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Power Grid Corporation of India Ltd.

BSE: 532898 Sector: Infrastructure
NSE: POWERGRID ISIN Code: INE752E01010
BSE 00:00 | 24 Apr 2020 Power Grid Corporation of India Ltd
NSE 05:30 | 01 Jan 1970 Power Grid Corporation of India Ltd

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OPEN 157.70
PREVIOUS CLOSE 158.05
VOLUME 114750
52-Week high 216.20
52-Week low 129.75
P/E 7.80
Mkt Cap.(Rs cr) 83,365
Buy Price 159.35
Buy Qty 174.00
Sell Price 159.35
Sell Qty 500.00
OPEN 157.70
CLOSE 158.05
VOLUME 114750
52-Week high 216.20
52-Week low 129.75
P/E 7.80
Mkt Cap.(Rs cr) 83,365
Buy Price 159.35
Buy Qty 174.00
Sell Price 159.35
Sell Qty 500.00

Power Grid Corporation of India Ltd. (POWERGRID) - Auditors Report


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Company auditors report

To the Members of Power Grid Corporation of India Limited

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Power GridCorporation of India Limited ("the Company") which comprise the Balance Sheetas at March 31 2019 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearended on that date and a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the standalone financialstatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 the profit & totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards 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 independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Emphasis of Matter

We draw attention to the following matters in the notes to the Standalone financialstatements

(a) In respect of recognition of revenue from transmission assets for which finaltariff orders are yet to be issued by the CERC [Refer Note No. 35(b)(ii)]; and

(b) In respect of balance confirmation reconciliation and consequential adjustmentsif any of Trade Receivable and Recoverable and Trade and Other payables which is carriedout on an ongoing basis [Refer Note No. 45(a)].

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the year ended 31stMarch 2019. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matters Auditors' approach to address the Key Audit Matters
1 Recognition of Revenue Our audit approach was a combination of test of internal controls and substantive procedures which includes the following:
The Company has revenue from three business segments viz. Transmission Telecom and Consultancy. • We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard.
Transmission Income is accounted for based on tariff orders notified by the CERC. In case of transmission projects where final tariff orders are yet to be notified transmission income is accounted for on provisional basis as per tariff regulations and orders of the CERC in similar cases. Difference if any is accounted on issuance of final tariff orders by the CERC. As at each reporting date transmission income includes an accrual for services rendered to the customers but not yet billed i.e. Unbilled Revenue. • Evaluated the detailed analysis performed by management on revenue streams by selecting samples for the existing contracts with customers and considered revenue recognition policy in the current period in respect of those revenue streams;
The Company implemented Ind AS 115 in the current financial year and applied the available exemption provided therein to not restate the comparative periods. This is considered as Key Audit Matter due to the nature and extent of estimates made as per CERC tariff Regulations and contracts with customers for recognition of revenue. • Evaluated and tested the effectiveness of the design of Internal controls relating to recognition and measurement of revenue from Transmission Telecom and Consultancy.
 

(Refer Note No. 35(b)(ii) Standalone Financial Statements)

• Verified the transmission revenue based on the CERC tariff Regulation orders circulars guidelines and the company's internal circulars.
• Verified the revenue from Transmission based on the tariff orders notified by CERC during the year on test basis.
 

 

• Verified on test basis the income recognised on provisional basis (Unbilled Revenue) consistently as per the regulatory guidelines for the assets whose final orders are yet to be notified by CERC based on the date of commercial operation (DOCO) letters issued by Regional technical heads and capital cost as certified by the Management.
• Verified the Consultancy and Telecom revenue based on the contracts with customers.
• Evaluated the appropriateness of the disclosures provided under the new revenue standard and assessed the adequacy of the relevant disclosures.
2. Deferred Tax Assets relating to MAT credit entitlement Our audit approach involved:
The Company has considered MAT credit of Rs 5935.70 Crore in anticipation of set off against the tax payable in future years and created Deferred Tax Asset for the same during the year. The same has been recognized as liability of the Regulatory Deferral Account corresponding to the said MAT credit entitlement.

• Understanding the current status of availability of MAT credits

We identified this as a key audit matter because of the importance of this matter intended uses of the financial statements and its materiality and requirement of judgement in assessing future taxable profits for recognisition of MAT credit entitlement. • Discussed with appropriate senior management and evaluated management's underlying key assumptions for set off of MAT credit against taxable future profits
(Refer Note No.26 of Standalone financial statements.)
3. Assessment of contingent liabilities in respect of certain litigations including land compensation direct and indirect taxes various claims filed by other parties not acknowledged as debt. Our audit approach involved;
There is high level of judgement required in estimating the contingent liabilities. The company's assessment of contingent liabilities is supported by the facts of the matter Company's judgement thereon past experience and advices from legal and independent tax consultants wherever necessary. a. Understanding the current status of the litigation for land compensations/ tax assessments.
We identified the above area as Key Audit Matters in view of associated uncertainty relating to the outcome of these matter. (Refer Note No. 61 of Standalone financial statements). b. Examining recent orders from competent authorities and/or communication received from various authorities judicial forums and follow up action thereon.
(Refer Note No. 61 of Standalone financial statements). c. Review and analysis of evaluation of the contentions of the company through discussions collection of details of the subject matter under consideration the likely outcome and consequent potential outflows on those issues.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our Auditor's Report thereon. The otherinformation as identified above is expected to be made available to us after the date ofthis Auditor's Report.

Our opinion on the standalone financial statements does not cover the other informationand we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated. We have nothing to report in this regard.

When we read those documents including annexures if any thereon if we conclude thatthere is a material misstatement therein we shall communicate the matter to those chargedwith the governance.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments 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 is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

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

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

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 in terms of Section 143(11) of the Act we give inAnnexure '1' our report on the matters specified in paragraphs 3 and 4 of the Order tothe extent applicable.

2. In terms of section 143(5) of the Companies Act 2013 we give in the Annexure '2'our report on the directions issued by the Comptroller and Auditor General of India.

3. As required by Section 143(3) of the Act based on our audit we report that:

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

(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account;

(d) In our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act read with the relevant rules issued thereunder;

(e) In view of exemption given vide notification no. G.S.R. 463(E) dated June 5 2015issued by the Ministry of Corporate Affairs provisions of Section 164(2) of the Actregarding disqualification of Directors are not applicable to the Company;

(f) With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the company and the operating effectiveness of suchcontrols refer to our separate report in Annexure '3'. Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols with reference to Standalone financial statements.

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone financial statements - Refer Note No. 47 and 61 to theStandalone financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

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

For S.K. Mittal & Co. For R.G.N.Price & Co. For Kothari & Co. For Parakh & Co.
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn No. 001135N Firm Regn No. 002785S Firm Regn No. 301178E Firm Regn No. 001475C

 

(CA S. Murthy) (CA Rangarajan Raghavan Iyengar) (CA Manaswy Kothari) (CA Gotam Kumar Bagariya)
Partner Partner Partner Partner
M.No. 072290 M.No. 041883 M.No. 064601 M.No. 425104
Place: New Delhi
Date: 29th May 2019

Annexure '1' to the Independent Auditors' Report

As referred to in our Independent Auditors' Report of even date to the members of thePower Grid Corporation of India Limited on the standalone Ind AS financial statements forthe year ended 31st March 2019 we report that:

(i) a) The Company has generally maintained records showing full particulars includingquantitative details and situation of Fixed Assets (Property Plant & Equipment).

b) The fixed assets (Property Plant & Equipment) have been physically verified byexternal agencies during the year. In our opinion frequency of verification is reasonablehaving regard to the size of the Company and nature of its business. No materialdiscrepancies were noticed on such verification.

c) In our opinion and according to information and explanations given to us and on thebasis of an examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company except:

No. of Cases Cost (' in Crores) Net Block (' in Crores)
Leasehold Land 10 200.08 189.42
Freehold Land 25 144.27 144.27
Buildings (Flats in Mumbai) 28 2.95 1.67

(ii) The inventories have been physically verified by external agencies during theyear. In our opinion frequency of verification is reasonable having regard to the size ofthe Company and nature of its business. No material discrepancies were noticed on suchverification.

(iii) According to the information and explanations given to us the Company has notgranted loans secured or unsecured during the year to any companies firms limitedliability partnerships or other parties covered in the register maintained under section189 of the Act. In view of the above the clause 3(iii) (a) clause 3(iii) (b) and clause3(iii) (c) of the Order are not applicable.

(iv) In our opinion and according to information and explanation given to us thecompany has complied with provisions of section 185 and 186 of the Act in respect ofloans investments guarantees and security.

(v) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposit from the public in accordance with the provisions ofthe sections 73 to 76 or any other relevant provisions of the Act and the rules framedthereunder. Accordingly paragraph 3(v) of the order is not applicable to the company.

(vi) We have broadly reviewed the cost records maintained by the company specified bythe Central Government under sub section (1) of section 148 of the Companies Act 2013 inrespect of Transmission & Telecom Operations of the Company and we are of the opinionthat prima facie the prescribed records have been made and maintained. However we havenot made detailed examination of the cost records with a view to determine whether theyare accurate or complete.

(vii) a) According to the information and explanations given to us the Company isgenerally regular in depositing undisputed statutory

dues with appropriate authorities including Provident Fund Income Tax Goods andServices Tax Sales Tax Wealth Tax Service Tax Duty of Custom Duty of Excise ValueAdded Tax Cess and other statutory dues applicable to the Company and that there are noundisputed statutory dues outstanding as at 31st March 2019 for a period of more than sixmonths from the date they became payable. As informed provisions of the Employees StateInsurance Act are not applicable to the Company.

b) According to information and explanations given to us there are no disputed dues ofDuty of Customs or Duty of Excise which have not been deposited. However followingdisputed demands of Income Tax or Sales Tax or Service Tax or Value Added Tax or Cess dueshave not been deposited:

Name of the Statute Nature of dues Amount* (Rs in Crores) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 2.38 For the FY 2010-11 ITAT Delhi
Income Tax Act 1961 Income Tax 4.30 For the FY 2015-16 CIT (A) Delhi
Income Tax Act 1961 Income Tax 5.17 Jurisdictional Assessing Officers of TANs
Income Tax Act 1961 Income Tax 5.38 Jurisdictional Assessing Officer Delhi
Chhattisgarh Entry Tax Act 1976 Entry Tax 164.59 For the FY 2011-12 to 2017-18 Chhattisgarh High Court
Finance Act 1994 Service Tax 0.28 For the F.Y. 2003-04 CESTAT Kolkata
Bihar Value Added Tax2005 Entry Tax 12.00 For FY 2014-15 Chief Commissioner Commercial Tax Bihar
Bihar Value Added Tax2005 Entry Tax 2.16 For FY 2015-16 Joint Commissioner Commercial Tax (Appeals)
J&K GST Act 1962 Sales Tax 6.94 From F.Y.1996-97 to 2001-02 Sales Tax Appellate Tribunal J&K
J&K GST Act 1962 Sales Tax 261.10 From F.Y.2002-03 to 2013-14 Dy./Addl. Commissioner of Sales Tax (appeals) Jammu J&K
Punjab Vat Act 2005 (Entry Tax) Entry Tax 9.64 From F.Y.2011-12 to 201314 Hon'able High Court Punjab & Haryana
Building & Other Construction Workers Cess Act 1996 BOCW 5.00 For FY 2007-08 Hon'able High Court Himachal Pradesh Shimla
Total 478.94

* Demand amount including interest net of amount paid under protest.

(viii) In our opinion and according to the information and explanations given to us theCompany has not defaulted during the year in repayment of loans to its financialinstitutions bankers and dues to the Bond holders.

(ix) In our opinion on an overall basis and according to the information andexplanations given to us the company has applied the term loans including funds raisedthrough bonds for the purpose they were obtained. The company has raised funds by issuanceof debt instruments (bonds) during the year. The company has not raised money by way ofinitial public offer or further public offer during the year.

(x) According to the information and explanations given to us and as represented by themanagement we have been informed that no case of fraud has been committed on or by thecompany during the year.

(xi) In view of exemption given vide notification no. G. S. R. 463(E) dated June 52015 issued by Ministry of Corporate Affairs provisions of Section 197 read withSchedule V of the Act regarding managerial remuneration are not applicable to the Company.Accordingly paragraph 3(xi) of the order is not applicable to the company.

(xii) The company is not a Nidhi Company as prescribed under section 406 of the Act.Accordingly paragraph 3(xii) of the order is not applicable to the company.

(xiii) According to the information and explanations given to us and as represented bythe management all transactions with the related parties are in compliance with sections177 and 188 of the Act where applicable and the details have been disclosed in thestandalone Ind AS financial statements as required by the applicable Indian AccountingStandards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) is not applicable to the company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)is not applicable to the company.

(xvi) According to the information and explanations given to us the company is notrequired to be registered under section 45 IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) is not applicable to the company.

For S.K. Mittal & Co. For R.G.N.Price & Co. For Kothari & Co. For Parakh & Co.
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn No. 001135N Firm Regn No. 002785S Firm Regn No. 301178E Firm Regn No. 001475C

 

(CA S. Murthy) (CA Rangarajan Raghavan Iyengar) (CA Manaswy Kothari) (CA Gotam Kumar Bagariya)
Partner Partner Partner Partner
M.No. 072290 M.No. 041883 M.No. 064601 M.No. 425104
Place: New Delhi
Date: 29th May 2019

Annexure '2' to the Auditors Report

As referred to in our Independent Auditors' Report of even date to the members of thePower Grid Corporation of India Limited on the standalone Ind AS financial statements forthe year ended 31st March 2019.

SDirections Auditors' Comments
1. Whether the Company has system in place to process all the accounting transactions through IT system? If yes the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications if any may be stated. The company is having ERP system (SAP) in place for processing all accounting transactions. Based on our verification no accounting transaction is being recorded/ processed other than through the ERP system in place.
2. Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/loans/ interest etc. made by a lender to the company due to the company's inability to repay the loan? If yes the financial impact may be stated. Based on our verification and explanations and information given to us there were no cases of restructuring of an existing loan or cases of waiver/ write off of debts/loan/interest etc. made by a lender to the company due to the company's inability to repay the loan.
3. Whether funds received/receivable for specific schemes from Central/State agencies were properly accounted for/utilized as per its term and conditions? List the cases of deviation. Based on our verification and explanations and information given to us funds received/receivable for specific scheme from Central/State agencies were properly accounted for and utilized as per its terms and conditions. No deviations were noticed by us.

 

For S.K. Mittal & Co. For R.G.N.Price & Co. For Kothari & Co. For Parakh & Co.
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn No. 001135N Firm Regn No. 002785S Firm Regn No. 301178E Firm Regn No. 001475C

 

(CA S. Murthy) (CA Rangarajan Raghavan Iyengar) (CA Manaswy Kothari) (CA Gotam Kumar Bagariya)
Partner Partner Partner Partner
M.No. 072290 M.No. 041883 M.No. 064601 M.No. 425104
Place: New Delhi
Date: 29th May 2019

Annexure '3' to the Auditors' Report

As referred to in our Independent Auditors' Report of even date to the members of thePower Grid Corporation of India Limited on the standalone Ind AS financial statements forthe year ended 31st March 2019

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the act")

We have audited the internal financial controls with reference to Ind AS financialstatements of the company as at 31st March 2019 in conjunction with our audit of thestandalone Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls with reference to Ind AS financial statements based on the internalcontrols over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India (ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls with reference to Ind AS financialstatements that were operating effectively for ensuring the orderly and efficient conductof business including adherence to Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to Ind AS financial statements based on our audit. We conductedour audit in accordance with the Guidance Note on Audit of Internal Financial Control overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to Ind AS financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to Ind AS financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference toInd AS financial statements included obtaining an understanding of internal financialcontrols with reference to Ind AS financial statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal controls based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to Ind AS financial statements.

Meaning of Internal Financial Controls with reference to Ind AS financial statements

A company's internal financial control with reference to Ind AS financial statements isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to Ind AS financial statements includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or dispositions of the Company's assets that could have amaterial effect on the standalone Ind AS financial statements.

Inherent Limitations of internal Financial Controls with reference to Ind AS financialstatements

Because of the inherent limitations of internal financial controls with reference toInd AS financial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to Ind AS financial statements to future periods are subject to the risk thatthe internal financial controls with reference to Ind AS financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to Ind AS financial statements and such internalfinancial controls with reference to Ind AS financial statements were operatingeffectively as at 31st March 2019 based on the internal financial controls overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For S.K. Mittal & Co. For R.G.N.Price & Co. For Kothari & Co. For Parakh & Co.
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Regn No. 001135N Firm Regn No. 002785S Firm Regn No. 301178E Firm Regn No. 001475C

 

(CA S. Murthy) (CA Rangarajan Raghavan Iyengar) (CA Manaswy Kothari) (CA Gotam Kumar Bagariya)
Partner Partner Partner Partner
M.No. 072290 M.No. 041883 M.No. 064601 M.No. 425104
Place: New Delhi
Date: 29th May 2019

 


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