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Oil India Ltd.

BSE: 533106 | NSE: OIL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE274J01014 | SECTOR: Oil Drilling And Exploration

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Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Auditor's Report

INDEPENDENT AUDITORS'' REPORT

TO THE MEMBERS OF OIL INDIA LIMITED Report on the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of OIL INDIA LIMITED (the Company), which comprise the Balance Sheet as at 31st March, 2019, the Statement of Profit & Loss including Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes In Equity for the year then ended, and a Summary of the Significant Accounting Policies and Additional Notes (herein after referred to as Standalone Financial Statements).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (the Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS), of the financial position of the Company as at 31st March, 2019, and its financial performance including other comprehensive income, its cash flows and changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (the SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s 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 (the ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s 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 standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report:

Sl No.

Key Audit Matter

Auditor''s Response

1.

Accuracy of recognition, measurement, presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 Revenue from Contracts with Customers (new revenue accounting standard)

The application of the new revenue accounting standard involves certain key judgments relating to identification of distinct performance obligations, determination of transaction price of the identified performance obligations, the appropriateness of the basis used to measure revenue recognized during the year.

Refer Notes 12, 30.4 and 41.7 to the Standalone Financial Statements.

Principal Audit Procedures:

Our audit procedures on adoption of Ind AS 115, Revenue from contracts with

Customers (''Ind AS 115''), which is the new revenue accounting standard, include -

- Evaluated the design and implementation of the processes and internal controls relating to implementation of the new revenue accounting standard;

- 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

- Evaluated the appropriateness of the disclosures provided under the new revenue standard and assessed the completeness and mathematical accuracy of the relevant disclosures.

We found the management''s estimations and judgments in the recognition

of income to be reasonable based on the available evidences.

Sl No.

Key Audit Matter

Auditor''s Response

2.

Evaluation of uncertain tax positions

The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes.

Refer Notes 41.10 and 41.16.1(A) to the Standalone Financial Statements.

Principle Audit Procedures:

Our audit procedures include :

- Evaluated the design and implementation of controls in respect of provision for current tax and the recognition and recoverability of deferred tax assets.

- Considered management''s assessment of the validity and adequacy of provisions for uncertain tax positions, evaluating the basis of assessments and reviewing relevant correspondence and legal advice where available including any information regarding similar cases with the relevant tax authority.

- Assessed the appropriateness of management''s assumptions and estimates including the likelihood of generating sufficient future taxable income to support deferred tax assets.

Based on the procedure performed above, we obtained sufficient audit evidence to corroborate management''s estimates regarding current and deferred tax balances and provision for uncertain tax positions.

3.

Valuation of defined benefits pension scheme liabilities.

Accounting for defined benefit plans is based on actuarial assumptions which require measuring the obligation, evaluating the planed assets and calculating the corresponding actuarial gain or loss. All future cash flows discounted to present value for arriving at the obligation.

Significant estimates including the discount rates, the inflation rates, and the mortality rate are made in valuing the company''s defined benefits obligations. The company engages external actuarial specialist to assist them in selecting appropriate assumptions and calculate the obligations. The effect of these matters is a part of the risk assessment and valuation of the defined benefit obligations has a high degree of estimation as it is based on assumptions.

Refer Notes 38 and 41.1.5 to the Standalone Financial Statements

Principle audit procedures:

Our audit procedures include :

- Evaluated the key assumptions applied (discount rates, inflation rate, mortality rate) as per the Guidance Note applicable.

- Assessed the competence, independence, and integrity of the company''s actuarial expert.

- The controls over the review and approval of actuarial assumptions, the completeness and accuracy of data provided to external actuary, and the reconciliation to data used in experts calculation were tested.

- Discussed with the Management about the liability accrued due to defined benefit plan and to understand the business and assessed if there was any inconsistency in the assumptions.

- Adequacy of the company disclosure as per Ind AS 19 in the notes is verified.

Based on the audit procedures involved, we observed that the assumptions

made by the management in relation to the valuation were supported by

available evidence.

4.

Valuation of investments in certain Equity/ Joint Controlled Interest of an Unlisted Company.

The investment as on 31st March 2019 has been valued by an expert consultant, with reference to the valuation, management had estimated the fair value of the investment at Rs,10,961.13 crores at the year end. The valuation involved significant management judgment. Accordingly, the valuation of the investment was considered one of the key audit matters

The fair value was determined based on the discounted cash flow model. The valuation involved significant judgment including crude oil/ natural gas reserves, future business growth, and future product selling price and production costs to the investee. Refer Notes 6.4 to the Standalone Financial Statements

Principle Audit Procedure:

Our procedure in relation to management''s valuation of the investments

include:

- Evaluating the independent professional valuer competence, capabilities and objectivity

- Assessing the valuation methodology used by the independent professional valuer to estimate the fair value of the investments.

- Checking on a sample basis, the accuracy and reasonableness of the input data provided by the management to the independent valuer.

- Assessing the reasonableness of cash flow projections and audit procedures on management''s assumptions , such as crude oil reserves, future business plan/ growth, future product selling prices and production costs, discount rates by comparing the assumptions to historical results and published market and industry data.

- Discussed with management of the investment to understand the business and assessed if there was any inconsistency in the assumptions used in the cash flow projections.

Based on the audit procedures involved, we found the assumptions

made by the management in relation to the valuation were supported by

available evidence.

Information Other than the Standalone Financial Statements and Auditors'' Report Thereon:

The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Directors'' Report including Annexure to Directors'' Report, Management Discussion and Analysis Report and Report on Corporate Governance, but does not include the Standalone financial statements and our auditor''s 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 in the 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.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) 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 including Other Comprehensive Income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2015. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, management is responsible for assessing the company''s 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 alternatives but to do so.

The Board of Directors is also responsible for overseeing the company''s financial reporting process.

Auditors'' Responsibility for the Audit of 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 auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

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

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

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

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

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

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

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

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

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

Other Matters

1. The Standalone Financial Statements and other Financial information include Company''s proportionate share in unaudited joint ventures in respect of assets Rs,70.35 crore, liabilities Rs,15.25 crore, expenses Rs,55.56 crore, incomes Rs,49.23 crore and the elements making up the Cash Flow Statement and related disclosures as at 31st March, 2019 which is based on statements from the operator and certified by the management.

2. we have also placed reliance on technical/commercial evaluation by the management in respect of categorization of wells as exploratory, development, producing and dry well, allocation of cost incurred on them, impairment, liability for decommission cost, liability under New Exploration Licensing Policy (NELP), and liability for under performance against minimum work programme.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. With respect to the other matters to be included in the Auditor''s Report in terms of the directions of the Comptroller and Auditor-General of India (C&AG) under Section 143 (5) of the Act, and on the basis of our examination of the books and records of the

Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we give in the Annexure ''A'' and Annexure ''B'', statement on the matters specified in the Directions and Additional-directions of C&AG respectively.

2. As required by the Companies (Auditor''s Report) Order, 2016 (the Order), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, and on the basis of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we give in the Annexure ''C'', a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss including other comprehensive income, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2015 as amended.

(e) In terms of notification no.G.S.R.463(E) Dated 05th June

2015 issued by the Ministry of Corporate Affair, section 164(2) of the Act regarding the disqualification of directors is not applicable to the company, since it is a Government Company.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, as required under Section 143 (3)(i) of the Act, refer to our separate report in Annexure D.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements - Refer Note 41.16.1 to the Standalone Financial Statements.

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

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

Statement on the matters specified in the Directions of CAG as referred in Paragraph 1 of Report on Other Legal and Regulatory Requirements paragraph of our report of even date to the members of OIL INDIA LIMITED on the Standalone Financial Statements for the year ended 31st March 2019.

No.

Direction

Reply

1

Whether the company has in place to process all the accounting transaction through IT system? If yes the implications of processing of accounting transaction outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated

During the year under review, the company has maintained all the accounting transactions through SAP system.

2

Whether there is any restructuring of any existing loan or cases of waiver/write off of debts/loans/interest etc. made by the lender to the company due to the company''s inability to repay the loan? If yes, the financial impact may be stated.

No such restructuring of any existing loan or cases of waiver / write off of debts/loans/interest etc made by the lender.

3

Whether funds received/ receivable for specific schemes from centre/ State agencies were properly accounted for/utilized as per its term and conditions? List the cases of deviation

During the year under review, funds received/ receivable for specific schemes from centre/state agencies were properly accounted for/utilized as per its term and conditions.

Annexure B to the Independent Auditors'' Report

Statement on the matters specified in the Additional Directions of C&AG as referred in Paragraph 1 of Report on Other Legal and Regulatory Requirements paragraph of our report of even date to the members of OIL INDIA LIMITED on the Standalone Financial Statements of the Company for the year ended 31st March 2019.

No.

Addition-direction

Reply

I

The accounting treatment of income/ expenditure and receivables/ liabilities arising from agreements/ contracts including JVs for exploration of Oil/Gas may be examined to ensure that they are strictly in conformity with the terms and conditions of the respective Production Sharing Contract (or similar arrangements including Joint Venture)

The accounting treatment of income/expenditure and receivables/liabilities arising from agreements/ contracts including JVs for exploration of Oil/Gas have been examined and found that they are strictly in conformity with the terms and conditions of the respective Production Sharing Contract (or similar arrangements including Joint Ventures) except in respect of non-accounting of interest on cash call for delay/non-payment of the same.

Annexure ''C to the Auditors'' Report

The Annexure C referred to in paragraph 2 of Report on Other Legal and Regulatory Requirements paragraph of our report of even date to the members of OIL INDIA LIMITED on the Standalone Financial Statements of the Company for the year ended 31st March, 2019.

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

(b) As explained to us the fixed assets (except for Oil & Gas Assets ) have been physically verified by the Management in phased manner designed to cover all items over a period of three years. In accordance with this programme the discrepancies noticed on the physical verification has been provided in the accounts. According to information and explanations given by the management and in our opinion, the same are not material;

(c) As per information and explanations given to us, the title deeds of immovable properties are held in name of the Company except for 6,596.86 bighas of land mutation has not been applied since payment for land value has not been made.

(ii) Inventories have been physically verified by the Management during the year. However, inventories of stores and spare parts (excluding stock in transit and/or under inspection with suppliers/contractors) have been physically verified by the Management in a phased manner. The frequency of verification is reasonable. The discrepancies noticed on the physical verification have been provided in the accounts. According to information and explanations given by the management and in our opinion, the same are not material.

(iii) The Company has granted unsecured loans to parties covered in the register maintained under section 189 of the Companies Act, 2013 (the Act). However in respect of aforesaid loans:

(a) The terms and conditions under which such loans were granted are not prejudicial to the Company''s interest;

(b) The schedule of repayment of principal and interest has been stipulated and the repayments or receipts are as per stipulation except for default in repayment of loan amounting to Rs,8.37 crores (US$ 1.20 Million) and interest thereon up to 31st march 2019 by Oil India International BV; and

(c) There is no amount which is overdue for more than ninety days except for the amount as stated in (iii)(b).

(iv) In respect of loans, investments, guarantees and security given or provided , provisions of Section 185 and 186 of the Companies Act, 2013 wherever applicable, have been complied with;

(v) The Company has not accepted deposits from the public. Hence, the direction issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Rules framed there under are not applicable to the Company. As explained to us no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal in this regard;

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

(vii) (a) The Company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance,

income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess, Goods and Service Tax and any other statutory dues as applicable to it with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2019 for a period of more than six months from the date they became payable.

(b) Details of disputed dues in respect of income tax or sales tax or wealth tax or service tax or duty of customs or value added tax or cess, Goods and Service Tax which have not been deposited on account of any dispute are given below:

Name of the Statute

Nature of Dues

Period to which the

Amount (in Rs Crores)

Forum where Dispute is Pending

amount relates (Financial year)

Gross

Amount

Deposited

Not

Deposited

April''2011 to December''2011

21.12

1.94

19.18

January''2012 to September''2012

9.99

0.92

9.07

October''2012 to March''2013

5.79

0.38

5.41

July''2008 to March''2009

0.30

0.01

0.29

CESTAT,

Kolkata

April''2009 to March''2010

0.40

0.02

0.38

April''2013 to March''2014

10.69

0.77

9.92

April''2014 to March''2015

10.82

0.74

10.08

Finance Act, 1994

Service

Tax

April''2014 to March''2015

7.08

--

7.08

July''2012 to June''2017

29.29

1.10

28.19

April''2015 to March''2016

11.91

0.82

11.09

Commissioner of Central Excise & Service Tax, Dibrugarh

Upto 2016-17

260.92

--

260.92

Principle Commissioner of Central Tax, Visakhapatnam

April''2016 to June''2017

257.02

257.02

--

Principle

Commissioner

July''2012 to June''2016

4.25

--

4.25

Add. Commissioner of Goods and Service Tax, Jodhpur

Central Sales Tax Act, 1956

CST

2009-10 to 2010-11

0.67

--

0.67

Supp. of Tax, Naharkatiya

Assam VAT Act, 2005

Assam

VAT

2009-10 to 2012-13

1,327.73

--

1,327.73

Commissioner of Taxes, Assam

Income Tax Act, 1961

Income

Tax

2014-2015

290.05

290.05

--

Income Tax Appeal

2010-2011

10.00

--

10.00

High Court, Rajasthan

Note : Dues include interest and penalty, where ever applicable

(viii) The Company has not defaulted in repayment of loans or borrowings to any financial institution, bank, Government or dues to debenture holders;

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

(x) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year;

(xi) The Company has paid or provided for managerial remuneration in accordance with relevant approvals mandated by the provisions of Section 197 read with Schedule V to the Act;

(xii) As the Company is not a Nidhi company, Nidhi Rules, 2014 are not applicable to it and accordingly the reporting under clause 3(xii) of the Order is not applicable;

(xiii) The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 178 of the Act. The details of such related party transactions have been disclosed in the Standalone Financial Statements as required under Ind AS 24 Related Party Disclosures, specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly the reporting under clause 3(xiv) of the Order is not applicable;

(xv) Based on our examination of books and accounts and as per information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him. Therefore reporting under para 3 (xv) of the Order is not applicable;

(xvi) As per information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, reporting under para 3 (xvi) of the Order is not applicable.

The Annexure D referred to in paragraph 3(f) of Report on Other Legal and Regulatory Requirements paragraph of our report of even date to the members of OIL INDIA LIMITED on the Standalone Financial Statements for the year ended 31st March, 2019.

Report on the Internal Financial Control over Financial Reporting under clause (i) of sub section 3 of section 143 of the Companies Act, 2013 (The Act)

We have audited the internal financial controls over financial reporting of Oil India Limited (the Company) as of 31st March 2019 in conjunction with our audit of the Standalone 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 lying down and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s 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

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Standards on Auditing, to the extent applicable to an audit of internal financial controls and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note), both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Financial Statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone 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 company''s assets that could have a material effect on the standalone Financial Statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2019, based on the internal control over financial reporting criteria established by the Company considering the essential

components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For N.C. BANERJEE & CO. For B.N. MISRA & CO.

Chartered Accountants Chartered Accountants

Firm Reg. No. - 302081E Firm Reg. No. - 321095E

Sd/- Sd/-

(CA M.C. Kodali) (CA B.N. Misra)

Partner Partner

Membership No. 056514 Membership No. 083927

Place: Noida

Date: 27th May, 2019