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Dr Reddys Laboratories Ltd.

BSE: 500124 Sector: Health care
NSE: DRREDDY ISIN Code: INE089A01023
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NSE 00:00 | 27 May 3883.00 18.70
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OPEN 3882.00
PREVIOUS CLOSE 3863.65
VOLUME 49668
52-Week high 4099.90
52-Week low 2352.00
P/E 21.97
Mkt Cap.(Rs cr) 64,533
Buy Price 3883.30
Buy Qty 18.00
Sell Price 3899.00
Sell Qty 5.00
OPEN 3882.00
CLOSE 3863.65
VOLUME 49668
52-Week high 4099.90
52-Week low 2352.00
P/E 21.97
Mkt Cap.(Rs cr) 64,533
Buy Price 3883.30
Buy Qty 18.00
Sell Price 3899.00
Sell Qty 5.00

Dr Reddys Laboratories Ltd. (DRREDDY) - Auditors Report

Company auditors report

To the members of Dr. Reddy's Laboratories Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statementsof Dr. Reddy's Laboratories Limited ("the Company") which comprise the Balancesheet as at 31 March 2019 the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Statement of Cash Flows and the Statement of Changes inEquity for the year then ended and notes to the financial statements including a summaryof significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Companies Act 2013 as amended ("the Act") in themanner 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 2019 its profit including other comprehensive income its cash flows and thechanges in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the Auditors'Responsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone Ind AS financial statementsunder the 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 audit opinion on the standalone Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone Ind AS financial statements forthe financial year ended 31 March 2019. These matters were addressed in the context of ouraudit of the standalone Ind AS financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters. For each matter belowour description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditors' responsibilities for the audit of the standalone Ind AS financialstatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the standalone Ind AS financial statements. The resultsof our audit procedures including the procedures performed to address the matters belowprovide the basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key audit matters How our audit addressed the key audit matter
Carrying value of intangible assets intangible assets under development and goodwill (as described in note 1.3(f) and 1.3(i) of the significant accounting policies and note 2.3 and 2.2 for details and movement in goodwill and intangible assets respectively in the standalone Ind AS financial statements)
Our audit procedures included the following:
As at 31 March 2019 the Company hasर7000 million of intangible assets andर323 million of goodwill. The carrying value of these intangible assets are based on future cash flows and there is a risk that the assets maybe impaired if cash flows are not in line with projections. • We evaluated the design and tested the operating effectiveness of management's controls in assessing the carrying value of goodwill and intangible assets.
• We assessed the Company's methodology applied in determining the CGUs to which goodwill is allocated.
• We assessed the Company's valuation methodology applied in deriving the recoverable value.
• We evaluated the assumptions applied to key inputs such as discount rates sales volume and prices long term growth rates and terminal values which included comparing these inputs with assumptions made by the management in prior years.
Valuation of goodwill and intangible assets is subject to management's assessment of recoverable amount being the higher of the value in use and fair value less costs to sell involving significant judgment and are based on number of variables and estimates including projection of future sales operating costs and profit margins; appropriate discount rate and terminal value growth rate; and probability of technical and regulatory success factors in applying discounted cash flow valuation methodology. • We discussed potential changes in key drivers as compared to previous year / actual performance with management to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable.
• We tested the arithmetical accuracy of the models.
• We also assessed the recoverable value headroom by performing sensitivity testing of key assumptions used.
• We evaluated the adequacy of financial statement disclosures including disclosures of key assumptions judgements and sensitivities.
Key audit matters
Contingencies including litigations and tax (as i contingencies in the standalone Ind AS financial How our audit addressed the key audit matter described in note 1.3(k) of the significant accounting policies and note 2.30(A) containing details of statements)
The Company is involved in disputes lawsuits claims anti-trust governmental and / or regulatory inspections inquiries investigations and proceedings including patent tax and commercial matters that arise from time to time in the ordinary course of business. Most of the claims involve complex issues. The Company assisted by their external legal counsel assesses the need to make provision or disclose a contingency on a case-to-case basis considering the underlying facts of each litigation. The aforesaid assessment may result in an incorrect disclosure or provision in the books of account. Our audit procedures included the following:
• We evaluated the design and tested the operating effectiveness of controls relating to identification and evaluation of claims proceedings and investigations at different levels in the Company and the measurement of provisions for disputes potential claims and litigation contingent liabilities and disclosures.
• We obtained a list of ongoing litigations from the Company's in house legal counsel. We selected a sample of litigations based on materiality and performed inquiries with the said counsel on the legal evaluation of these litigations. We have compared the said evaluation with the provision or disclosure in the standalone Ind AS financial statements. We have tested the underlying computation of the management in relation to the measurement of provision or the contingency.
• We solicited legal letters from the Company's external legal advisors with respect to the matters included in the summary. Where appropriate we examined correspondences connected with the cases.
• We obtained the details of tax assessments and demands as at the year ended 31 March 2019. We inspected relevant communication with tax authorities. We involved tax experts in assessing the nature and amount of the tax exposures and assessed management's conclusions on whether exposures are probable contingent or remote. Where exposures are assessed as probable we evaluated the amounts provided with respect to those exposures.
This area is significant to our audit since the accounting and disclosure for contingent legal and tax liabilities is complex and judgemental (due to the difficulty in predicting the outcome of the matter and estimating the potential impact if the outcome is unfavourable) and the amounts involved are or can be material to the standalone Ind AS financial statements. • We also evaluated the adequacy of disclosures in the standalone Ind AS financial statements.
Rebates discounts returns etc. in Revenue (a statements and note 2.11 of the standalone Ind A is described in note 1.3(l) of the significant accounting policies of standalone Ind AS financial S financial statements)
Revenue is recognised net of accrual for sales returns rebates & discounts etc. The estimates relating to the accruals are important given the significance of revenue and considering the distinctive terms of arrangement with customers. These estimates are complex and requires significant judgement and estimation by the Company for establishing an appropriate accrual. Accuracy of revenues may deviate because change in judgements and estimates. Accordingly the same has been considered as a key audit matter. Our audit procedures included the following:
• We assessed and performed test of controls over the completeness recognition and measurement of accruals.
• We obtained Management's calculations for accruals and assessed the assumptions used by reference to the company's stated commercial policies the terms of the applicable contracts.
• We assessed management analysis of the historical pattern of accruals to validate management's assumption for creation of such provisions.
• We compared the assumptions to contracted prices historical rebates discounts allowances and returns where relevant and to current payment trends. We also considered the historical accuracy of the management's estimates in prior years. We have also performed procedures to test recording of revenue in appropriate period which includes:
o Verifying sample sales transactions near period-end.
o Evaluating the level of returns following the period end and compared to previous periods.
Recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 Revenue from Contracts with Customers (as described in note 1.3(a) of the significant accounting policies of standalone Ind AS financial statements)
The Company has adopted Ind AS 115 Revenue from Contracts with Customers starting 1 April 2018. The adoption of the new revenue accounting standard involves application of certain key principles relating to identification of performance obligations determination of transaction price of the identified performance obligations the timing of transfer of control for recognition of revenue or the appropriateness of the basis used to measure revenue recognized over a period. Additionally new revenue accounting standard contains new disclosures. Our audit procedures included the following:
• We considered the Company's revenue recognition accounting policies based on the principles in Ind AS 115.
• We evaluated the design implementation and effective operation of the internal controls relating to implementation of the new revenue accounting standard.
• We selected samples of continuing and new contracts and performed the following procedures: o Read analysed and identified the distinct performance obligations in these contracts.
o Compared these performance obligations with that identified and recorded by the Company.
o Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue.
o Evaluated management assessment of point of recognition of revenue based on transfer of control or satisfaction of obligations over time.
• We evaluated the adequacy of financial statement disclosures pursuant to new revenue accounting standard.

Our opinion on the standalone Ind AS financial statements does notcover the other information and we do not and will not express any form of assuranceconclusion thereon.

In connection with our audit of the standalone Ind AS financialstatements our responsibility is to read the other information identified above and indoing so consider whether such other information is materially inconsistent with thestandalone Ind AS financial statements or our knowledge obtained in the audit or otherwiseappears to be materially misstated. If based on the work we have performed we concludethat there is a material misstatement of this other information we are required to reportthat fact. We have nothing to report in this regard.

Responsibilities of Management for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone Ind ASfinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in equity of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended. 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; andthe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS financial statements management isresponsible 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.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditors' Responsibilities for the Audit of the Standalone Ind ASFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditors' report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone Ind AS financialstatements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors' report to therelated disclosures in the standalone Ind AS financial statements or if such disclosuresare inadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors' 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 thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind AS financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalone IndAS financial statements for the financial year ended 31 March 2019 and are therefore thekey audit matters. We describe these matters in our auditors' report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Actbased on our audit we give in the "Annexure 1"astatement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss including theStatement of Other Comprehensive Income the Statement of Cash Flows and the Statement ofChanges in Equity dealt with by this Report are in agreement with the books of account;

d) In our opinion the aforesaid standalone Ind AS financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withCompanies (Indian Accounting Standards) Rules 2015 as amended;

e) On the basis of the written representations received from thedirectors as on 31 March 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2019 from being appointed as a director in termsof Section 164 (2) of the Act;

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company with reference to these standalone Ind AS financialstatements and the operating effectiveness of such controls refer to our separate Reportin "Annexure 2" to this report;

g) In our opinion the managerial remuneration for the year ended 31March 2019 has been paid / provided by the Company to its directors in accordance with theprovisions of section 197 read with Schedule V to the Act;

h) With respect to the other matters to be included in the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

(i) The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements - Refer note 2.30(A) tothe standalone Ind AS financial statements;

(ii) The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts;

(iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

ANNEXURE 1 TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF DR. REDDY'S LABORATORIES LIMITED

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by themanagement during the year but there is a regular programme of verification which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by themanagement the title deeds of immovable properties included in property plant andequipment are held in the name of the Company.

(ii) The management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies were noticed on suchphysical verification. Inventories lying with third parties have been confirmed by them asat 31 March 2019 and no material discrepancies were noticed in respect of suchconfirmations.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013. Accordingly the provisions of clause 3 (iii) (a) (b) and(c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has not advanced loans to directors / to a company in which theDirector is interested to which provisions of section 185 of the Companies Act 2013 applyand hence not commented upon. In our opinion and according to the information andexplanations given to us the Company has made investments and given guarantees/providedsecurity which is in compliance with the provisions of section 186 of the Companies Act2013.

(v) The Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148(1) of the Companies Act 2013 and are of the opinion that primafacie the specified accounts and records have been made and maintained. We have nothowever made a detailed examination of the same.

(vii) (a) The Company is regular in depositing with appropriateauthorities undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of custom duty of excise value addedtax goods and service tax cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax service tax sales-tax duty of custom duty of excise value added tax goodsand service tax cess and other statutory dues were outstanding at the year end for aperiod of more than six months from the date they became payable.

(c) According to the records of the Company the dues of income-taxsales-tax service tax duty of custom duty of excise value added tax and cess onaccount of any dispute are as set out in Appendix 1.

(viii) In our opinion and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of loans or borrowingto banks or government. There are no dues which are payable to financial institutions. TheCompany did not have any debenture holders during the year.

(ix) According to the information and explanations given by themanagement the Company has not raised any money by way of initial public offer / furtherpublic offer / debt instruments and term loans hence reporting under clause (ix) is notapplicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the standalone Ind AS financial statements andaccording to the information and explanations given by the management we report that nofraud by the Company or no material fraud on the Company by the officers and employees ofthe Company has been noticed or reported during the year.

(xi) According to the information and explanations given by themanagement the managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act 2013.

(xii) In our opinion the Company is not a nidhi company. Thereforethe provisions of clause 3 (xii) of the order are not applicable to the Company and hencenot commented upon.

(xiii) According to the information and explanations given by themanagement transactions with the related parties are in compliance with section 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in thenotes to the standalone Ind AS financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations given to us and onan overall examination of the balance sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence reporting requirements under clause 3(xiv) are notapplicable to the Company and not commented upon.

(xv) According to the information and explanations given by themanagement the Company has not entered into any non-cash transactions with directors orpersons connected with him as referred to in section 192 of Companies Act 2013.

(xvi) According to the information and explanations given to us theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.

for S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per S Balasubrahmanyam

Partner

Membership Number: 53315

Place : Hyderabad

Date : 17 May 2019

ANNEXURE 2 TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF DR. REDDY'S LABORATORIES LIMITED

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Dr. Reddy's Laboratories Limited ("the Company") as of 31 March2019 in conjunction with our audit of the standalone Ind AS financial statements of theCompany for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is 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 on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. 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 the Company's policies the safeguardingof its 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 Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting with reference to these standalone Ind ASfinancial statements based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing as specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsand both issued by the Institute of Chartered Accountants of India. 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 over financial reporting with reference to these standalone Ind AS financialstatements was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements and their operating effectiveness. Our auditof internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditors'judgement including the assessment of the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlsover financial reporting with reference to these standalone Ind AS financial statements.

Meaning of Internal Financial Controls Over Financial Reporting WithReference to these Standalone Ind AS Financial Statements

A company's internal financial control over financial reporting withreference to these standalone Ind AS financial statements is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof standalone Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting with reference to these standalone Ind AS financial statementsincludes those policies and procedures that (1) pertain to the maintenance of recordsthat in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of standalone Ind ASfinancial 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 standaloneInd AS financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting With Reference to these Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls overfinancial reporting with reference to these standalone Ind AS financial statementsincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingwith reference to these standalone Ind AS financial statements to future periods aresubject to the risk that the internal financial control over financial reporting withreference to these standalone Ind AS financial statements may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

In our opinion the Company has in all material respects adequateinternal financial controls over financial reporting with reference to these standaloneInd AS financial statements and such internal financial controls over financial reportingwith reference to these standalone Ind AS financial statements were operating effectivelyas at 31 March 2019 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

for S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per S Balasubrahmanyam

Partner

Membership Number: 53315

Place : Hyderabad

Date : 17 May 2019