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Eros International Media Ltd.

BSE: 533261 Sector: Media
NSE: EROSMEDIA ISIN Code: INE416L01017
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OPEN 14.80
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VOLUME 7672
52-Week high 101.00
52-Week low 9.08
P/E 1.96
Mkt Cap.(Rs cr) 143
Buy Price 15.00
Buy Qty 1337.00
Sell Price 15.30
Sell Qty 1680.00
OPEN 14.80
CLOSE 14.80
VOLUME 7672
52-Week high 101.00
52-Week low 9.08
P/E 1.96
Mkt Cap.(Rs cr) 143
Buy Price 15.00
Buy Qty 1337.00
Sell Price 15.30
Sell Qty 1680.00

Eros International Media Ltd. (EROSMEDIA) - Auditors Report

Company auditors report

To the Members of

Eros International Media Limited

Report on the Standalone financial statements Opinion

We have audited the accompanying standalone financial statements of ErosInternational Media Limited ("the Company") which comprise the BalanceSheet as at 31 March 2019 the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of significant accounting policies and other explanatory information(hereinafter referred to as "Financial Statement").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards ("Ind AS")specified under Section 133 of the Act and other accounting principles generally acceptedin India of the state of affairs of the Company as at 31 March 2019 its profit includingother comprehensive income its cash flows and the statement of changes in equity for theyear ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing ("SAs")specified under Section 143(10) of the Act. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI‘s Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion on the standalone financialstatements.

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. We have determined the matters described below to bekey audit matters to be communicated in our report

Key Audit Matters Response to Key Audit Matters
Revenue Recognition
(Refer note 1 and para ‘a' of the significant accounting policies)
The Company recognize theatrical income license Fees and distribution revenue net of sales related taxes when control of the underlying products have been transferred along with satisfaction of performance obligation. Our audit procedures to assess the appropriateness of revenue recognised included the following:
Obtaining an understanding of an assessing the design implementation and operating effectiveness of the Company's key internal controls over the revenue recognition process.
Recognition of revenue is driven by specific terms of related contracts. The Company has applied Ind AS 115 from 1 April 2018 and has evaluated all its contracts with respect to the new accounting guidance. Examination of contracts entered into close to year end to ensure revenue recognition is made in correct period.
Testing a sample of contracts from various revenue streams by agreeing information back to contracts and proof of delivery or transmission as appropriate and ensure revenue recognition is in accordance with principles of Ind AS 115.
The various streams of revenue together with the level of judgement involved make its accounting treatment a significant matter for our audit. Assessing the adequacy of Company's disclosure in accordance with requirements of Ind AS 115.
Our testing as described above showed that revenue has been recorded in accordance with the terms of underlying contracts and accounting policy in this area. The disclosures made relating to revenues are in agreement with Ind AS 115.
Content Advances
Company enters into agreements with production houses to develop future film content. Advances are given as per terms of agreements. Such content advances are monitored by management of the Company for recoverability and appropriate write offs are taken when film production does not seem viable and refund of advance is not probable basis management evaluation. Our audit procedures with respect to content advance delivery of the content and it's impairment includes:
Obtaining an understanding of and assessing the design implementation and operating effectiveness of the Company's key controls over the processes of authorisation of content advances and tracking of receipt of related content as per agreement.
Examination of contracts on sample basis entered by the Company and agreeing with the schedule of content advance.
The Content advances are transferred to film and rights at the point at which the content is first exploited. Provision is made as per provision policy in respect of content advances against which content has not been delivered by vendor within agreed timelines or where projects are at standstill/put on hold for substantial period of time. Because of the significance of content advances to the balance sheet and of the significant degree of management judgment involved in evaluating the adequacy of the allowance for content advances we identified this area as key audit matter. Reviewing ageing of advances to determine the adequacy of the provision made as per provisioning policy.
Testing of the amounts transferred to film and rights account on sample basis on delivery of content by vendor.
Circulating and obtaining independent confirmations from parties on the outstanding balances on sample basis. Testing the reconciliation if any between the balances confirmed by party and balance in the books.
Conducting discussion with the management and reviewing on sample basis the project status prepared by management for determining the adequacy of impairment provisions where balances are still pending to be adjusted against the content to be delivered by the party.
The results of our testing of confirmations floated and other test as described above were satisfactory and concluded that provision made for impairment of content advance was appropriate.
Amortisation of Film and Content Rights
(Refer note 1 and para ‘d' of the significant accounting policies)
The cost incurred on acquisition of film and content rights are amortised over the period. Company carries out stepped up amortisation of film content with higher amortisation in year of film release and lower amortisation in later periods as per the policy disclosed in significant accounting policy. Our audit procedures to test amortisation/impairment of film content included the following:
Assessing the design implementation and operating effectiveness of the Company's key internal controls over the processes of maintenance and updation of master files containing data on the film rights carrying value and the related amortisation computations thereof.
Such amortisation policy has been derived basis management's expectation of overall performance of films based on historical trends. Testing on sample basis the mathematical accuracy of the acquisition cost of film and content rights associated amortisation charge and additions and disposals to third party supporting documents.
Discussing the expectations of the selected films and shows with key personnel including those outside of finance to ensure its consistency of expected performance with key assumptions.
The Company maintains detailed content wise information relating to historical trends and future benefits from content through theatrical sales sale of satellite or television and other forms of monetisation of the content. Determining the overall assumptions used by management for amortisation policy is appropriate based on the expected utilisation of benefits of the underlying content.
Determination of amortisation policy and assessing impairment of content asset involves significant judgement and estimates since it is dependent on various internal and external factors. Assessing management's historical forecasting accuracy by comparing past assumptions to actual outcomes.
The carrying value of the content and film cost were tested for impairment based on the valuation model. We tested the historical data used for valuation challenged the terminal growth and discount rates used and considered the reasonableness of the sensitivity assessment applied.
Because of the significance of the amortisation of content and film rights to balance sheet together with the level of judgement involved make its accounting treatment a significant matter for our audit. The results of the test described as above were satisfactory and amortisation charged for content and film right was found satisfactory.
Trade Receivables
(Refer note 1 and para ‘i' of the significant accounting policies)
The Company is required to regularly assess the recoverability of its trade receivables. Our audit procedures to assess the recoverability of trade receivables included the following:
Tested the accuracy of aging of trade receivables at year end on a sample basis.
Management assesses the level of allowance for expected credit loss required at each reporting date after taking into account the ageing analysis of trade receivables and other historical and current factors specific to individual accounts. Assessed the recoverability of the unsettled receivables on a sample basis through our evaluation of management's assessment with reference to the credit profile of the customers historical payment pattern of customers publicly available information and latest correspondence with customers and to consider if any additional provision should be made.
The recoverability of trade receivables was significant to our audit because of the significance of trade receivables to balance sheet and involvement of significant degree of management judgement involved in evaluating the adequacy of the allowance for expected credit loss. Tested subsequent settlement of trade receivables after the balance sheet date on a sample basis if any.
Circulating and obtaining independent customers confirmation on the outstanding balances on sample basis. Testing the reconciliation if any between the balances confirmed by customer and balance in the books on sample basis.
In assessing the appropriateness of the overall provision for impairment we considered the management's application of policy for recognizing provisions which included assessing whether the calculation was in accordance with Ind AS 109 and comparing the Company's provisioning rates against historical collection data. The results of the test described as above were satisfactory and provision made for expected credit loss/doubtful debt was found satisfactory.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.

Management Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Standalone FinancialStatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and the statement of changes in equity ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards ("Ind AS") specified under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofthe appropriate accounting policies; making judgements and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and fair presentation of thestandalone financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. The Board of Directors are also responsible foroverseeing the Company's financial reporting process.

Auditor's Responsibility

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 inaccordance with SAs we exercise professional judgment and maintain professionalscepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

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

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

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the standalone financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor's report unlesslaw or regulation 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 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 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 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 appears from our examination of those books;

c) The Balance Sheet Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity 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 Companies (Indian Accounting Standards)Rules 2015 as amended;

e) On the basis of written representations received from the directors as on 31 March2019 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2019 from being appointed as a director in terms of Section 164(2) ofthe Act;

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 in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act;

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rules 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 40 to the standalonefinancial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts; and

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

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT ON THE STANDALONE FINANCIALSTATEMENTS OF EROS INTERNATIONAL MEDIA LIMITED

(Referred to in Paragraph 1 under the heading of "Report on other legal andregulatory requirements" of our report of even date)

i) In respect of its Fixed Assets :

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets on the basis of availableinformation.

b. As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.

c. According to the information and explanations given to us the title deeds of allthe immovable properties are held in the name of the Company.

ii) In respect of its inventories:

Accordingly to the information and explanations given to us physical verification ofinventories comprising of VCD/DVD/Audio CD and cost of films acquired have been conductedat reasonable intervals by the management which in our opinion is reasonable havingregard to the size of the Company and nature of its inventories. No material discrepanciesnoticed on such verification of inventories as compared to the book records.

iii) In respect of loans secured or unsecured granted by the Company to companiesfirms limited liability partnerships or other parties covered in the register maintainedunder Section 189 of the Act:

a. In our opinion the terms and conditions of the grant of such loans are prima facienot prejudicial to the company's interest.

b. The schedule of repayment of principal and interest has been stipulated wherein theprincipal and interest amounts are repayable on demand. Since the repayment of such loanshas not been demanded in our opinion the repayment of the principal and interest amountis regular.

c. There is no overdue amount in respect of loans granted to such companies and firms.

iv) In respect of loans investments guarantees and security the Company has compliedwith the provisions of Section 185 and 186 of the Act.

v) According to the information and explanations given to us the Company has notaccepted any deposits within the meaning of provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the rules framed thereunder. Therefore the provisionsof Clause (v) of paragraph 3 of the Order are not applicable to the Company.

vi) To the best of our knowledge and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under sub section (1) of Section 148 ofthe Act in respect of the activities undertaken by the Company. Accordingly the provisionof clause 3(vi) of the order is not applicable.

vii) In respect of Statutory dues :

a. According to the records of the Company undisputed statutory dues including goodsand service tax employee's state insurance provident fund income-tax duty of customsvalue added tax cess and any other statutory dues as applicable to it have not beenregularly deposited to the appropriate authorities and there have been significant delaysin a large number of cases. According to the information and explanations given to usfollowing are the undisputed amounts payable in respect of the aforesaid dues wereoutstanding as at 31 March 2019 for a period of more than six months from the date ofbecoming payable:-

Sr. No. Name of the statute Nature of the dues Amount in lakhs Period to which the amount relates Due Date Date of Payment
1 Income Tax Act 1961 Self-Assessment Tax 2903 Assessment year 2017-18 30-11-2017 Paid र 735 lakhs till date
2 Income Tax Act 1961 Interest on Income Tax 820 Assessment year 2017-18 30-11-2017 Unpaid
3 Income Tax Act 1961 Self-Assessment Tax 526 Assessment year 2018-19 30-11-2018 Unpaid
4 Income Tax Act 1961 Interest on Income Tax 33 Assessment year 2018-19 30-11-2018 Unpaid
5 Income Tax Act 1961 Advance Income Tax 3492 Assessment year 2019-20 15-09-2018 Unpaid
6 Goods and Services Tax Act Goods and Services Tax 444 For the month of July 2018. 20-08-2018 Unpaid
7 Goods and Services Tax Act Interest on Goods and 69 For the year 2017-18 Various dates Unpaid
Services Tax 49 For the month of July 2018. 20-08-2018 Unpaid

b. On the basis of our examination of accounts and documents on records of the Companyand information and explanations given to us upon enquires in this regard the followingare the disputed amounts payable in respect of goods and service tax income tax salestax service tax duty and cess as applicable to it which have not been deposited onaccount of disputed matters pending before the appropriate authorities:-

Sr. No Name of the statute Nature of the dues Amount in lakhs Amount Paid under protest ( A mount in lakhs) Period to which the amount relates Forum where dispute is pending
1 Finance Act 1994 Service Tax Penalties and Interest 34506 1000.00 Various Years From 2009-10 to 2016-2017 Assistant commissioner of sales tax (Appeals)
2 Income Tax Act 1961 Income Tax 68 - Various Assessment Years From 2003-04 to 2016-17 Commissioner of Income Tax (Appeal)
37 - Assessment Year 2004-05 High Court
450 - Assessment Year 2016-17 Commissioner of Income Tax (Appeal)
3 Maharashtra Value Added Tax 2002 Sales Tax 2132 29 Various Years From 2005-06 to 2013-14 Joint Commissioner of sales tax (Appeals)
4 Central Sales Tax Act 1956 Sales Tax 235 165 Various Years From 2005-06 to 2013-14 Joint Commissioner of sales tax (Appeals)

viii. In our opinion and according to the information and explanations given to us theCompany has delayed in repayment of dues to financial institutions banks and governmentduring the year. The lender wise details of the default as on 31 March 2019 is tabulatedas under:-

Name of Bank/ Financial Instituition Nature of default Amount of default Period of default Present status
(in lakhs)
Bank of Baroda Principal 175.00 53 Days Paid
Interest 21.00 39 days 16.06 lakhs Paid
Union Bank of India Principal 33.00 53 Days Not Paid
Interest 8.00 53 Days Not Paid
Dena Bank Principal 42.00 26 Days Paid
Interest 50.00 26 days Paid
I D BI Bank Ltd. Interest 59.00 27 days Paid
Punjab National Bank Principal 33.00 53 Days Not Paid
Interest 23.00 53 Days 1.06 lakhs Paid

ix) The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurpose for which the loans were obtained. x) Based on the audit proceduresperformed for the purpose of reporting the true and fair view of the financial statementsand as per information and explanations given to us no fraud by the Company or on theCompany by its officers or employees has been noticed or reported during the year.

xi) In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii) In our opinion Company is not a nidhi Company. Therefore the provisions of clause(xii) of paragraph 3 of the Order are not applicable to the Company. xiii) In respect oftransactions with related parties: In our opinion and according to the information andexplanations given to us all transactions with related parties are in compliance withSections 177 and 188 of the Act and their details have been disclosed in the financialstatements etc. as required by the applicable Ind AS.

xiv) In our opinion and according to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or of fullyor partly convertible debentures during the year and hence clause (xiv) of paragraph 3 ofthe Order is not applicable to the Company.

xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transaction with the directors or personsconnected with him and covered under Section 192 of the Act. Hence clause (xv) of theparagraph 3 of the Order is not applicable to the Company.

xvi) Based on information and explanation given to us the Company is not required tobe registered under Section 45-IA of the Reserve Bank of India Act 1934.

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT ON THE STANDALONE FINANCIALSTATEMENTS OF EROS INTERNATIONAL MEDIA LIMITED

(Referred to in paragraph 2 (f) under ‘Report on Other Legal and RegulatoryRequirements' of our report of even date) Report on the Internal Financial Controls overFinancial Reporting under Clause (i) of sub-section 3 of Section 143 of the Companies Act2013 ("the Act")

We have audited the Internal Financial Control over financial reporting of ErosInternational Media Limited ("the Company") as of 31 March 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear then ended.

Management Responsibility for the Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by ICAI. 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 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 issued by ICAI and the Standards on Auditing issued by ICAI anddeemed to be prescribed under Section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 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 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.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2019 based on theinternal 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 issued by the ICAI.

For Chaturvedi & Shah LLP

Chartered Accountants

Firm Registration No. 101720W/W100355

Amit Chaturvedi

Partner

Membership No. 103141

Place : Mumbai

Dated : 23 May 2019