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63 Moons Technologies Ltd.

BSE: 526881 Sector: IT
NSE: 63MOONS ISIN Code: INE111B01023
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OPEN 89.70
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VOLUME 37537
52-Week high 112.40
52-Week low 58.95
P/E 75.54
Mkt Cap.(Rs cr) 421
Buy Price 90.80
Buy Qty 2.00
Sell Price 91.40
Sell Qty 413.00
OPEN 89.70
CLOSE 88.95
VOLUME 37537
52-Week high 112.40
52-Week low 58.95
P/E 75.54
Mkt Cap.(Rs cr) 421
Buy Price 90.80
Buy Qty 2.00
Sell Price 91.40
Sell Qty 413.00

63 Moons Technologies Ltd. (63MOONS) - Auditors Report

Company auditors report

To the members of 63 moons technologies limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Qualified Opinion

We have audited the accompanying Standalone Financial Statements of 63 moonstechnologies limited (hereinafter referred as "the Company") which comprisethe Balance Sheet as at March 31 2020 the Statement of Profit and Loss (including othercomprehensive income) the Statement of Cash Flows and the Statement of Changes In Equityfor the year then ended and notes to the Standalone Financial Statements including asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion section of our report the aforesaid Standalone Financial Statementsgive the information required by the Companies Act 2013 (hereinafter referred as"the Act") in the manner so required and give a true and fair view in conformitywith the Indian Accounting Standards prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended (hereinafter referred as"Ind AS") and other accounting principles generally accepted in India of thestate of affairs (financial position) of the Company as at March 31 2020 and its loss(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.

Basis for Qualified Opinion

Note Number 47 to 49 and 55 to 57 to the Standalone Financial Statements forms thebasis for our Qualified opinion which are as follows:

A. The Company has investment of Rs. 20000 Lakhs (face value) each in securednon-convertible debentures issued by IL&FS Transportation Networks Ltd (ITNL)(subsidiary of Infrastructure Leasing & Finance Ltd – ILFS) and Dewan HousingFinance Corporation Ltd (DHFL). These companies i.e. ITNL and DHFL have defaulted inrepayment of interest and various rating agencies have revised their credit ratings to thelowest category ‘D' i.e. default. Resolution process has been initiated underCompanies Act for ITNL and Corporate Insolvency Resolution Process (CIRP) under IBC Act incase of DHFL in addition to various investigations and legal proceedings. The Company'smanagement has also taken various measures including filing legal cases against specifiedparties. (Refer note 47 and 48).

In addition the Company has investment of Rs. 30000 Lakhs (face value) in PerpetualAdditional Tier I bonds ("AT I bonds") issued by Yes Bank Limited ("YesBank"). On March 14 2020 Yes Bank through its administrator informed the stockexchanges that these AT I bonds need to be fully written down permanently and standextinguished with immediate effect. Trustee and the Company have taken legal recourse tothis action of the Yes bank. (Refer note 49).

The Company's management and those charged with Governance have represented to us thatsince these matters are pending at various stages of adjudication and considering theuncertainties management is unable to quantify the impact on these investments.

B. As stated by the Management of the Company in Note 55 to the Standalone FinancialStatements Civil Suits have been filed against the Company in relation to event occurredon National Spot Exchange Limited trading platform. These matters are pending at variousstages of adjudication. As stated in the said note the management of the Company does notforesee that the parties who have filed Civil Suits would be able to sustain any claimagainst the Company. In addition as stated by the management in note 55 56 and 57 to theStandalone Financial Statements there are First Information Reports ("FIR") /complaints/ letters / orders / notices /reports registered / received against variousparties including the Company from/ with the Economic Offences Wing of the Mumbai Police(EOW) Central Bureau of Investigation (CBI) Home Department - Government of Maharashtraunder MPID Act the Directorate of Enforcement and the Serious Fraud Investigation Office(SFIO). Above matters are pending at various stages of adjudication/investigation. (ReferNote 55 56 and 57). In this regard the Management and those charged with Governance haverepresented to us that other than as stated in the said notes to the Standalone FinancialStatements there are no claims litigations potential settlements involving the Companydirectly or indirectly which require adjustments to / disclosures in the StandaloneFinancial Statements and that the ability of the Company to carry out its day-to-dayoperations / activities is not seriously affected due to any such FIR / complaints /letters / orders / notices / reports as aforesaid.

Accordingly in view of above representations regarding legal matters at various stagesof adjudication and ongoing investigations / matters the outcome of which is not knownand is uncertain at this stage we are unable to comment on the consequential impact inrespect of the same on the results for the year ended March 31 2020.

We conducted our audit in accordance with the Standards on Auditing (hereinafterreferred as "SAs") specified under section 143(10) of the Act. Ourresponsibilities under those SAs are further described in the Auditor's responsibilitiesfor the audit of the Standalone Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the Standalone Financial Statements under the provisions of the Act andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our Qualified audit opinion.

EMPHASIS OF MATTERS

A. We draw attention to Note 45 to the Standalone Financial Statements regardingutilisation of unexpired MAT credit entitlement by the Company. The Company has a totalMAT credit entitlement of Rs. 8950.29 Lakhs as at March 31 2020. Based on theprojections made by the Company's Management regarding income-tax liability of theCompany Management is of the view that the Company will be able to utilise the unexpiredMAT credit entitlement in eligible projected years.

B. We draw attention to Note 41 to the Standalone Financial Statements which describesthe economic and social consequences the entity is facing as a result of outbreak ofCovid-19 pandemic which is impacting operations of the Company personnel available forwork etc.

Our opinion is not Qualified in respect these matters of emphasis.

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 taken as a whole in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the key audit matters as describedbelow:

A. Determination of fair value of carrying amount of investments

B. Accounting treatment for contracts with customer

C. Contingent liabilities

A. Determination of fair value of carrying amount of investments

Description of key audit matter

The Company has investments net of provision of Rs. 101625.73 Lakhs as at March 312020 consisting of Investments in the equity instruments of subsidiaries third partybonds mutual funds other equity instruments etc. and are valued as per Ind AS 109"Financial instruments". By their nature these are subjected to various factorsrelated to respective investee entities including but not limited to economic factorsbusiness dynamics financial performance etc and impact a fair valuation of theseinvestments. Accordingly this necessitates a close monitoring by the management of thesesituations and judgement based on appropriate evaluation criteria to arrive at a fairvalue of carrying amounts of these assets as at balance sheet date. Against thisbackground this matter was of significance in the context of our audit.

Description of Auditor response

We have carried out a comparison between carrying value of investment as at balancesheet date and net-worth as reflected by latest audited financials of investee companies.Wherever carrying amount of investment is more than the net-worth of investee Company wehave discussed and enquired with the management the process followed by them to identifypermanent diminution if any in the value of investment and necessary accountingtreatment adopted in the books. In addition management has provided us with the futurebusiness plans and how in their business judgement such gap between investment andnet-worth of the investee is either compensated with improving business conditions orvaluations of such entities. Going forward our regular audit procedures are designed tokeep a follow up on outcomes of these management assertions.

B. Accounting treatment for contracts with customer

Description of key audit matter

Revenue amounting to Rs. 13873.42 Lakhs reported in the Company's financial statementspertains to customer specific contracts and the same are required to satisfy therecognition and measurement criteria as prescribed in IND AS 115 ‘Revenue fromContracts with Customers'. Company's revenue is bifurcated into two main parts (a) revenuefrom software products (IPR based licenses) and (b) revenue from software services.Certain contracts necessarily involve estimations and certain assumptions to be made bythe management in determining the quantum of revenue to be recognised in specific period.This inherently creates certain uncertainties and results in complexities in accountingtreatment wherein incorrect assumptions and estimates can lead to revenue being recognisedin incorrect accounting periods thereby impacting the results. Considering these factorsin the context of our audit this matter was of significance and hence a key audit matter.

Description of Auditor's response

With a view to verify the reasonableness of the revenue accounting we carried outfollowing procedures: a) Understanding the internal control environment for revenuerecognition and to test check with a view to verify its operating effectiveness; b) Majorcontracts were read and analysed to verify correctness of accounting of revenue ascalculated by the Company's Management; c) Discussed with the management process ofidentification of variable consideration and verified the working on test basis; d)Verified the working of unbilled revenue and unearned revenue on test basis; e) Performedanalytical procedures and obtained reasons for major variances; f) Ensured that revenue isrecognized in accordance with accounting policy of the Company and Ind AS 115;

C. CONTINGENT LIABILITIES

Description of key audit matter

Contingent liabilities as at March 31 2020 amounted to Rs. 26966.01 Lakhs whichmainly include pending income-tax matters and certain legal cases other than those formingbasis for our Qualified opinion. Contentious income tax matters relate to interpretationaldifferences between the Company and various tax authorities certain matters subjected tointernal circulars and guidelines within tax authorities irrespective of stated legalprovisions sometimes requiring decision making only by higher tax authorities throughappellate procedures resulting in delays in outcome. Given the current legal andoperational embargo that the Company is facing it is subjected the multiple litigationsby and on the Company sub-judice at various courts and levels requiring the Company'sManagement to exercise significant judgement on these outcomes to determine theliabilities that are contingent in nature. Considering these factors in the context ofour audit this matter was of significance and hence a key audit matter. Description ofAuditor's response With a view to ensure that disclosures made by the Company in Note 31to the Standalone Financial Statements are determined appropriately and prudently weobtained information of pending income-tax matters from the Company and haveobtained/verified the documents including the communication with the departments providedby the Company. In addition we have carried out comparison with respect to previous yearand obtained / reviewed documentation for additional tax matters arisen during the year.Our tax team has carried out discussions with the Company's internal tax team on thesecases mainly with respect to issues raised by various tax authorities in theircommunication to the Company to substantiate Company's assessment that there are nopresent obligations perceived. With respect to legal cases disclosed to us we haveobtained updates on pending cases from the management and discussed it with the Company'sinternal legal department wherever necessary. We carried out a comparison between thelatest status and immediate previous status. While comparing we have tried to ascertainthe appropriateness without being judgemental of the management judgement exercised inupdating to the latest status and have tried to evaluate an impact on such ascertainmentof whether the Company liabilities to which it is contingently liable are appropriatelyascertained with prudence principle.

I N FORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR'S REPORTTHEREON _HEREINAFTERR EFERRED AS "OTHER INFORMATION"_

The Company's Management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Directors'Report including any annexures thereto Corporate Governance Report and ManagementDiscussion and Analysis but does not include the Standalone Financial Statements and ourauditor's report thereon.

These reports are expected to be made available to us after the date of this auditor'sreport. Our opinion on the financial statements does not cover the other information andwe will not express any form of assurance conclusion thereon. In connection with our auditof the Standalone Financial Statements our responsibility is to read the otherinformation identified above when it becomes available and in doing so consider whetherthe other information is materially inconsistent with the Standalone Financial Statementsor our knowledge obtained in the audit or otherwise appears to be materially misstated.When we read these reports if we conclude that there is material misstatement therein weare required to communicate the matter to those charged with governance and describeactions applicable as per applicable laws and regulations.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONEFINANCIAL STATEMENTS

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these Standalone FinancialStatements that give a true and fair view of the financial position financialperformance cash flows and changes in equity of the Company in accordance with theaccounting principles generally accepted in India including the Ind AS. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of 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 Company's Management and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

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:

A. Identify and assess the risks of material misstatement of the Standalone FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

B. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

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

D. 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.

E. 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.

Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Standalone Financial Statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Standalone Financial Statements.

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 auditor's 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 benfits of such communication.

REPORT ON OTHERL EGAL AND REGULATO RY REQUIREMENTS

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

2. As required by section 143 (3) of the Act and based on our audit 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 (including other comprehensiveincome) Statement of Changes in Equity and the Statement of Cash Flows dealt with by thisreport are in agreement with the books of account;

d) In our opinion the aforesaid Standalone Financial Statements comply with the Ind ASspecified under section 133 of the Act read with rule 7 of the Companies (Accounts)Rules 2014 except for the effects if any of the matters described in the basis forQualified opinion paragraph;

e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disQualifiedas on March 31 2020 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting;

g) With respect to the other matters to be included in the auditor's report inaccordance with the requirements of section 197(16) of the Act as amended we report thatin our opinion and to the best of our information and according to the explanations givento us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act; and

h) 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 as at March 31 2020 onits Standalone Financial Statements to the extent it is ascertainable [Refer note 31 tothe Standalone Financial Statements and ‘Basis for Qualified Opinion'].

ii. The Company does not have any outstanding long-term contracts including derivativecontracts as on March 31 2020.

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

For Sharp & Tannan Associates

Chartered Accountants

Firm's Registration No.: 109983W

Pramod Bhise

Partner

Membership No.: (F) 047751

UDIN: 20047751AAAADM4300

Pune July 31 2020

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report on even date:

(i) In respect of the Company's property plant & equipment (fixed assets)

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

(b) as explained to us fixed assets are being physically verified by the managementwhich in our opinion is reasonable having regard to the size of the Company and nature ofits assets. The frequency of physical verification is reasonable and no materialdiscrepancies were noticed on such verification.

(c) the title deeds of immovable properties are held in the name of the Company.

(ii) According to the process explained to us and as followed by the Company theCompany's inventory items are directly delivered to its customers on their procurement.Accordingly reporting on paragraph 3(ii) of the Order is not applicable.

(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. Accordingly reporting on paragraph 3(iii) of the Order is notapplicable.

(iv) In respect of loans investments guarantees and security provisions of section185 and section 186 of the Act have been complied with to the extent applicable.

(v) According to information and explanation provided to us the Company has notaccepted deposits from the public and accordingly reporting on para 3(v) of the Order isnot applicable.

(vi) Maintenance of cost records has not been specified by the Central government undersection 148(1) of the Act. Accordingly reporting on paragraph 3 (vi) of the Order is notapplicable.

(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 including provident fund employees' state insuranceincome-tax goods and service tax duty of customs cess and any other material statutorydues as applicable with the appropriate authorities. According to the information andexplanation given to us no undisputed amounts payable in respect of provident fundemployees' state insurance income-tax goods and service tax duty of customs cess andany other material statutory dues as at March 31 2020 for a period of more than sixmonths from the date they became payable.

(b) According to the information and explanation given to us and the records of theCompany examined by us there are no dues of Income tax or Sales tax or Service tax orGoods and Services tax or duty of Customs or duty of Excise or Value added tax or whichhave not been deposited by the Company as at March 31 2020 on account of disputes exceptthe following:

Name of the Statue Name of the disputed dues Amount involved (Rs. Lakhs) Period to which the amount relates Forum where disputes are pending
Income Tax Act 1961 Income Tax 2605.45 2011-12 Commissioner of Income
2888.47 2012-13 Tax Appeals
1187.14 2013-14
289.86 2016-17
288.66 2017-18

(viii) According to the records of the Company examined by us and the information andexplanation given to us during the year the Company has not defaulted in repayment ofloans or borrowings to any bank. The Company has not availed any loans or borrowings fromfinancial institution government and debenture holder.

(ix) According to information and explanation given to us no money has been raised byway of further public offer (including debt instruments) and by way of a term loan duringthe year. Accordingly reporting on para 3(ix) is not applicable.

(x) Except for the matters(s) referred in the ‘Basis for Qualified Opinion' of ouraudit report which are sub-judice and hence are inconclusive to the best of our knowledgeand information and explanations given to us no fraud by the Company or any fraud on theCompany by its officers or employees has been noticed or reported during the year.

(xi) Managerial remuneration has been paid/provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company. Accordingly reporting on para 3(xii) is notapplicable.

(xiii) All transactions with related parties are in compliance with Sections 177 and188 of the Act and the details have been disclosed in the Standalone Financial Statementsas required by the applicable accounting Standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under reviewaccordingly reporting on paragraph 3 (xiv) of the Order is not applicable

(xv) The Company has not entered into any non-cash transactions with directors orpersons connected with him. Accordingly reporting on paragraph 3 (xv) of the Order is notapplicable.

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

For Sharp & Tannan Associates

Chartered Accountants

Firm's Registration No.: 109983W

Pramod Bhise

Partner

Membership No.: (F) 047751

UDIN: 20047751AAAADM4300

Pune July 31 2020

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 2 (F) under the heading "Report on other legal andregulatory requirements" of our report on even date:

REPORT ON THE INTERNAL FINANCIAL CONTROLS _UNDER CLAUSE (i) OF SUB_SECTION 3 OF SECTION143 OF THE COMPANIES ACT 2013 ("THE ACT")

OPINION

We have audited the internal financial controls over financial reporting of 63 moonstechnologies limited (hereinafter referred as "the Company") as of March 312020 in conjunction with our audit of the Standalone Financial Statements of the Companyfor the year ended on that date.

In our opinion and to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2020 based on the internalfinancial control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting (hereinafter referred as "theguidance note") issued by the Institute of Chartered Accountants of India(hereinafter referred as "ICAI").

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's Management and Board of Directors are responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the guidance note. These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to the Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the guidance note and the SAs issued by ICAI and deemed to be prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols. Those SAs 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 over financial reporting was established and maintained and ifsuch controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Standalone Financial Statements whether due to fraud orerror.

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 systemover financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Standalone Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneFinancial 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 StandaloneFinancial Statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

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

For Sharp & Tannan Associates

Chartered Accountants

Firm's Registration No.: 109983W

Pramod Bhise

Partner

Membership No.: (F) 047751

UDIN: 20047751AAAADM4300

Pune July 31 2020

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