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Hindalco Industries Ltd.

BSE: 500440 Sector: Metals & Mining
NSE: HINDALCO ISIN Code: INE038A01020
BSE 00:00 | 24 Apr Hindalco Industries Ltd
NSE 05:30 | 01 Jan Hindalco Industries Ltd
OPEN 110.80
PREVIOUS CLOSE 111.20
VOLUME 934938
52-Week high 221.20
52-Week low 85.05
P/E 40.49
Mkt Cap.(Rs cr) 23,283
Buy Price 104.50
Buy Qty 25.00
Sell Price 105.60
Sell Qty 1000.00
OPEN 110.80
CLOSE 111.20
VOLUME 934938
52-Week high 221.20
52-Week low 85.05
P/E 40.49
Mkt Cap.(Rs cr) 23,283
Buy Price 104.50
Buy Qty 25.00
Sell Price 105.60
Sell Qty 1000.00

Hindalco Industries Ltd. (HINDALCO) - Auditors Report


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Company auditors report

To the Members of Hindalco Industries Limited

Report on the audit of the standalone financial statements

Opinion

1. We have audited the standalone financial statements of Hindalco Industries Limited("the Company") which comprise the balance sheet as at March 31 2019 thestatement of profit and loss the statement of changes in equity and the statement of cashflows for the year then ended and notes to the standalone financial statements includinga summary of significant accounting policies and other explanatory information.

2. 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 accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2019 and total comprehensive loss(comprising of profit and other comprehensive loss) changes in equity and its cash flowsfor the year then ended.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's responsibilities for the audit of thestandalone financial statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Key audit matters

4. Key audit matters are those matters that in our professional judgment were of mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Key audit matters How our audit addressed the key audit matters
A. Measurement of inventory quantities of coal bauxite and work in progress consisting of precious metals
Refer Notes 1D(j) and 11 (d) to the standalone financial statements. Of the Company's Rs. 11394.46 crores of inventory as at March 31 2019 Rs. 1730 crores of inventory comprised of coal bauxite and work in progress consisting of precious metals. Our audit procedures relating to the measurement of inventory quantities of coal bauxite and work in progress of precious metals included the following:
This was determined a key audit matter as the measurement of these inventory quantities lying at the Company's yards smelter and refinery is complex and involves significant judgement and estimate resulting from measuring the surface area dip measurement of materials in tanks/silos etc. • Understanding and evaluating the design and operating effectiveness of controls over physical count and measurement of such inventory;
• Evaluation of competency and capabilities of management's experts;
• Physically observing inventory measurement and count procedures carried out by management using expertsto ensure its appropriateness and completeness; and
The Company uses internal and external expertsas applicable to perform volumetric surveys and assessments basis which the quantity for these inventories is estimated. • Obtaining and inspectinginventory measurement and physical count results for such inventories including assessing and evaluating the results of analysis performed by management in respect of differences between book and physical quantities.
Based on the above procedures performed we did not identify any material exceptions in the measurement of inventory quantities of coal bauxite and work in progress inventories consisting of precious metals.
B. Provisions recognised and contingencies disclosed with regard to certain legal and tax matters
Refer Notes 1D(i) 10 21 25 45 and 46 to the standalone financial statements. Our audit procedures relating to provisions recognised and contingencies disclosed regarding certain legal and tax matters included the following:
As at March 31 2019 the Company has paid deposits under protest recognised provisions and disclosed contingent liabilities towards various legal and tax matters. There are number of legal direct and indirect tax cases against the Company including environmental mining local and state levies income tax holidays availing of input tax credits etc. • Understanding and evaluating the design and operating effectiveness of controls over the recognition measurement presentation and disclosures made in the standalone financial statements in respect of these matters;
This is a key audit matter as evaluation of these matters requires management judgement and estimation interpretation of laws and regulations and application of relevant judicial precedents to determine the probability of outflow of economic resources for recognising provisions and making related disclosures in the standalone financial statements. • Obtaining details of legal and tax matters inspecting the supporting documents to evaluate management's assessment of probability of outcome and the magnitude of potential loss and testing related provisions and disclosures in the standalone financial statements;
• Reviewing orders and other communication from regulatory authorities and management responses thereto;
• Reviewing management expert's legal advice and opinion as applicable obtained by the Company's management for evaluating certain legal matters and evaluating competence and capabilities of the experts; and
• Using auditor's experts for assistance in evaluating certain significant and complex direct and indirect tax matters.
Based on the above procedures performed we did not identify any material exceptions in the provision recognised and contingent liabilities disclosed in the standalone financial statements with regard to such legal and tax matters.
C. Accounting of derivatives and hedging transactions
(Refer Notes1B(P) 9 20 and 52 to the standalone financial statements.) Company's financial performance is significantly impacted by fluctuations in prices of aluminium copper gold silver furnace oil coal foreign exchange rates and interest rates. The Company takes a structured approach to the identification quanti fication and hedging of such risks by using various derivatives (e.g. forwards swaps futures and embedded derivatives) in commodities and / or foreign currencies. These hedges are designated as either cashflow or fair value hedges and in certain cases remains non-designated. Our audit procedures related to accounting of derivative and hedging transactions included the following:
• Understanding and evaluating the design and operating effectiveness of controls over accounting of derivative and hedging transactions;
• Testing qualifying criteria for hedge accounting in accordance with Ind AS 109 including:
Understanding the risk management objectives and strategies for different types of hedging programs;
Evaluating that the hedging relationship consists only of eligible hedging instruments and hedged items;
Using auditor's expert for assistance in verifying hedge effectiveness requirements of Ind AS 109 including the economic relationship between the hedged item and the hedging instrument.
As at March 31 2019 the carrying value of the Company's derivatives included derivative assets amounting to Rs. 935.43 crores and derivative liabilities of Rs. 537.27 crores. • Evaluating competence and capabilities of the auditor's experts;
Derivative and hedge accounting is considered a key audit matter because of its significance to the financial statements the volume nature and types of hedging relationshipsincluding complexity involved in the application of hedge accounting principles in accordance with Ind AS 109 Financial Instruments. • Testing appropriateness of hedge accounting to qualified hedge relationships i.e. cash flow and fair value hedges;
• Testing related presentation and disclosures in the standalone financial statements.
Based on the above procedures performed we did not identify any material exceptions in the amounts presentation and disclosures made in the standalone financial statements relating to accounting of derivatives and hedging transactions.
D. Assessment of indication of impairment and the recoverable amount (RA)of certain Cash Generating Units (CGUs)within the Aluminium segment
Refer Notes 1D(a) 2 4 and 41 to standalone financial statements. External sources of information such as changes in the market and economic environment including increase in the cost of input materials and decline in the Aluminium metal prices required Company's management to assess whether there is any indication of impairment and therefore make an estimate of RA of certain CGUs within Aluminium segment having carrying value of net assets of Rs. 29413 crores as at March 31 2019. Our audit procedures related to assessment of indication of impairment and RA of these CGUs included the following:
• Understanding and evaluating the design and operating effectiveness of controls over identification and assessment of any potential impairment including determining the carrying amount and RA of the CGUs;
• Using auditor's experts for testing appropriateness of the method and model used for determining RA mathematical accuracy of the models' calculations and evaluating reasonableness of key assumptions used in future cash flow projections such as future metal prices foreign exchange rates discount rate input costs and rate of growth over the estimation period;
Based on such indications impairment testing was performed by the Company's management in accordance with the requirements of Ind AS 36 Impairment of Assets. Management has calculated the RA of the CGUs using value in use method. • Evaluating competence and capabilities of the auditor's experts;
• Performing sensitivity analysis over key assumptions to corroborate that RA is within a reasonable range; and
This is a key audit matterbecause of the significant carrying value of these CGUs and the estimation uncertainty in assumptions used for calculating the RA of these CGUs such as future metal prices foreign exchange rates discount rate input costs and rate of growth over the estimation period. • Testing related presentation and disclosures in the standalone financial statements.
Based on the above procedures performed we did not note any material exceptions in the management's assessment of the indication of impairment and conclusion that the RA of these CGUs within the Aluminium segment were not lower than their respective carrying amounts.

Other information

5. The Company's Board of Directors is responsible for the other information. The otherinformation comprise the information included in the annual report but does not includethe financial statements and our auditor's report thereon. The annual report is expectedto be made available to us after the date of this auditor's report.

Our opinion on the standalone financial statements does not cover the other informationand we do 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 in the audit or otherwise appears to bematerially 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 andtake appropriate action as applicable under the relevant laws and regulations.

Responsibilities of management and those charged with governance for the standalonefinancial statements

6. 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 changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

7. 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. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the standalone financial statements

8. 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.

9. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism 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 control relevant to the audit in order todesign 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 hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness 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.

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

11. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

12. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on other legal and regulatory requirements

13. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

14. 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 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 the statement of changes inequity and the statement of cash flows dealt with by this Report are in agreement with thebooks of account;

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act;

(e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct;

(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 B";

(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 in our opinionand 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 financialposition in its standalone financial statements – Refer Notes 45 and 46 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 – Refer Notes 20 and 46 to the standalone financial statements;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company except amount of Rs. 0.07 crore;and

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2019.

For Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009
Sumit Seth
Partner
Membership Number: 105869
Mumbai
May 16 2019

ANNEXURE A TO INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 13 of the Independent Auditor's Report of even date to themembers of Hindalco Industries Limited on the standalone financial statements for the yearended March 31 2019

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of 2 to 3 years which in our isreasonable having regard to the size of the Company and the nature of its assets. Pursuantto the programme a portion of the fixed assets has been physically verified by theManagement during the year and no material discrepancies have been noticed on suchverification.

(c) The title deeds of immovable properties as disclosed in Note 2 on Property Plantand Equipment and Note 3 on Investment Property to the standalone financial statementsare held in the name of the Company except for the following:

i. in respect of freehold land (Birla Copper and Muri unit) having gross block of Rs.0.32 crore and building (Birla copper unit Delhi and Mumbai branch) having gross block ofRs. 11.43 crores the title deeds of which are held in the name of erstwhile companieswhich have subsequently been amalgamated with the Company;

ii. in respect of freehold land (Mahan and Kathotia unit) having gross block of Rs.30.87crores the title deeds of which are yet to be transferred in the name of theCompany; and

iii. in respect of freehold land (Birla copper unit) and building (Birla copper unitMumbai and Delhi branch) having gross block of Rs. 0.50 crore and Rs. 15.73 croresrespectively the title deeds of which are presently not readily available with theCompany.

ii. The physical verification of inventory excluding stocks with third parties havebeen conducted at reasonable intervals by the Management during the year. In respect ofinventory lying with third parties these have substantially been confirmed by them. Thediscrepancies noticed on physical verification of inventory as compared to book recordswere not material.

iii. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clauses3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act2013in respect of the loans and investments made and guarantees and security provided byit.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed thereunder to the extentnotified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion thatprimafacie the prescribed accounts and records have been made and maintained. We havenot however made a detailed examination of the records with a view to determine whetherthey are accurate or complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of provident fund employees' state insurance salestax income tax service tax duty of customs duty of excise value added tax cessgoods and service taxand other material statutory dues as applicable with theappropriate authorities. Also refer Note 31 to the standalone financial statementsregarding management's assessment on certain matters relating to provident fund.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income tax which have not been deposited onaccount of any dispute. The particulars of dues of sales tax service tax duty ofcustoms duty of excise value added tax and goods and service tax as at March 31 2019which have not been deposited on account of a dispute are as follows:

ANNEXURE A TO INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 13 of the Independent Auditor's Report of even date to themembers of Hindalco Industries Limited on the standalone financial statements for the yearended March 31 2019

Name of the Statute Nature of Dues Rs. in crores* Period to which the amount relates Forum where the disputes are pending
Central Sales Tax Act and Local Sales Tax (including VAT) Act Sales tax 26.77 1995-2009 2014-2016 Assistant Commissioner/Commissioner/ Deputy Commissioner/ Revisionary Authorities Level/Joint Commissioner/ Additional Commissioner (A)
0.46 2005-2006 2009-2011 Tribunal
32.51 1986-19871989-1991 1999-2007 2012-2013 High Court
The Central Excise Act 1944 Excise duty 7.13 2000-2004 2006-2009 2012-2018 Assistant Commissioner/ Commissioner/ Revisionary Authorities Level
723.41 2001-2018 Customs Excise and Service Tax Appellate Tribunal (CESTAT)
The Customs Act 1962 Custom Duty 0.05 2004-2005 Commissioner (Appeal)
23.36 2009-2014 2016-2017 Customs Excise and Service Tax Appellate Tribunal (CESTAT)
The Service Tax under the Finance Act 1994 Service Tax 4.24 2001-2002 2007-2017 Assistant Commissioner/ Commissioner/ Revisionary Authorities Level
332.79 2004-2018 Customs Excise and Service Tax Appellate Tribunal (CESTAT)
The Central Goods and Service Tax Act 2017 Goods and service tax 27.12 2017-2018 High Court

* Exclude matters in respect of which favourable order has been received at variousappellate authorities.

viii. According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to any banks financial institutionsor dues to debenture holders as at thebalance sheet date. The Company does not have any loans or borrowings from Government asat the balance sheet date therefore the provisions of Clause 3(viii) of the Order to theextent are not applicable to the Company.

ix. In our opinion and according to the information and explanations given to us themoneys raised by way of term loans have been applied for the purposes for which they wereobtained. The Company has not raised any moneys during the year by way of initial publicoffer and further public offer (including debt instruments).

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are notapplicable to it the provisions of Clause 3(xii) of the Order are not applicable to theCompany.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the standalone financial statements as required underIndian Accounting Standard (Ind AS) 24 Related Party Disclosures specified under Section133 of the Act.

xiv. The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.Accordingly the provisions of Clause 3(xiv) of the Order are not applicable to theCompany.

xv. The Company has not entered into any non cash transactions with its directors orpersons connected with them to which Section 192 of the Act applies. Accordingly theprovisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009
Sumit Seth
Partner
Membership Number: 105869
Mumbai
May 16 2019

ANNEXURE B TO INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 14 (f) of the Independent Auditor's Report of even date to themembers of Hindalco Industries Limited on the standalone financial statements for the yearended March 31 2019

Report on the internal financial controls with reference to standalone financialstatements under clause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to standalonefinancial statements of Hindalco Industries Limited ("the Company") as of March31 2019 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.

Management's responsibility for internal financial controls

2. 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 (ICAI). These responsibilitiesinclude the designimplementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 Act.

Auditor's responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the"Guidance Note") and the Standards onAuditing deemed to be prescribed under section 143(10) of the Act to the extent applicableto an audit of internal financial controls both applicable to an audit of internalfinancial controls and both issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tostandalone financial statements was established and maintained and if such controlsoperated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofinternal financial controls with reference to standalone financial statements assessingthe risk that a material weakness exists and testing and evaluating the design andoperating 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 standalone financial statements whether due to fraud orerror.

5. 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 standalone financial statements.

Meaning of internal financial controls with reference to standalone financialstatements

6. A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. Acompany's internalfinancial controls with reference to standalone financial statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetailaccurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.

Inherent limitations of internal financial controls with reference to standalonefinancial statements

7. Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements 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 Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009
Sumit Seth
Partner
Membership Number: 105869
Mumbai
May 16 2019