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Tata Chemicals Ltd.

BSE: 500770 Sector: Industrials
NSE: TATACHEM ISIN Code: INE092A01019
BSE 00:00 | 24 Apr 2020 Tata Chemicals Ltd
NSE 05:30 | 01 Jan 1970 Tata Chemicals Ltd

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OPEN 262.00
PREVIOUS CLOSE 263.40
VOLUME 97087
52-Week high 339.95
52-Week low 197.40
P/E 6.91
Mkt Cap.(Rs cr) 6,879
Buy Price 270.00
Buy Qty 10.00
Sell Price 270.00
Sell Qty 1.00
OPEN 262.00
CLOSE 263.40
VOLUME 97087
52-Week high 339.95
52-Week low 197.40
P/E 6.91
Mkt Cap.(Rs cr) 6,879
Buy Price 270.00
Buy Qty 10.00
Sell Price 270.00
Sell Qty 1.00

Tata Chemicals Ltd. (TATACHEM) - Auditors Report


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Company auditors report

To the Members of Tata Chemicals Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Tata Chemicals Limited("the Company") which comprise the standalone balance sheet as at March 312019 and the standalone statement of profit and loss (including other comprehensiveincome)standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information (hereinreferred 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 ("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 March 31 2019 and 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 in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the

Auditor's Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued 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 the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for 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.

Description of Key Audit Matter

Revenue recognition (refer notes 2.14 and 24 to the Standalone Financial Statements)

The Key Audit Matter How the matter was addressed in our audit
Revenue is measured net of discounts rebates and incentives earned by customers on the Company's sales. Our audit procedures included:
Due to the Company's presence across different marketing regions within the country and the competitive business environment the estimation of the various types of discounts rebates and incentives to be recognized based on sales made during the year is material and considered to be judgmental. Assessing the appropriateness of the revenue recognition accounting policies including those relating to discounts rebates and incentives by comparing with applicable accounting standards.
Therefore there is a risk of revenue being misstated as a result of faulty estimations over discounts incentives and rebates. Testing the design implementation and operating effectiveness of the Company's general IT controls over the Company's systems and manual controls which govern recording of revenue and discounts rebates and incentives in the general ledger accounting system.
Revenue is recognized when the control of the underlying products has been transferred to the customer. There is a risk of revenue being overstated due to fraud resulting from the pressure on management to achieve performance targets at the reporting period end. Performing substantive testing (including year- end cut- off testing) by selecting samples of revenue transactions recorded during the year (and before and after the financial year end) by verifying the underlying documents which included sales invoices/contracts and shipping documents.
The Key Audit Matter How the matter was addressed in our audit
Comparing the historical discounts rebates and incentives to current payment trends. We also considered the historical accuracy of the Company's estimates in previous years. Assessing manual journals posted to revenue to identify unusual items.
Considered the adequacy of the Company's disclosures in respect of revenue.

Impairment evaluation of Investments in subsidiaries and joint ventures (refer notes2.12 and 7 to the Standalone Financial Statements)

The Key Audit Matter How the matter was addressed in our audit
The carrying amount of the investments in subsidiaries and joint ventures (held at cost less impairment) represents 30% of the Company's total assets. Our audit procedures included:
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 discounted cash flows which involve significant estimates and judgment due to the inherent uncertainty involved in forecasting and discounting 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. Comparing the carrying amount of investments with the relevant subsidiaries' and joint ventures' (draft) balance sheets 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/joint ventures have historically been profit-making.
For the investments where the carrying amount exceeded the net assets value comparing the carrying amount of the investment with the expected value of the business based on a suitable multiple of the subsidiaries' and joint ventures' earnings or discounted cash flow analysis.
Testing and challenging the assumptions used in the discounted cash flow analysis based on our knowledge of the Company and the markets in which the subsidiaries and joint ventures operate with the assistance of our valuations team.
Considering the adequacy of disclosures in respect of the investments in subsidiaries and joint ventures.

Litigations and claims (refer notes 2.3.4 18 and 41 to the Standalone FinancialStatements)

The Key Audit Matter How the matter was addressed in our audit
The Company operates in various States within India exposing it to a variety of different Central and State laws regulations and interpretations thereof. In this regulatory environment there is an inherent risk of litigations and claims. Our procedures included:
Consequently provisions and contingent liability disclosures may arise from direct and indirect tax proceedings legal proceedings including regulatory and other government/department proceedings as well as investigations by authorities and commercial claims. Reviewing the outstanding litigations against the Company for consistency with the previous years. Enquire and obtain explanations for movement during the year. Discussing the status of significant known actual and potential litigations with the Company's in-house Legal Counsel and other senior management personnel who have knowledge of these matters and assessing their responses.
At March 31 2019 the Company's contingent liabilities for legal matters were र _570.40 crores (refer note 41.1 to the standalone financial statements) and provisions for legal matters aggregated र _ 139.55 crores (refer note 18 to the standalone financial statements). Reading the latest correspondence between the Company and the various tax/legal authorities and review of correspondence with / legal opinions obtained by the management from external legal advisors where applicable for significant matters and considering the same in evaluating the appropriateness of the Company's provisions or disclosures on such matters.
Management applies significant judgment in estimating the likelihood of the future outcome in each case when considering whether and how much to provide or in determining the required disclosure for the potential exposure of each matter. This is due to the highly complex nature and magnitude of the legal matters involved along with the fact that resolution of tax and legal proceedings may span over multiple years and may involve protracted negotiation or litigation. These estimates could change substantially over time as new facts emerge as each legal case progresses.
Examining the Company's legal expenses and reading the minutes of the board meetings in order to ensure that all cases have been identified.
Given the inherent complexity and magnitude of potential exposures across the Company and the judgment necessary to estimate the amount of provisions required or to determine required disclosures this is a key audit matter. With respect to tax matters involving our tax specialists and discussing with the Company's tax officers their views and strategies on significant cases as well as the related technical grounds relating to their conclusions based on applicable tax laws.
Assessing the decisions and rationale for provisions held or for decisions not to record provisions or make disclosures. For those matters where management concluded that no provisions should be recorded considered the adequacy and completeness of the Company's disclosures. materially misstated. If based on the work we have performed we conclude that there is a material misstatement of this other information we are required to report that fact. We have nothing to report in this regard.
Information Other than the Standalone Financial Statements and Auditors' Report Thereon
The Company's management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company's annual report but does not include the financial statements and our auditors' report thereon. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
Management's Responsibility for the Standalone Financial Statements
In connection with our audit of the standalone financial statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be The Company's management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs profit and other comprehensive income changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility

also includes maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding of the assets of the Company and for preventing anddetecting 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 to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

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

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

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also: Identify and assess therisks of material misstatement of the standalone financial statements whether due tofraud or error design and perform audit procedures responsive to those risks and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.

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 with reference to financial statements in place andthe operating effectiveness of such 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 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 standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent 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 determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

(A) As required by Section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books. c) The standalone balance sheet the standalone statement ofprofit and loss (including other comprehensive income) the standalone statement ofchanges in equity and the standalone statement of cash flows dealt with by this Report arein agreement with the books of account. d) In our opinion the aforesaid standalonefinancial statements comply with the Ind AS specified under Section 133 of the Act. e) Onthe basis of the written representations received from the directors as on April 1 2019taken on record by the Board of Directors none of the directors is disqualified as onMarch 31 2019 from being appointed as a director in terms of Section 164(2) of the Act.f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer 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. TheCompany has disclosed the impact of pending litigations as at March 31 2019 on itsfinancial position in its standalone financial statements - Refer Note 41 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 Note 17 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.

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 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2019.

(C) With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act: In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) ofthe Act which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
(Firm's Registration No. 101248W/W-100022)
Vijay Mathur
Place: Mumbai Partner
Date: May 3 2019 (Membership No. 046476)

Annexure A to the Independent Auditors' Report – March 31 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 March 312019 we report the following: (i) (a) The Company has maintained proper records showingfull particulars including quantitative details and situation of property plant andequipment and investment properties.

(b) The Company has a programme of physical verification of its property plant andequipment 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 thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. In accordance with the policy the Company hasphysically verified certain property plant and equipment and investment properties duringthe year and we are informed that the discrepancies were not material and have beenproperly dealt with in the books of account. (c) According to the information andexplanations given to us and on the basis of our examination of the records of theCompany the title deeds of immovable properties of land and buildings as disclosed inNote 4 and Note 5 to the standalone financial statements are held in the name of theCompany.

(ii) The inventory except for goods-in-transit and stocks lying with third partieshas been physically verified by the management during the year. In our opinion thefrequency of such verification is reasonable. In respect of stocks lying with thirdparties at the year-end written confirmations have been obtained. The discrepanciesnoticed on verification between the physical stocks and the book records were not materialand have been properly dealt with in the 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 explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(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 account maintained by the Company pursuantto the rules prescribed by the Central Government for the maintenance of cost recordsunder Section 148(1) of the Act for cement organic and inorganic chemicals and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

(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 Provident fund Profession taxIncome-tax Duty of customs Employees' State Insurance Goods and Service tax Cess andother material statutory dues have been regularly deposited during the year with theappropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Profession tax Employees' State InsuranceIncome-tax Sales-tax Service tax Duty of customs Duty of excise Goods and Servicetax Value added tax Cess and other material statutory dues were in arrears as at March31 2019 for a period of more than six months from the date they became payable. Alsorefer note 41.1(c) to the standalone financial statements.

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

Sr. No. Name of Act Nature of Dues Amount * (In crores) Period to which the amount relates Forum where Dispute is pending
1 Customs Act 1962 Custom Duty 23.53 2012-13 2013-14 Tribunal
0.35 1987-88 1992-93 2001-02 Appellate Authority upto
2011-12 2012-13 Commissioner's level
2 Central Excise Act 1944 Excise Duty 0.28 1974-1980 1978-79 Supreme Court
1982-83 1981-85
50.31 2005-06 High Court
28.65 1985-1986 1986-1987 Tribunal
1987-88 2006-07 to
2010-11
0.71 2004-05 Appellate Authority upto
Commissioner's level
3 Central Sales Tax 1956 and Sales Tax Act of Various states Sales Tax (Central and State) and Value Added Tax 32.61 2006-07 2007-08 2008-09 2015-16 High Court
0.95 1999-00 2004-05 2005-06 Tribunal
2006-07 2007-08
12.82 1991-92 to 1994-95 Appellate Authority upto
1997-98 1998-99 1999-00 Commissioner's level
2002-06 2008-16
4 The West Bengal tax on entry of Goods into Local Areas Act 2012 Entry Tax 103.94 2012-13 to 2015-16 High Court
5 The Finance Act 1994 (Service Tax) Service Tax 11.67 2010-11 2011-12 Tribunal
6 Income Tax Act 1961 Income tax 8.22 AY 2014-15 Tribunal (ITAT)

* net of amounts paid under protest.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to banks and dues todebenture holders. The Company does not have any outstanding dues to financialinstitutions and Government.

(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) According to the information and explanations given to us by the management wereport that no fraud by the Company or on the Company by its officers and employees hasbeen noticed or reported during the year.

(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. Accordingly paragraph 3 (xii) of the Order is notapplicable 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 required byapplicable 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 the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into 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)
Vijay Mathur
Place: Mumbai Partner
Date: May 3 2019 (Membership No. 046476)

Annexure B to the Independent Auditors' report on the standalone financial statementsof Tata Chemicals Limited for the year ended March 31 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

(Referred to in paragraph 1A (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 Tata Chemicals Limited ("the Company") as of March 31 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 March 31 2019 based on the internal financialcontrols with reference to financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered 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 financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").

Auditors' Responsibility

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 and the Standards on Auditingprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to financial statements. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to standalone financial statements were established and maintainedand whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to standalonefinancial statements included obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud 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 withreference to standalone financial statements

Meaning of Internal Financial controls with Reference to Financial Statements

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 controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial controls with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
(Firm's Registration No. 101248W/W-100022)
Vijay Mathur
Place: Mumbai Partner
Date: May 3 2019 (Membership No. 046476)


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