are unable to comment as to whether there is any amount which is overdue for more than 90 days and whether reasonable steps have been taken by the company for recovery of the principal amount and interest.

(iv) According to information and explanation given to us and based on the legal opinion obtained by the company that the company being a company engaged in the business of providing infrastructure facilities in terms of section 186, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantee and security as applicable.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of accounts maintained by the company, pursuant to the Rules made by the Central Govt., for the maintenance of cost records under sub section (1) of section 148 of the Companies Act, in respect of company and are of the opinion that, prima-facia, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

(vii) (a) Undisputed statutory dues including provident fund, employees state insurance, income- tax, sales-tax, service tax, GST, duty of customs, duty of excise duty, value added tax, cess have not been regularly deposited to the appropriate authorities. There have been significant delay in large number of cases. Further, the undisputed amounts payable in respect thereof which were outstanding at the year-end for a period of more than six months from the date they become payable are as follows:

Statement of arrear of statutory dues outstanding for more than six months:

Name of Statute Nature of Dues Amount in Rs. Lacs Period to which the amount relates Due date Date of Payment
Labour Law Labour Cess 29.03 Prior to 01.04.2018 Various Due Dates Not paid till date
State Tax, Gujrat Professional Tax 0.25 Prior to 01.04.2018 Various Due Dates Not paid till date

(b) According to the information and explanations given to us and the records of the company examined by us, the dues outstanding in respect of income-tax, sales-tax, service tax, duty of excise and Wealth Tax on account of any dispute, are as follows:

Nature of the Statute Nature of Dues Forum where dispute is pending Demand Amount (Rs. in Lacs.) Amount paid under protest (Rs. in lacs.) Period to which the amount relates
Central Sales Tax Act, 1956. and Sales Tax/ Sales Tax & Entry Tax Commissioner (Appeals)/Tribunal 191.87 0.00 1990-91, 2009-10 to 2010-11 and 2015-16
VAT Act of various states High Court 16.91 0.00 2003-04
Central Excise Act, 1944 Excise Duty Tribunal (CESTATE) 471.49 0.00 2009-10 to 2011-12
Commissioner(Appeal) and Show Case 605.34 21.50 2000-01 to 2015-16
Income Tax Act, 1961 Income Tax ITAT 2.19 2.19 1991-91 to 2013-14
CIT Appeal 217.73 54.14 2007-08 to 2016-17
Service tax law , finance Act, 1994 Service Tax Commissioner (Appeals)/Tribunal / Show Cause 204.85 0.00 2003-04 to 2005-06 & 2010 -11 to 2011-12 and 2014-15
Wealth Tax Act. Wealth Tax ITAT 0.28 0.28 1992-1993

Note: 1) Amount as per demand orders including interest and penalty wherever mentioned in the order.

2) In addition to above, Income Tax Department filed Appeal before honorable Supreme Court against decision of Honorable High Court for the financial year pertaining to 2002-03 to 2009-10 (Total Number of Appeals 15 Amounting Rs. 5651.84 Lacs pending).

3) In addition to above, Income Tax Department filed Appeal before Honorable Rajasthan High Court against decision of ITAT for the financial year pertaining to 1976-77, 1995-96 and 2013-14 (Total Number of Appeals

3 Amounting Rs. 2012.36 Lacs pending).

(viii) In our opinion and according to our opinions and explanations the company has no loans or borrowings payable to govt or debenture holder.

During the year the company delayed in repayment of dues to banks which are as follows:

Bank Days Principal Interest Total
Daimler Financial Services India Pvt Ltd. 0-30 2.55 0.52 3.07
HDFC Bank Ltd. 0-30 84.45 0.00 84.45
Kotak Mahindra Prime Ltd. 0-30 0.78 0.31 1.09
HDFC bank Ltd. 0-30 1.89 0.21 2.10

(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans were applied for the purposes for which the loans were obtained.

(x) No fraud by the Company or on the company by its officers or employees has been noticed or reported during the period covered by our audit.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 of the Act read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, clause 3(xii) of the Order is not applicable.

(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 financial statements etc. as required by the applicable accounting standards.

(xiv) During the year, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.

(xv) The company has entered in sale transaction of Hotel Property to Jupiter Metal Private limited as non-cash transactions with directors or persons connected with them. Refer note no. 60

(xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For Mahipal Jain & Co.
Chartered Accountants
Firm Registration No 007284C
Place: Delhi
Dated: 30.05.2019
{CA Rupesh Garg}
Partner
M.No. 404191

Annexure to the Independent Auditors Report of even date to the members of Om Metal Infraprojects Limited, on the financial statements for the year ended 31st March 2019

INDEPENDENT AUDITORS REPORT

Annexure B

Independent Auditors report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act"). In preparing the report, we have considered the report made under the aforesaid order by other auditors, who have audited the Financial Statements of the Divisions of Engg. & Hotel and Joint operations of the Company we report that:

1. In conjunction with our audit of the standalone financial statements of Om Metals Infraprojects Limited. ("the Company") as of and for the year ended 31 March 2019, we have audited the internal financial controls over financial reporting (IFCoFR) of the company of as of that date.

Managements Responsibility for Internal Financial Controls

2. 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 Control Over Financial Reporting (the Guidance Note) 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 the companys 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 Act.

Auditors Responsibility

3. 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 and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining an understanding of IFCoFR, 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 financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A companys IFCoFR 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 IFCoFR 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 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

7. Because of the inherent limitations of IFCoFR, 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 IFCoFR to future periods are subject to the risk that IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified Opinion

In our opinion, according to information and explanations given to us and based on our Audit Procedure performed, the following material weakness has been identified in the operating effectiveness of the Companys IFCoFR as at 31.03.2019.

The Companys Internal Financial Control in respect of Supervisory and review controls over process of determining of (a) Carrying Value of the Companys Non Current Investment in its Subsidiaries and Joint Venture (b) recoverability of Non Current Loans, other Non Current Financial Assets and Other Current Financial Assets due from such subsidiaries were not operating effectively. Absence of aforesaid assessment in accordance with the accounting principal generally accepted in India could potentially result in a material misstatement in the carrying value of investments in such Subsidiaries and the aforesaid dues from such subsidiaries and consequently, could also impact the Profit (Financial Performance including other Comprehensive Income) after tax.

A material weakness is a deficiency, or a combination of deficiencies, in IFCoFR, such that there is a reasonable possibility that a material misstatement of the Companys annual or interim financial statement will not be prevented or detected on a timely basis.

Qualified Opinion

8. In our opinion, except for the possible effects of the material weakness describe in the basis for Qualified Opinion Paragraph, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 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 Control Over Financial Reporting (the Guidance Note) issued by the Institute of Chartered Accountants of India (ICAI).

We have considered the material weakness identified and reported above in determining the nature, timing, and extent of Audit test applied in our Audit of the Standalone Financial Statements of the Company as at and for the year ended 31.03.2019, and the material weakness has affected our opinion on the standalone Financial Statements of the Company and we have issued a Qualified Opinion on the Standalone Financial Statement.

For Mahipal Jain & Co.
Chartered Accountants
Firm Registration No 007284C
Place: Delhi
Dated: 30.05.2019
{CA Rupesh Garg}
Partner
M.No. 404191