To the members of Godfrey Phillips India Limited
Report on the Audit of the Standalone Ind AS Financial Statements Opinion
We have audited the accompanying standalone Ind AS financial statements of GodfreyPhillips India Limited ("the Company") which comprise the Balance sheet asat March 31 2019 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2019 its profitincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs)as 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 Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 31 2019. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context. We havedetermined the matters described below to be the key audit matters to be communicated inour report. We have fulfilled the responsibilities described in the Auditor'sresponsibilities for the audit of the standalone Ind AS financial statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone Ind AS financial statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanying standalone Ind AS financial statements.
|Key audit matters ||How our audit addressed the key audit matter |
|Recoverability of carrying value of property plant and equipment leasehold land under operating lease and capital work in progress relating to retail and chewing business (as described in note 5 (c) (i) & (ii) of the standalone Ind AS financial statements) || |
|As at March 31 2019 the carrying value of property plant and equipment including leasehold land under operating lease and capital work in progress relating to retail and chewing business was Rs. 7451.70 lakhs and Rs. 7271.23 lakhs respectively. ||Our procedures amongst others included the following: |
| ||-Obtained and assessed management analysis of internal and external factors impacting the Company's retail and chewing business in line with Ind AS 36. |
|Recoverability of carrying value of assets relating to retail and chewing business have been identified as a key audit matter due to: ||-In relation to the retail business where impairment indicators were identified by the management obtained and evaluated the valuation report of management appointed expert for the purpose of testing the key assumptions and methodologies used to determine the recoverable amount by engaging valuation specialists. |
|- The significance of the carrying value of assets being assessed. ||In case of chewing business critically evaluated the management basis of concluding with no indicators of impairment as at March 31 2019 which require further analysis for determination of the recoverable amount by obtaining the business projections holding discussions with the business heads and corroborating the explanations provided by the management in respect of the current year performance of the said business. |
|- Significant losses being incurred in the retail business despite increase in the number of stores in the current year and continuing losses in the chewing business. || |
|- The assessment of the recoverable amount of the Company's Cash Generating Units (CGUs) involves significant judgements and estimates. ||-Assessed the independence competence and objectivity of the management experts used for determining the recoverable amount. |
|The key judgements and estimates centred on identification of indicators of impairment and future ||-Compared the recoverable amount of the assets relating to retail business to the carrying value in books. |
|projections relating to the aforesaid business. ||-Assessed the disclosures made in the financial statements by the Company in this regard. |
Impairment of investments in one of the subsidiaries Flavors & More Inc. (asdescribed in note 9 and note 48 of the standalone Ind AS financial statements)
|As at March 31 2019 the carrying value of Company's investment in subsidiaries amounted to Rs. 7459.65 lakhs. Management reviews on a periodical basis whether there are any indicators of impairment of any of its investments. ||Our procedures in assessing the impairment of investments included the following: |
|For investments where impairment indicators exist management estimated the recoverable amounts of the investments being higher of fair value less costs of disposal and value in use. Significant judgements are required to determine the key assumptions used in determination of fair value / value in use. As the impairment assessment involves significant assumptions and judgement we regard this as a key audit matter. ||-Obtained and assessed management analysis of impairment of investment in subsidiaries. Assessed factors considered by the management as impacting such analysis of impairment assessment in line with Ind AS 36. |
| ||-Specifically in relation to those investments where impairment indicators were identified tested the methodologies used by the management to determine the recoverable amount of such investments. |
| ||-Compared the recoverable amount of the subject investment to the carrying value in books. |
|We focused our effort on those investments where there are impairment indicators. The Company identified impairment in carrying value of investment in one of its subsidiary Flavors & More Inc.'owing to its decision for closure of business operations of the said subsidiary. Impairment charge of Rs. 1508.50 lakhs has been recorded in the current year. ||-Assessed the disclosures made in the financial statements by the Company regarding such investments. |
Revenue recognition (as described in note 4.1.1 and note 26 of the standalone Ind ASfinancial statements)
|For the year ended March 31 2019 the Company As part of our audit procedures our procedures has recognized revenue from operations of Rs. included the following: 259203.25 lakhs. - Read and assessed the Company's revenue recognition Revenue recognition has been recognized as a key accounting policies including the recognition and audit matter due to the following consideration: classification criteria for trade spend in accordance || |
|- ||Cut-off: The variety of terms that define with the requirements of Ind AS 115. |
| ||when control is transferred to the customer. - Performed walkthroughs and test of controls assisted by Further the Company focuses on revenue our IT specialists of the revenue recognition processes as a key performance measure which and assessed the design and operating effectiveness of could create an incentive for revenue key controls. |
|- ||to be recognised before the control is -Selected a sample of transactions taking place at either transferred. This give rise to the risk that side of the balance sheet date to evaluate whether revenue is not recognized in the correct revenue was recognised in the correct period by period. agreeing the date of revenue recognition to third party Measurement: Revenue is measured net of supports such as bill of lading lorry receipts etc. |
| ||pricing allowances other trade discounts - Tested the provision calculations related to trade and price promotions to customers spend by agreeing a sample of amounts recognised (collectively trade spend'). There is to underlying arrangements and other supporting a risk that trade spend accruals are documents. Compared the year end rebate provisions incorrectly recorded as its also requires and rebate costs in the year to prior year amounts and a certain degree of estimation resulting expectations in order to identify unusual trends. in understatement of the associated expenses and accrual. |
|Accuracy and completeness of related party transactions (as described in note 45 of the standalone Ind AS financial statements) || |
|The Company has undertaken transactions with its related parties. These include sale of goods to related parties purchase of goods and services from related parties. ||As part of our audit procedures our procedures included the following: |
| ||- Obtained and read the Company's policies processes and procedures in respect of identifying related parties obtaining approval recording and disclosing related party transactions. |
|We identified accuracy and completeness of the said related party transactions as a key audit matter due to significance of related party transactions risk of transactions entered not transacted on an arm's length basis and risk of such transactions remaining undisclosed. ||- Read minutes of shareholder meetings board meetings and audit committee minutes regarding Company's assessment of related party transactions being in the ordinary course of business at arm's length. |
| ||- Tested on a sample basis related party transactions with the underlying contracts confirmation letters and other supporting documents. |
| ||- Agreed the related party information disclosed in the financial statements with the underlying supporting documents on a sample basis. |
| ||- Assessed the related party disclosures in the financial statements through review of statutory information books and records and other documents obtained during the course of our audit. |
We have determined that there are no other key audit matters to communicate in ourreport.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone Ind AS financial statements and our auditor's report thereon. The Annualreport is expected to be made available to us after the date of this auditor's report. Ouropinion on the standalone Ind AS 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 Ind AS financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether such other information is materially inconsistent withthe standalone Ind AS financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.
When we read the Annual report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Standalone IndAS 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 Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone Ind AS 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.
Those charged with governance are also responsible for overseeing the Company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial 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 Ind AS 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 standalone Ind ASfinancial 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 control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the standalone Ind ASfinancial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation. We communicate with those charged with governance regardingamong other matters the planned scope and timing of the audit and significant auditfindings including any significant deficiencies in internal control that we identifyduring 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 withthose charged with governance we determine those matters that were of most significancein the audit of the standalone Ind AS financial statements for the financial year endedMarch 31 2019 and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit; (b) In ouropinion proper books of account as required by law have been kept by the Company so faras it appears from our examination of those books; (c) The Balance Sheet the Statement ofProfit and Loss including the Statement of Other Comprehensive Income the Cash FlowStatement and Statement of Changes in Equity dealt with by this Report are in agreementwith the books of account;
(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended; (e) On the basis of the writtenrepresentations received from the directors as on March 31 2019 taken on record by theBoard of Directors none of the directors is disqualified as on March 31 2019 from beingappointed as a director in terms of Section 164 (2) of the Act; (f) With respect to theadequacy of the internal financial controls over financial reporting of the Company withreference to these standalone Ind AS financial statements and the operating effectivenessof such controls refer to our separate Report in "Annexure 2" to this report;(g) In our opinion the managerial remuneration for the year ended March 31 2019 has beenpaid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act; (h) With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 as amended in our opinion and to the best of our information andaccording to the explanations given to us: i. The Company has disclosed the impact ofpending litigations on its financial position in its standalone Ind AS financialstatements Refer Note 37 to the standalone Ind AS financial statements; ii. TheCompany did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses; iii. There has been no delay in transferringamounts required to be transferred to the Investor Education and Protection Fund by theCompany.
|For S.R. Batliboi & Co. LLP |
|Chartered Accountants |
|ICAI Firm Registration Number: 301003E/E300005 |
|per Atul Seksaria |
|Membership Number: 086370 |
|Place of Signature: New Delhi |
|Date: May 30 2019 |
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(b) All property plant and equipment have been physically verified by the managementduring the year and no material discrepancies were identified on such verification.
(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company.
(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. Inventories lying with third parties have beenconfirmed by them as at March 31 2019 and no material discrepancies were noticed inrespect of such confirmations.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theAct. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of the Order are notapplicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to usprovision of section 186 of the Companies Act 2013 in respect of investments andguarantees made have been complied with by the Company. In our opinion and according tothe information and explanations given to us there are no loans and securities granted inrespect of which provisions of section 185 and 186 of the Companies Act 2013 areapplicable and hence not commented upon.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under Section 148(1) of the Companies Act 2013for the products of the Company and hence not commented upon.
(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of custom duty of excise value added tax goodsand service tax cess and other statutory dues applicable to it. (b) According to theinformation and explanations given to us no undisputed amounts payable in respect ofprovident fund employees state insurance income-tax service tax sales-tax customduty value added tax goods and service tax duty of excise cess and other materialstatutory dues were outstanding at the year end for a period of more than six monthsfrom the date they became payable. (c) According to the records of the Company the duesof income tax excise duty goods and service tax sales tax value added tax and servicetax which have not been deposited on account of any dispute and where the Company is inappeal are as follows:
|Nature of the Statute ||Nature of the Dues ||Amount (Rs. In Lakhs) ||Amount Deposited (Rs. In Lakhs) ||Financial Years to which the amount relates ||Forum where dispute is pending |
|Central Sales Tax Act 1956 ||Sales Tax ||37.72 ||18.86 ||2006-07 ||Sales Tax Tribunal |
| ||Value ||2.13 ||0.23 ||2014-15 ||Sales Tax Tribunal |
|Madhya Pradesh VAT Act 2002 ||Added Tax || || || ||Upto Commissioner |
| || ||21.50 ||6.06 ||2012-13 ||(Appeals) Level |
|Goa VAT Act 2005 ||Value ||0.99 ||- ||2009-10 ||Upto Commissioner |
| ||Added Tax || || || ||(Appeals) Level |
|Rajasthan VAT ||Value || || || || |
| || ||205.50 ||64.53 ||2008-09 to 2013-14 || |
|Act 2003 ||Added Tax || || || ||(Appeals) Level |
| || ||222.40 ||151.97 ||2007-08 & 2012-13 ||Sales Tax Tribunal |
|Uttar Pradesh || || || || || |
| ||Value ||18.36 ||12.52 ||2006-07 ||High Court |
|(UP) VAT Act || || || || || |
| ||Added Tax || || || || |
|2008 || || || || ||Upto Commissioner |
| || ||197.88 ||106.06 ||2014-15 & 2015-16 || |
| || || || || ||(Appeals) Level |
| || || || || ||Upto Commissioner |
| || ||6.47 ||- ||2015-16 & 2016-17 || |
| || || || || ||(Appeals) Level |
|Central Excise Act 1944 ||Excise Duty ||1316.08 ||195.05 ||2008-09 to 2015-16 ||Customs Excise and Service Tax Appellate |
| || || || || ||Tribunal |
| || ||918.08 ||244.09 ||2007-08 to 2011-12 ||High Court |
|The State Goods and Services Tax Act 2017 ||Goods and || || || ||Upto Commissioner |
| ||Services Tax ||49.70 ||- ||2017-18 ||(Appeals) Level |
|Finance Act 1994 ||Service Tax ||34.94 ||11.70 ||2008-09 to 2012-13 || |
Upto Commissioner (Appeals) Level
| || || || ||1979-80 to 1982- || |
| || ||244.00 ||244.00 ||83 1995-96 to ||High Court |
| || || || ||1997-98 || |
| || || || || ||Income Tax Appellate |
|Income Tax Act 1961 ||Income Tax ||128.45 ||127.16 ||2009-10 & 2010-11 || |
| || || || || ||Tribunal |
| || ||314.03 ||106.86 ||2012-13 to 2014-15 || |
Commissioner of Income Tax (Appeals)
| || || || || ||Matters have been |
| || ||169.21 ||153.50 || |
1999-20002005-06 to 2008-09
|referred back to the Assessing officer |
Further as per information available with the Company the concerned authority is inappeal against favourable orders received by the Company in respect of the followingmatters:
|Nature of the Statute ||Nature of the Dues ||Amount (Rs. In Lakhs) ||Financial Years to which the amount relates ||Forum where dispute is pending |
|Income Tax Act1961 ||Income Tax ||340.54 ||1969 1974 to 1977 1991-92 to 1994-95 2001-02 to 2003-04 ||High Court |
|Income Tax Act1961 ||Income Tax ||63.21 ||2011-12 ||Income Tax Appellate Tribunal |
|Central Sales Tax Act 1956 ||Sales Tax ||10.40 ||2007-08 ||High Court |
|Central Excise Act 1944 ||Excise Duty ||130.83 ||2009-10 2010-11 & 2012-13 ||Customs Excise and Service Tax Appellate Tribunal |
There are no dues of custom duty and cess which have not been deposited on account ofany dispute.
(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing due towardsbank. The Company did not have any dues in respect of a financial institution or debentureholders or any dues in the nature of loan towards Government.
(ix) According to the information and explanations given by the management the Companyhas not raised any money way of initial public offer / further public offer / debtinstruments and term loans hence reporting under clause (ix) is not applicable to theCompany and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or no material fraud onthe Company by the officers and employees of the Company has been noticed or reportedduring the year.
(xi) According to the information and explanations given by the management themanagerial remuneration has been paid/ provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.
(xii) In our opinion the Company is not a nidhi Company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of share or fully or partly convertible debentures during the year underreview and hence reporting requirements under clause 3(xiv) of the Order are notapplicable to the Company and not commented upon.
(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of the Companies Act 2013.
(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.
| ||For S.R. Batliboi & Co. LLP |
| ||Chartered Accountants |
| ||ICAI Firm Registration Number: 301003E/E300005 |
| ||per Atul Seksaria |
|Place of Signature: New Delhi ||Partner |
|Date: May 30 2019 ||Membership Number: 086370 |
Annexure 2 referred to in paragraph 2 (f) under the heading
"Report on other legal and regulatory requirements" of our report of evendate on the standalone Ind AS financial statements of Godfrey Phillips India Limited
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 internalfinancial controls over financial reporting of Godfrey Phillips India Limited ("theCompany") as of March 31 2019 in conjunction with our audit of the standalone Ind ASfinancial 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 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting with reference to these standalone Ind ASfinancial statements was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the 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 internal financial controls system overfinancial reporting with reference to these standalone Ind AS financial statements.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting with reference to these standalone IndAS financial statements and such internal financial controls over financial reporting wereoperating effectively as at March 31 2019 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.
|For S.R. Batliboi & Co. LLP |
|Chartered Accountants |
|ICAI Firm Registration Number: 301003E/E300005 |
|per Atul Seksaria |
|Membership Number: 086370 |
|Place of Signature: New Delhi |
|Date: May 30 2019 |