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Rallis India Ltd.

BSE: 500355 Sector: Agri and agri inputs
NSE: RALLIS ISIN Code: INE613A01020
BSE 00:00 | 24 Apr Rallis India Ltd
NSE 05:30 | 01 Jan Rallis India Ltd
OPEN 202.25
PREVIOUS CLOSE 204.85
VOLUME 31958
52-Week high 255.60
52-Week low 127.10
P/E 28.65
Mkt Cap.(Rs cr) 4,073
Buy Price 209.40
Buy Qty 100.00
Sell Price 211.00
Sell Qty 100.00
OPEN 202.25
CLOSE 204.85
VOLUME 31958
52-Week high 255.60
52-Week low 127.10
P/E 28.65
Mkt Cap.(Rs cr) 4,073
Buy Price 209.40
Buy Qty 100.00
Sell Price 211.00
Sell Qty 100.00

Rallis India Ltd. (RALLIS) - Auditors Report


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Company auditors report

To

The Members of

Rallis India Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Rallis IndiaLimited ("the Company") which comprise the standalone balance sheet as at 31March 2019 the standalone statement of profit and loss (including other comprehensiveincome) the standalone statement of changes in equity and the standalone statement ofcash flows for the year then ended and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "standalone financial statements").

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 true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 its profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under Section 143 (10) of the Act. Ourresponsibilities under those SAs are further described in the

Auditors' Responsibility for the Audit of the Standalone Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and 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 opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements 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.

Revenue recognition

The Key Audit Matter How the matter was addressed in our audit
Revenue is measured based on transaction price which is the consideration adjusted for rebates discounts incentives (scheme allowances) and estimated sales returns. As disclosed in Note 3.14 to the standalone financial statements revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods. Our audit procedures included following:
- Understanding the process followed by the management for the purpose of identifying and determining the amount of provision of sales returns and accrual for rebates and schemes;
- Checking of completeness and accuracy of the data used by the management for the purpose of calculation of the provision for sales returns and checking of its arithmetical accuracy;
Sales return estimation
As disclosed in Note 3.14 to the standalone financial statements revenue is recognised net of sales returns. - Comparison between the estimate of the provision for sales returns created in the past with subsequent actual sales returns and analysis of the nature of any deviations to corroborate the effectiveness of the management estimation process;
Estimation of sales returns involves significant judgement and estimates due to its dependency on various internal and external factors. - Considering the appropriateness of the Company's accounting policies regarding revenue recognition as they relate to accounting for rebates discounts and scheme allowances;
Estimation of sales return amount together with the level of judgement involved makes its accounting treatment a significant matter for our audit. - Testing the Company's process and controls over the calculation of rebates discounts and scheme allowance;

 

The Key Audit Matter How the matter was addressed in our audit
Accrual for rebates and schemes
Revenue is recognised net of rebates discounts incentives (scheme allowances) and estimated sales returns owed to the customers based on the arrangement with customers. - Selecting a samples of revenue transactions and scheme circular to re-check that rebates discounts and scheme allowance were calculated in accordance with the eligibility criteria mentioned in the scheme circular;
The recognition and measurement of rebates discounts and schemes allowances including establishing an appropriate accrual at year end involves significant judgement and estimates particularly the expected level of claims of each of the customers. - Selecting a sample of claims submitted by customers along with claim form and verifying it with the accrual made in the books of account; and
- Considering the assumptions and judgements used by the Company in calculating rebates discounts and schemes allowances including the level of expected claims by reviewing historical trends of claims.
The value of rebates discounts and schemes allowances together with the level of judgement involved make its accounting treatment a significant matter for our audit.

Investment in subsidiaries

The Key Audit Matter How the matter was addressed in our audit
Our audit procedures included the following:
The carrying amount of the investments in subsidiaries held at cost less impairment represents 16% of the Company's total assets. - Comparing the carrying amount of investments with the relevant subsidiary balance sheet to identify whether their net assets being an approximation of their minimum recoverable amount were in excess of their carrying amount and assessing whether those subsidiaries have historically been profit-making;
Recoverability of investments in subsidiaries un- dertaking
We do not consider the valuation of these investments to be at a high risk of significant misstatement or to be subject to a significant level of judgment except for the investment valuations based on projected cash flows which involve significant estimates and judgment due to the inherent uncertainty involved in forecasting future cash flows. Further due to their materiality in the context of total assets of the Company this is considered to be significant to our overall audit strategy and planning. - For the investments where the carrying amount exceeded the net asset value comparing the carrying amount of the investment with the expected value of the business based on a suitable multiple of the subsidiaries earnings or discounted cash flow analysis;
- Testing the assumptions and understanding the cash flows based on our knowledge of the Company and the markets in which the subsidiaries operate; and
- Considering the adequacy of disclosures in the standalone financial statements relating to the valuation of investments in subsidiaries.

Other Information

The Company's Management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company's annualreport but does not include the financial statements and our auditors' report thereon.

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 and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Standalone Financial Statements

The Company's Management and Board of Directors is responsible for the matters statedin Section 134 (5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the state of affairs profit/lossand other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) prescribed under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

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

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

Auditors' Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditors' 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. Misstaments can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these standalone financial statements.

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

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

• Obtain an understanding of internal 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 Companyhas adequate internal financial controls system in place and the operating effectivenessof 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 tomodify our opinion. Our conclusions are based on the audit evidence obtained up tothe date of our auditor's report. However future events or conditions may cause theCompany to cease to continue 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.

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

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

From the matters communicated with those charged with governance we 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. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 (‘the Order') issuedby the Central Government of India in terms of Section 143 (11) of the Act we give in"Annexure A" a statement on the matters specified in the paragraphs 3 and 4 ofthe Order to the extent applicable.

(A) 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 standalone balance sheet the standalone statement of profit and loss(including other comprehensive income) the standalone statement of changes in equity andthe standalone 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 theIndian Accounting Standards (Ind AS) prescribed under Section 133 of the Act;

(e) on the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors aredisqualified as on 31 March 2019 from being appointed as a director in terms of Section164 (2) of the Act; and

(f) with respect to the adequacy of the internal financial controls with reference tothe standalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' 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 Note 40 to the standalonefinancial statements;

ii. the Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2019; and

iv. the disclosures in the standalone financial statements regarding holdings as wellas dealings in Specified Bank Notes during the period from

8 November 2016 to 30 December 2016 have not been made in these standalone financialstatements since they do not pertain to the financial year ended 31 March 2019.

(C) With respect to the matter to be included in the Auditors' Report under Section197(16): In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act.

The remuneration paid to any director is not in excess of the limit laid down underSection 197 of the Act. The Ministry of Corporate Affairs has not prescribed other detailsunder Section 197(16) which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Aniruddha Godbole
Mumbai Partner
25 April 2019 Membership No: 105149

Annexure A to the Independent Auditors' Report – 31 March 2019

With reference to the Annexure A referred to in the Independent Auditors' Report to themembers of the Company on the standalone financial statements for the year ended 31 March2019 we report the following:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment and investmentproperties.

(b) The Company has a regular programme of physical verification of its property plantand equipment and investment properties by which the property plant and equipment andinvestment properties are verified by the management according to a phased programmedesigned to cover all the items over a period of three years.

In our opinion this periodicity of physical verification is reasonable having regardto the size of the Company and the nature of its assets. In accordance with the policythe Company has physically verified certain property plant and equipment during the yearand we are informed that no material discrepancies were noticed on such verification andthe same have been dealt with in books of accounts.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties (otherthan leasehold land) as disclosed in Note 4 and Note 5 to the standalone financialstatements are held in the name of the Company and in respect of leasehold lands we haveverified the lease agreements duly registered with the appropriate authorities asdisclosed in Note 4 and Note 5 to the standalone financial statements except thefollowing:

Land / Building No of cases Leasehold / Freehold Gross block (र in lakhs) Net block (र in lakhs) Remarks
Building 12 Freehold 2.83 0.82 The agreements were not available for verification.
Building 2 Freehold 57.35 24.68 The Company has filed a declaration suit with regards to the title and is awaiting a decree. The certificate for shares held in the Cooperative Housing Society have been verified.
Land 1 Freehold 226.04 226.04 The said land is in the name of Rallis Hybrid Seeds Limited an erstwhile company that was merged with the Company under Section 391 to 394 of the Companies Act 1956 in terms of the approval of the Honorable High Court(s)
Land 1 Leasehold 1 - The agreement was not available for verification.
Land 1 Leasehold 1623.05 1451.28 The plot has been allotted and is in the possession of the Company. The lease deeds has not yet been executed by lessors.

(ii) The inventory except for goods-in-transit and stocks lying with thirdparties has been physically verified by the management during the year.

In our opinion the frequency of such verification is reasonable. In respect of stockslying with third parties at the year-end written confirmations have been obtained.The discrepancies noticed on verification between the physical stocks and the book recordswere not material and have been dealt with in books of account.

(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 theCompanies Act 2013 (‘the Act').

Accordingly paragraphs 3 (iii) (a) (b) and (c) of the Order are not applicable to theCompany.

(iv) In our opinion and according to the information and explanation given to us theCompany has not granted any loans or provided any guarantees or security to the partiescovered under Section 185 of the Act. The Company has complied with the provisions ofSection 186 of the Act in respect of the investments made.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia and the provisions of Sections 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. Accordingly paragraph 3 (v) of the Order is notapplicable to the Company.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the rules prescribed by the Central Government for the maintenance of cost recordsunder Section 148(1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Income-tax Duty of customsProvident fund Employees' State Insurance Goods and Services tax Cess and othermaterial statutory dues have been regularly deposited during the year with the appropriateauthorities.

According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Profession tax have generallybeen regularly deposited during the year with the appropriate authorities though therehave been slight delays in few cases. As explained to us the Company did not have anydues on account of wealth tax.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees' State Insurance Profession taxIncome-tax Duty of customs Goods and Services tax Cess and other material statutorydues were in arrears as at 31 March 2019 for a period of more than six months from thedate they became payable. Also refer note 40 (c) to the standalone financial statements.

(b) According to the information and explanations given to us there are no dues ofIncome-tax Duty of customs Duty of excise Sales tax Service tax Value added tax andGoods and Services tax as at 31 March 2019 which have not been deposited with theappropriate authorities on account of any dispute except as stated below:

(र in lakhs)
Name of Act Nature of Dues Amount Demanded Amount not Deposited Under Dispute Period to which amount relates Forum where dispute is pending
Sales Tax and Value Added Tax Tax Penalty and Interest 606.53 519.66 2000-01 2001-02 2005-06 to 2010-11 2012-13 to 2014-15 Joint Commissioner (Appeals)
246.43 237.85 1990-91 2000-01 2001-02 2006-07 to 2010-11 2013-14 Additional Commissioner
513.23 263.51 1983-84 1992-93 1994-95 1996-97 to 2001-02 2003-04 to 2004-05 2006-07 to 2013-14 2014-15 Deputy Commissioner
95.46 58.89 1993-94 1998-99 1999-00 2001-02 2003-04 2004-05 2007-08 to 2009-10 2014-15 Assistant Commissioner
180.42 118.14 1992-93 1995-96 to 1999-2000 2001-02 2003-04 2009-10 2011-12 2012-13 2015-16 Tribunal
74.42 30.92 1990-91 1996-97 1997-98 2001-02 2002-03 2012-13 Commercial Tax Officer
The Central Excise Act 1944 Tax Penalty and Interest 62.80 62.80 1999-2001 Joint Commissioner (Appeals)
87.83 62.69 1999-00 2001-02 2011-14 2014-15 2016-17 2017-18 Deputy Commissioner
665.31 519.55 1986-87 1996-97 to 2000-01 2001-02 2002-2004 2016-17 Tribunal
The Finance Act 1994 Tax Penalty and Interest 6.74 6.74 2006-08 2010-11 Assistant Commissioner
138.39 138.39 2007-13 to 2010- 2014 2014-16 2016-17 Superintendent of Excise and Customs
10.23 10.23 2005-06 to 2009-10 Joint Commissioner
42.35 21.18 2009-10 Tribunal
Customs Act 1962 Tax 144.10 144.10 1999-00 Tribunal
Income Tax Act 1961 Income Tax 46.91 46.91 2016-17 Commissioner of Income Tax (Appeal)

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans to banks and government. The Companydid not have any outstanding dues to financial institutions and debenture holders duringthe year.

(ix) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments) and has notobtained any term loans during the year. Accordingly paragraph 3 (ix) of the Order is notapplicable to the Company.

(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) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company and the Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3 (xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as requiredby applicable Ind AS.

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

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

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No : 101248W/W-100022
Aniruddha Godbole
Mumbai Partner
25 April 2019 Membership No: 105149

Annexure B to the

Independent Auditors' Report – 31 March 2019

Report on the Internal Financial Controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 ("the Act")

(Referred to in paragraph (A)(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to standalone financialstatements of Rallis India Limited ("the Company") as of 31 March 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as at 31 March 2019 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal controls with referenceto standalone financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note.

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with respect to standalone financial statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing prescribedunder Section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls with reference to standalone financial statements.

Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls with reference to standalone financial statements wereestablished and maintained and whether such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with respect to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with respect tostandalone financial statements included obtaining an understanding of internal financialcontrols with respect to standalone financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors' judgement including the assessment of the risks of materialmisstatement of the standalone financial statements whether due to fraud or error.

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

Meaning of Internal Financial Controls with reference to Standalone FinancialStatements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles.

A company's internal financial controls with reference to financial statements includethose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to StandaloneFinancial Statements

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 financial controls with referenceto standalone financial statements to future periods are subject to the risk that theinternal financial control with reference to standalone financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No : 101248W/W-100022
Aniruddha Godbole
Mumbai Partner
25 April 2019 Membership No: 105149