You are here » Home » Companies ยป Company Overview » Hathway Cable & Datacom Ltd

Hathway Cable & Datacom Ltd.

BSE: 533162 Sector: Media
NSE: HATHWAY ISIN Code: INE982F01036
BSE 00:00 | 24 Apr 2020 Hathway Cable & Datacom Ltd
NSE 05:30 | 01 Jan 1970 Hathway Cable & Datacom Ltd

Notice: Undefined property: stdClass::$market_capital_for_nse in /usr2/unibs/application/modules/live-market/views/scripts/company/bs-new-bse-nse-block.php on line 17
OPEN 22.70
PREVIOUS CLOSE 21.51
VOLUME 225167
52-Week high 38.60
52-Week low 10.70
P/E 208.00
Mkt Cap.(Rs cr) 3,682
Buy Price 20.50
Buy Qty 500.00
Sell Price 20.80
Sell Qty 193.00
OPEN 22.70
CLOSE 21.51
VOLUME 225167
52-Week high 38.60
52-Week low 10.70
P/E 208.00
Mkt Cap.(Rs cr) 3,682
Buy Price 20.50
Buy Qty 500.00
Sell Price 20.80
Sell Qty 193.00

Hathway Cable & Datacom Ltd. (HATHWAY) - Auditors Report


Notice: Undefined variable: pattern in /usr2/unibs/application/modules/live-market/views/scripts/company/annual-report.php on line 72

Company auditors report

To the Members of Hathway Cable and Datacom Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

OPINION

We have audited the accompanying standalone financial statements of HathwayCable and Datacom Limited

("the Company") which comprise the Balance Sheet as at March31 2019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "the standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2019its profit (including other comprehensive income) its changes in equity and its cashflows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit of standalone financial statements in accordancewith the Standards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethicsissued by ICAI. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion on the standalone financial statements.

emphasis of matter

We draw your attention to Note 2.06 and 3.08 in respect of recognitionof deferred tax assets and exceptional items comprising of impairment of trade receivablesand exposure to certain entities including joint ventures; and write down of propertyplant and equipments respectively. Our opinion is not modified in respect of these matters

KEY AUDIT MATTERS

Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the standalone financial statementsof the current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.

1. VALUATION AND DISCLOSURE OF DEFERRED TAX ASSETS

Description of Key Audit Matter

The Company has a significant amount of deferred tax assets mainlyresulting from unused tax losses and unabsorbed depreciation allowance. The accounting fordeferred tax assets is significant to our audit since the Company makes judgements andestimates of forecasted taxable income in relation to the realization of deferred taxassets.

As at March 31 2019 the deferred tax assets are valued at '267.67crores. Further reference is made to Note 2.06.

Our response

We tested management's assumptions used to determine that there is areasonable certainty that deferred tax assets recognized in the balance sheet will berealized. This is based upon forecasted taxable income and the periods when the deferredtax assets can be utilized. The forecasts were evaluated by us considering the recentcapital infusion and related business plans approved by the Management. Such evaluationincluded obtaining an understanding of management's planned strategies around businessexpansion revenue stream growth strategies. Furthermore considering the conditionsspecified in the tax laws on conservative basis no deferred tax assets has beenrecognised on impairment of trade receivables.

We have also tested the effectiveness of the Company's internalcontrols around the valuation of deferred tax assets. We also assessed the adequacy of theCompany's disclosures included in Note 2.06.

2. IMPAIRMENT OF TRADE REOEIVABLES

Description of Key Audit Matter

Refer to Note 2.10 on trade receivables and Note 4.12 for disclosureson the trade receivables and the related risks such as credit risk.

The Company's major revenue stream arises from services provided to enduse customers in the form of monthly subscription income. The trade receivables on accountof subscription income are typically unsecured and derived from sales made to large numberof independent customers. Trade receivables from the subscribers amounted to '56.80 croresas at March 31 2019.

The collectability of trade receivables from the subscribers is a keyelement of the Company's working capital management. The Company follows a simplifiedapproach (i.e. based on lifetime Expected Credit Loss model (ECL)) for recognition ofimpairment loss allowance on trade receivables. For the purpose of measuring the lifetimeECL allowance for trade receivables the Company uses a provision matrix which comprise avery large number of small balances grouped into homogenous groups and assessed forimpairment collectively. In addition in case there are events or changes in circumstancesindicating individual or class of trade receivables is required to be reviewed onqualitative aspects necessary provisions are made.

Our response

We assessed the Company's processes and controls relating to themonitoring of trade receivables and considered ageing to identify collection risks. Weobtained evidence of receipts subsequent to the year- end from the customers. We assessedmanagement's assumptions used to calculate the impairment loss on trade receivablesthrough analyses of ageing of receivables assessment of significant overdue tradereceivables. We assessed the overall reasonableness of the allowance for doubtful debts bycomparing the actual loss trends across periods against the allowance rate applied. Weassessed the adequacy of the disclosures on the trade receivables and the related riskssuch as credit risk in Note 4.12.

3. IMPAIRMENT OF PROPERTY PLANT AND EQUIPMENT

Description of Key Audit matter

There is a risk of impairment on the Company's property plant andequipment (PPE) due to the nature of its PPE and the business environment surrounding thePPE. As on March 31 2019 the carrying amount of PPE was '751.75 crores which represent13.53% of total assets.

The management determines at the end of each reporting period theexistence of any objective evidence that the Company's PPE may be impaired. If there areindicators of impairment the deficit between the recoverable amount of the PPE and itscarrying amount would be recognised as impairment loss in Statement of Profit and Loss.

The process of identifying indicators of impairment and determining therecoverable amount of the PPE by management requires significant judgement and estimation.The determination of the recoverable amounts requires estimates of forecasted revenuesgrowth rates profit margins tax rates and discount rates.

Our response

We assessed the determination of the recoverable amount of the PPEbased on our understanding of the nature of the Company's business and the economicenvironment in which its PPE operate.

We reviewed the Company's historical performances and held discussionswith management to understand their assessment of the Company's future performance. Thisincluded obtaining an understanding of management's planned strategies around businessexpansion revenue stream growth strategies and cost initiatives. We assessed management'sestimates applied in the value- in-use model based on our knowledge of the Company'soperations and compared them against historical forecasts and performance and tested themathematical accuracy of the value-in-use model. We evaluated the sensitivity of theoutcomes by considering the downside scenarios against changes to the key assumptions. Wealso assessed the adequacy of the related disclosures in the notes to the standalonefinancial statements.

4. IMPAIRMENT OF CARRYING COST OF INVESTMENTS AND NET RECEIVABLES FROMSUBSIDIARIES JOINT VENTURES AND ASSOCIATES

Description of Key Audit Matter

Refer to Notes 1.07 1.11 and 1.12 for the relevant accounting policyand the critical judgements assumptions and estimation uncertainties used in impairmentassessment of cost of investments in subsidiaries joint ventures and associates and netreceivables due from such entities at the reporting year end. Refer to Note 2.03 and 4.14for the investment in subsidiaries joint ventures and associates and amount due from suchentities respectively.

Total carrying cost of investment in subsidiaries joint ventures andassociates amounted to '1088.62 crores and amount due from subsidiaries joint venturesand associates amounted to '150.48 crores. As these balances are significant they are akey focus area for our audit.

For the non-performing subsidiaries joint ventures and associates orif they have significant negative equity balances the Company will have exposure to losson cost of investments and amount due from the subsidiaries joint ventures andassociates. Any impairment losses on the investments in subsidiaries joint ventures andassociates and the related receivables from these entities have to be recognised in thestandalone financial statements.

Management made a comparison of carrying values of the subsidiariesjoint ventures and associates with the Company's share of net assets or liabilities of thesubsidiaries joint ventures and associates to identify indications of impairment loss onthese investments and receivables due from them. A total exposure of '1239.10 crores wasconsidered. This amount comprised '8.11 crores impairment of cost of investment insubsidiaries joint ventures and associates and '62.11 crores impairment of netreceivables from subsidiaries joint ventures and associates. The total impairment lossallowance for the year was '70.22 crores.

Our response

We have reviewed and considered management's assessment on the netassets or liabilities of these entities. We have also assessed management's basis todetermine potential impairment in both financial and nonfinancial assets of theseentities. We also had discussions with management on the prospects and future plans ofthese entities.

We have also assessed the adequacy of the disclosures made in thestandalone financial statements.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in Annualreport but does not include the standalone financial statements and our auditor's reportthereon.

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

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Management and Those charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performance(including other comprehensive income) changes in equity and cash flows of the Company inaccordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

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

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

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

Materiality is the magnitude of the misstatement in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin; (i) planning the scope of our audit work and evaluating the results of our work; and(ii) to evaluate the effects of any identified misstatements in the standalone financialstatements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of Section143(11) of the Act we give in the "Annexure A" a statement on the mattersspecified in the paragraphs 3 and 4 of the Order.

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

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

b) In our opinion proper books of account as required by law have beenkept 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 OtherComprehensive Income) the Statement of Changes in Equity and the Cash Flow Statementdealt with by this Report are in agreement with the relevant books of account;

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act read with relevant rules issuedthereunder and relevant provisions of the Act;

e) On the basis of the written representations received from thedirectors as on March 31 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2019 from being appointed as a director in termsof Section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure B";

g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act;

h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations as atMarch 31 2019 on its financial position in its standalone financial statements - ReferNote 4.02 (e) to the standalone financial statements;

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts - Refer Note 4.02(d) to the standalone financialstatements; and

iii. There has been no delay in transferring amounts which wererequired to be transferred to the Investor Education and Protection Fund.

For Nayan Parikh & Co.
Chartered Accountants
Firm Registration No. 107023W
K.Y. Narayana
Place: Mumbai Partner
Dated: April 15 2019 Membership No. 060639

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 1 under "Report on Other Legal andRegulatory Requirements" of our report on even date to the members of the company onstandalone financial statements for the Year ended March 31 2019:

(i) (a) The Company has maintained records of Property Plant andEquipment showing particulars of assets including quantitative details and location exceptin case of certain types of distribution equipments like cabling line equipments accessdevices with end users. In view of the management nature of such assets and business issuch that maintaining location-wise particulars is impractical;

(b) Distribution equipments like cabling and other line equipments ofselected networks were verified. The management plans to verify balance networks in aphased manner. Property Plant and Equipment other than distribution equipments andaccess devices with the end users were physically verified during the year based onverification programme adopted by the management. As per this programme all assets willbe verified at least once in a period of three years. The management has represented thatphysical verification of access devices with the end users is impractical; however thesame can be tracked in case of most of the networks through subscribers managementsystem;

The Company is in the process of reconciling book records with outcomeof physical verification wherever physical verification was carried out and haveaccounted for the discrepancies observed on such verification;

(c) The Company does not hold any immovable properties. Accordinglythe paragraph 3(i)(c) of the Order regarding title deeds of immovable properties is notapplicable;

(ii) (a) Inventories have been physically verified during the year bythe management. In our opinion the frequency of verification is reasonable;

(b) The discrepancies noticed on physical verification as compared tothe book records were not material having regards to size and nature of operations andhave been properly dealt with in the books of account;

(iii) The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Act. Accordingly paragraph 3(iii)(a) (b) and (c) ofthe Order are not applicable;

(iv) Based on the audit procedures applied by us during the year underaudit the Company has not granted loans guarantee and security or made investments whichrequire compliance in terms of the provisions contained in the section 185 or section 186of the Act. The Management has based on legal opinion represented that overdue bookdebts are not in the nature of loan and hence do not fall within the scope of section 185of the Act. In such circumstances para 3(iv) of the Order is not applicable;

(v) In our opinion and according to the information and explanationgiven to us the Company has not accepted deposits from the public and therefore theprovisions of sections 73 to 76 or any other relevant provisions of the Act and the rulesframed there under are not applicable to the Company. We have been informed by themanagement that no order has been passed by the Company Law Board or National Company LawTribunal or Reserve Bank of India or any court or any other tribunal in this regard;

(vi) The Central Government has prescribed maintenance of cost recordsunder section 148(1) of the Act for the services rendered by the Company. We have broadlyreviewed the books of account maintained and in our opinion; prima facie the prescribedaccounts and records have been made and maintained by the Company. We have not howevermade a detailed examination of the records with a view to determine whether they areaccurate or complete;

(vii) (a) The Company has generally been regular in depositing withappropriate authorities undisputed statutory dues such as provident fund employees' stateinsurance income tax sales tax service tax duty of customs duty of excise valueadded tax goods and service tax cess and other applicable statutory dues. According toinformation and explanations given to us no undisputed statutory dues payable were inarrears as at March 31 2019 for a period of more than six months from the date theybecame payable;

(b) The details of dues of income tax sales tax service tax duty ofcustoms duty of excise or value added tax or cess which have not been deposited with theconcerned authorities on account of dispute are given below:

Sr No Name of the Statute Nature of the Dues Amount involved (in crores) Period to which the amount relates Forum where dispute is pending
1 Finance Act 1994 Service Tax 0.04 April 2003 to March 2004 Commissioner (Appeals) Service Tax
2 Finance Act 1994 Service Tax 3.70* 2003-04 to 2006-07 Additional Commissioner Service Tax
3 Karnataka Value Added Tax Act 2003 Value Added tax 1.61 April 2011 - March 2013 Deputy Commissioner of Commercial taxes
4 Karnataka Value Added Tax Act 2003 Value Added tax 0.57 April 2012 - March 2013 Deputy Commissioner of Commercial taxes
5 West Bengal Value Added Tax Act 2003 Entry tax 0.03 April 2015 - March 2016 Deputy Commissioner of Commercial taxes
6 West Bengal Value Added Tax Act 2003 Entry tax 0.01 April 2014 - March 2015 Deputy Commissioner of Commercial taxes

* Amount partly paid amounting to र 0.28 crores

(viii) Based on our audit procedure and according to the informationand explanations given to us the Company has not defaulted in repayment of dues to thefinancial institutions banks and government. The Company has not issued any debentures;

(ix) In our opinion and according to the information and explanationsgiven to us and based on overall examination of records the term loans have been appliedfor the purpose for which the loans were obtained. The Company did not raise any money byway of initial public offer or further public offer (including debt instruments);

(x) To the best of our knowledge and belief and according to theinformation and explanations given to us no material fraud by the Company or on theCompany by its officers or employees has been noticed or reported during the year;

(xi) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act;

(xii) In our opinion and according to information and explanation givento us the Company is not a Nidhi Company. Accordingly paragraph 3 (xii) of the Order isnot applicable to the Company;

(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards;

(xiv) During the year according to the information and explanationsgiven to us the Company has made preferential allotment of shares during the period underreview the requirement of section 42 of the Act as applicable has been complied with.However pending such utilization these funds have been temporarily utilized byinvestment in mutual funds.

(xv) Based on our audit procedures performed for the purpose ofreporting the true and fair view of the standalone financial statements the Company hasnot entered into any non-cash transactions with directors. We have been informed that nosuch transactions have been entered into with person connected with directors.Accordingly paragraph 3(xv) of the Order is not applicable to the Company; and

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

For Nayan Parikh & co.
Chartered Accountants
Firm Registration No. 107023W
K.Y. Narayana
Place: Mumbai Partner
April 15 2019 Membership No. 060639

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 2(f) under "Report on Other Legal andRegulatory Requirements" of our report on even date to the members of the company onstandalone financial statements for the Year ended March 31 2019

OPINION

We have audited the internal financial controls with reference tofinancial statements of the Company as of March 31 2019 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects an adequateinternal financial controls system with reference to financial statements and suchinternal financial controls with reference to financial statements were operatingeffectively as at March 312019 based on the internal controls with reference to financialstatements criteria established by the Company considering the essential components ofinternal controls stated in the Guidance Note.

management's responsibility for internal financial controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal controls with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting ('Guidance Note') issued by the Institute of CharteredAccountants of India ('ICAI'). These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing specifiedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both issued by ICAI. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system with reference to financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIALSTATEMENTS

A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company are beingmade only in accordance with authorizations of management and directors of the Company;and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial effect on the standalone financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TOFINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

For Nayan Parikh & co.
Chartered Accountants
Firm Registration No. 107023W
K.Y. Narayana
Place: Mumbai Partner
Dated: April 15 2019 Membership No. 060639


Notice: Undefined variable: mediaAbsUrl in /usr2/unibs/application/modules/live-market/controllers/CompanyController.php on line 6061