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Digicontent Ltd.

BSE: 542685 Sector: Media
NSE: DGCONTENT ISIN Code: INE03JI01017
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OPEN 15.30
CLOSE 14.15
VOLUME 300
52-Week high 23.80
52-Week low 10.54
P/E
Mkt Cap.(Rs cr) 83
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Digicontent Ltd. (DGCONTENT) - Auditors Report

Company auditors report

To the Members of Digicontent Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the standalone financial statements of Digicontent Limited ("theCompany") which comprise the standalone balance sheet as at 31 March 2021 and thestandalone statement of profit and loss (including other comprehensive income) standalonestatement of changes in equity and standalone statement of cash flows for the year thenended and notes to the standalone financial statements including a summary of thesignificant 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 ‘Basisfor Qualified opinion' section of our report the aforesaid standalone financialstatements give the information required by the Companies Act 2013 ("Act") inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2021 and loss and other comprehensive income changes in equity and its cash flowsfor the year ended on that date.

Basis for Qualified Opinion

We draw attention to Note 37 to the standalone financial statements which explainsthat the Company basis the financial information as per its last audited financialstatements for the year ended 31 March 2020 holds not less than 90% of its net assets inthe form of investment in equity shares and loans in/ to group companies and itsinvestments in the equity shares in the group companies constitute not less than 60% ofits net assets. However as per the aforesaid financial statements the Company did notsatisfy the income criterion of principal business criteria as defined by the Reserve Bankof India (‘RBI') of being classified as a Non-banking Financial Company (NBFC).Further till 31 March 2020 the Company did not carry on any other financial activityreferred to in Section 45I(c) and 45I (f) of the Reserve Bank of India Act 1934. In thiscontext the status of the Company is under discussion with RBI i.e. whether it is a NBFCsince it does not satisfy the income criterion of principal business criteria and furtherwhether it should be registered as a Systemically Important Core Investment Company(SI-CIC) as per the conditions as stated in the Master Direction - Core InvestmentCompanies (Reserve Bank) Directions 2016 as amended (‘Regulations') issued by theRBI since it holds total assets of not less than Rs.100 crore and holds public funds asat 31 March 2020.

The Company has filed various letters with the RBI and provided unaudited provisionalBalance sheet and Income statement as at 31 December 2020 and 31 January 2021 along withaudited financial statements of 31 March 2020 and explanations wherein it has stated thatit need not be registered as a NBFC and SI-CIC since it does not meet the criteria as perthe financial statements for the year ended

31 March 2020. However RBI vide letter dated 23 March 2021 has stated that it appearsthat the Company qualifies to be a NBFC and it is required to apply for certificate ofregistration as a NBFC or merge with another NBFC/ non-financial company or wind up thebusiness of NBFC. The Management is of the view that the RBI has not fully considered theCompany's contentions as detailed in various letters submitted earlier with the RBIbefore arriving at the conclusion. The Company vide letter dated 9 June 2021 hassubmitted its representation to the RBI wherein the Company has reiterated that theCompany does not fulfil principal business criteria to be classified as a NBFC or registeras a SI-CIC and in any case the Company has drawn up a scheme of merger for merging theCompany and its two other fellow subsidiary companies with HT Media Limited (aNon-Financial Company and a fellow subsidiary) for which the scheme has been approved bythe Board of Directors in February 2021 and filed with the stock exchanges in March 2021for approval.

Pending resolution of this matter we are unable to comment on the impact thereof ifany on the standalone financial statements for the year ended 31 March 2021.

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 FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our qualified opinion on the Standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone 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 and apart from matter considered in ‘Basis forQualified Opinion' section below is the Key Audit Matter.

Description of Key Audit Matter

Impairment assessment of Investment in subsidiary See note 5 to the standalonefinancial statements

The key audit matter How the matter was addressed in our audit
The Company has identified investment in its wholly owned subsidiary company (‘HTDS') of H 17580 Lakhs as a separate cash generating unit (‘CGU'). The Company has performed an impairment assessment on its investment in subsidiary as at 31 March 2021. Our audit procedures included:
The recoverable amount of the CGU which is based on value in use (‘VIU') has been derived from discounted cash flow model. The model uses several key assumptions. Considering the inherent uncertainty complexity and judgment involved and the significance of the value of the assets impairment assessment of the above mentioned assets has been considered as a key audit matter. - Tested design implementation and operating effectiveness of key controls over the impairment assessment process.
- We assessed the value in use (VIU) as determined by the Company as under:
• Assessed the method of determining VIU and key assumptions used therein through historical information budgets / projections externally derived data and other relevant information.
• Challenged the key assumptions within the build up and methodologies used by the Company.
• Assessed the sensitivity of the outcome of impairment assessment to changes in key assumptions.
• Compared the implied multiple arising from the VIU to the market multiples.
• Involved our internal specialists to assist us in performing above mentioned procedures to the extent applicable.

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'sannual report but does not include the financial statements and our auditors' reportthereon.

Our qualified opinion on the standalone financial statements does not cover the otherinformation and 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. As described in the Basis for QualifiedOpinion section above pending resolution of the matter with RBI we are unable to commenton the impact thereof if any on the standalone financial statements for the year ended31 March 2021. Accordingly we are unable to conclude whether or not the other informationis materially misstated with respect to this matter.

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

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 state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible 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 the Board of Directors either intends to liquidate the Companyor to cease operations 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 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 with reference to financial statements in placeand the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company 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 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.

2. (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) Except for the possible effects of the matter described in the ‘Basis forQualified Opinion' section above in our opinion proper books of account as required bylaw have been kept by the Company so far as it appears from our examination of thosebooks. 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) Except for the possible effects of the matter described in the‘Basis for Qualified Opinion' section above in our opinion the aforesaid standalonefinancial statements comply with the Ind AS specified under section 133 of the Act. e) Thematter described in the ‘Basis for Qualified Opinion' section above and ourobservations on the achievement of the objectives of the internal control criteria asexplained in our separate report in ‘Annexure B' in our opinion may have an adverseeffect on the functioning of the Company. f) On the basis of the written representationsreceived from the directors as on 31 March 2021 taken on record by the Board of Directorsnone of the directors is disqualified as on 31 March 2021 from being appointed as adirector in terms of Section 164(2) of the Act. g) The qualification relating tomaintenance of accounts and other matters connected therewith are as stated in the"Basis for Qualified Opinion" section above. h) With respect to the adequacy ofthe internal financial controls with reference to financial statements of the Company andthe operating effectiveness of such controls refer to our separate Report in"Annexure B". (B) With respect to the other matters to be included in theAuditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to the best of our information and according to the explanationsgiven to us: i. The Company does not have any pending litigations which would impact itsfinancial position. ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses. iii. There wereno amounts which were required to be transferred to the Investor Education and ProtectionFund 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 2021.

(C) With respect to the matter to be included in the Auditor's Report under section197(16) of the Act:

In our opinion and according to the information and explanations given to us there areno directors to whom remuneration is paid/payable in accordance with the provisions ofSection 197 of the Act. The Ministry of Corporate Affairs has not prescribed other detailsunder Section 197(16) of the Act which are required to be commented upon by us.

For B S R and Associates
Chartered Accountants
Firm's Registration No.:128901W
Rajesh Arora
Partner
Place:Gurugram Membership No. 076124
Date:15 June 2021 UDIN:21076124AAAABU4281

referred to in our Independent Auditor's Report to the members of Digicontent Limitedon the standalone financial statements for the year ended 31 March 2021

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets (i.e. property plant andequipment).

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification by management is reasonable havingregard to the size of the Company and the nature of its assets. In accordance with thisprogramme certain fixed assets were physically verified during the year. As informed tous no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us the Company does nothave any immovable properties. Accordingly paragraph 3(i)(c) of the Order is notapplicable to the Company.

(ii) The Company is in the business of providing advertisement services and does nothold inventories. Accordingly paragraph 3(ii) of the Order is not applicable to theCompany.

(iii) According to the information and explanations given to us the Company hadgranted loan in the previous year to a company covered in the register maintained underSection 189 of the Companies Act 2013 in respect of which:

a) The terms and conditions of the grant of such loan are not prejudicial to theCompany's interest;

b) The schedule of repayment of principal and payment of interest has been stipulated.The loan has been repaid in the financial year ended 31 March 2021; and

c) There is no amount overdue for more than 90 days in respect of the above mentionedloan.

(iv) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no loans given or investments made bythe Company which are not in compliance with Section 185 and 186 of the Companies Act2013. There are no guarantees given or securities provided by the Company as specifiedunder Section 185 and 186 of the Companies Act 2013.

(v) As per the information and explanations given to us the Company has not acceptedany deposits as mentioned in the directives issued by the Reserve Bank of India and theprovisions of Section 73 to 76 or any other relevant provisions of the Companies Act 2013and the rules framed there under. Accordingly paragraph 3(v) of the Order is notapplicable to the Company.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under sub-section (1) of Section 148 ofthe Companies Act 2013 for any of the services rendered by the Company. Accordingly.Paragraph 3(vi) of the Order is not applicable to the Company.

(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 income taxgoods and services tax (GST) cess and other statutory dues have been regularly depositedduring the year by the Company with the appropriate authorities. As explained to us theCompany did not have any dues on account of employees' state insurance duty of customssales tax services tax duty of excise and value added taxes.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax GST cess and other statutory dues werein arrears as at 31 March 2021 for a period of more than six months from the date theybecame payable.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax service tax GST value added tax and duty of customs which havenot been deposited by the Company with the appropriate authorities on account of anydispute as at 31 March 2021.

(viii) In our opinion and according to the information and explanations given to us andon the basis of our examination of the records of the Company the Company has not takenany loans and borrowings from financial institutions banks and government and has notissued any debentures. Accordingly paragraph 3(viii) of the Order is not applicable tothe Company.

(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3(ix) of the Order is not applicable to the Company.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no directors to whom remuneration ispaid/payable in accordance with the provisions of Section 197 of the Act. Accordinglyparagraph 3(xi) of the Order is not applicable to the Company.

(xii) According to the information and explanations given to us the Company is not anidhi company. Accordingly paragraph 3(xii) of the Order is not applicable to theCompany.

(xiii) In our opinion and according to the information and explanations given to us andon the basis of our examination of the records of the Company the transactions with therelated parties are in compliance with Sections 177 and 188 of the Companies Act 2013where applicable and the details have been disclosed in the standalone financialstatements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on the basis of 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 current year. Accordingly paragraph 3(xiv) of the Order is not applicable to theCompany.

(xv) According to information and explanations given to us and based on our examinationof the records of Company the Company has not entered into any non-cash transactions withdirectors or persons connected with them. Accordingly paragraph 3(xv) of the Order is notapplicable to the Company.

(xvi) Attention is invited to the Basis for Qualified Opinion section of our AuditReport on the standalone financial statements for the year ended 31 March 2021 wherein itis explained that Reserve Bank of India (‘RBI') vide letter dated 23 March 2021 hasstated that it appears that the Company qualifies to be a NBFC and that it is required toapply for certificate of registration as a NBFC or merge with another NBFC/non-financialcompany or wind up the business of NBFC. The Management is of the view that the RBI hasnot considered Company's contentions as detailed in various letters submitted earlierwith the RBI (where in the Company had stated that it need not be classified as a NBFC orregister as a Systemically Important CIC since it does not fulfil the principal businesscriteria of being classified as NBFC. The Company vide letter dated 9 June 2021 hassubmitted its representation to the RBI wherein the Company has reiterated that theCompany does not fulfil principal business criteria to be classified as a NBFC or registera SI-CIC and in any case the Company has drawn up a scheme of merger for merging theCompany and its two other fellow subsidiary companies with HT Media Limited (aNon-Financial Company and a fellow subsidiary) for which the scheme has been approved bythe Board of Directors in February 2021 and filed with the stock exchanges in March 2021for approval. Pending resolution of this matter we are unable to comment on the impactthereof if any on the standalone financial statements for the year ended 31 March 2021.

For B S R and Associates
Chartered Accountants
Firm's Registration No.:128901W
Rajesh Arora
Partner
Place:Gurugram Membership No. 076124
Date:15 June 2021 UDIN:21076124AAAABU4281

Annexure B

to the Independent Auditor's report on the standalone financial statements ofDigicontent Limited for the year ended 31 March 2021

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 2(A)(h) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date) Qualified Opinion

We have audited the internal financial controls with reference to financial statementsof Digicontent Limited ("the Company") as of 31 March 2021in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

In our opinion except for the possible effects of the material weakness describedbelow on the achievement of the objectives of the control criteria to the best of ourinformation and according to the explanations given to us the Company has in allmaterial respects adequate internal financial controls with reference to financialstatements and such internal financial controls were operating effectively as at 31 March2021 based on the internal financial controls with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (the "GuidanceNote").

We have considered the material weakness identified and reported below in determiningthe nature timing and extent of audit tests applied in our audit of the standalonefinancial statements for the year ended 31 March 2021 of the Company and this materialweakness has affected our opinion on the said standalone financial statements of theCompany and we have issued a qualified audit opinion on the said standalone financialstatements.

Basis for Qualified Opinion

As explained in note 37 to the standalone financial statements and the Basis forQualified Opinion section of our Audit Report on the standalone financial statements forthe year ended 31 March 2021 the status of the Company i.e. whether it is a NBFC and alsoa Systemically Important Core Investment Company (SI-CIC) is under discussion with ReserveBank of India (‘RBI'). The Company has submitted various letters with RBI andprovided explanations wherein it has stated that it need not be classified as NBFC andregister as a SI-CIC since it does not meet the principal business criteria as at 31 March2020. However RBI vide letter dated 23 March 2021 has stated that it appears that theCompany qualifies to be a NBFC and it is required to apply for certificate of registrationas a NBFC or merge with another NBFC/non-financial company or wind up the business ofNBFC. The Company vide letter dated 9 June 2021 has submitted its representation to theRBI wherein the Company has reiterated that the Company does not fulfil principalbusiness criteria to be classified as a NBFC or register as a SI-CIC and in any case theCompany has filed drawn up a scheme of merger for merging the Company and its two otherfellow subsidiary companies with HT Media Limited (a Non-Financial Company and a fellowsubsidiary) for which the scheme has been approved by the Board of Directors in February2021 and filed with the stock exchanges in March 2021 for approval. The above represents amaterial weakness since the Company did not have an appropriate internal control system inrespect to compliance with the requirements of the Master Direction - Core InvestmentCompanies (Reserve Bank) Directions 2016 as amended (‘Regulations') issued by theRBI which could potentially result non-compliance with applicable laws and regulations.

Pending resolution of this matter we are unable to comment on the impact thereof ifany on the standalone financial statements for the year ended 31 March 2021.

A ‘material weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.

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").

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively 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 financialstatements included obtaining an understanding of such internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the 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 qualified audit opinion on the Company's internal financialcontrols with reference to 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 withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial statements.

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 standalone financial statements to future periods are subject to the riskthat the internal financial controls 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 and Associates
Chartered Accountants
Firm's Registration No.:128901W
Rajesh Arora
Partner
Place:Gurugram Membership No. 076124
Date:15 June 2021 UDIN:21076124AAAABU4281

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