To the Members of GE Power India Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
We have audited the standalone financial statements of GE Power India Limited("the Company") which comprise the standalone balance sheet as at 31 March2021 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone 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 together with theethical requirements that are relevant to our audit of the standalone 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 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.
Description of Key Audit Matter
|The key audit matter ||How the matter was addressed in our audit |
|Revenue recognition || |
|A significant portion of Company's business comprises long-term projects including construction-type and fixed price projects. ||In view of the significance of the matter following audit procedures were applied in this area amongst others to obtain sufficient and appropriate audit evidence: |
|Revenue from these contracts is recognized in accordance with accounting policies as detailed in "significant accounting policies" in the standalone financial statements ||a) Obtained an understanding of the processes adopted to carry out accounting for revenue on "over the time" basis. |
|There are various complexities judgements and estimates involved in accounting for revenue recognized on "over the time" basis including: ||b) Tested key controls (both design and operating effectiveness) over project accounting from initiation to recording on the above- mentioned projects. |
| Estimation of total contract costs at inception and remaining costs to completion. ||c) For selected contracts (selected on the basis of size of contracts quantum of changes in margins completion progress and other relevant criteria) tested the following: |
| Assessment of various risks emanating from operational delays contract terms changes in estimations. This requires the Company to estimate various costs to capture such risks including liquidated damages and warranties. ||- Examined contracts its significant terms and conditions correspondences with customers; |
| Accounting for variations and claims including timing of recognition ||- Evaluated various assumptions and estimates including estimated contract revenue/ costs risk provisions contract variation claims provision for liquidated damages contract modifications etc; |
|Revenues contract costs and resultant margin recognition may deviate significantly from original estimates. Such deviations may be caused due to inherent risks in this business or resulting from possible effects of the ongoing COVID -19 pandemic. ||- In respect of contracts with significant changes in margins during the year read the "project management review" documents (as evidence of project reviews) wherever available. Discussed with project controllers the reasons for such changes in revenues/ costs; |
|In view of above we determined this area to an area involving significant risk and an area of audit focus and accordingly a key audit matter. ||- Obtained a detailed breakdown of the total estimated costs to completion for contracts in progress during the year and compared actual costs incurred involving estimates of cost incurred at the reporting date. Tested cost of sales by applying sampling methodology. |
|Tax (including litigations) || |
|The Company's operations are subject to complexities arising from applicability of various laws and regulations with respect to positions on matters relating to income tax sales tax goods and services tax service tax excise customs etc. (either past or present). ||In view of the significance of the matter following audit procedures were applied in this area amongst others to obtain sufficient and appropriate audit evidence: |
|Provision for taxes is recognized or contingent liabilities are disclosed in accordance with accounting policies as detailed in "significant accounting policies" in the standalone financial statements. ||a) We obtained an understanding of the key uncertain tax positions based on list of ongoing litigations and tax computations for the current year. |
|Judgment is required in assessing the range of possible outcomes for some of these matters. These judgments could change over time as each of the matter progresses depending on experience on actual assessment proceedings by tax and other authorities and other judicial precedents. ||b) Tested key controls (both design and operating effectiveness) over estimate of provisions for various taxes. |
|The Company makes an assessment to determine the outcome of these tax positions and decides to make an accrual or consider it to be a possible contingent liability. In particular this affects the measurement and accuracy of provision for taxes. ||c) We analysed the Company's judgment regarding the eventual resolution of matters with various tax authorities. In this regard we understood how the Company has considered past experience where available with the authorities in the respective jurisdictions. |
|Due to above mentioned factors we have determined this to be a key audit matter ||d) We have involved our tax specialists to evaluate and assessed the estimates on the basis of the facts of the case internal evaluations legal precedence assumptions made and judicial |
|Recoverability of Trade Receivables || |
|Trade receivables including retention money with customers which is significant part of the total assets of the Company. ||In view of the significance of the matter following audit procedures were applied in this area amongst others to obtain sufficient and appropriate audit evidence: |
|Impairment loss on trade receivables is recognized in accordance with accounting policies as detailed in "significant accounting policies" in the financial statements. ||a) Obtained an understanding of the processes implemented to estimate impairment provision against trade receivables. |
|Customer contracts typically involve time consuming and complex conditions around closure of contracts including technical acceptances which lead to longer and significant time for realization of receivables. ||b) Tested key controls (both design and operating effectiveness) over estimation of impairment loss. |
|As a result of above assessment of realizability of trade receivables involves critical evaluation of various factors including impact of external environment. ||c) Evaluated the "expected credit loss" model adopted to estimate the impairment allowance and tested the related computations. |
|The Company makes as impairment allowance for specific customers on the basis of case to case analysis. It further makes an estimate of impairment allowance for balance receivables on the basis of an "expected credit loss" model in accordance with Ind AS 109 Financial Instruments. The Company further considers impact of external environment such as possible effect from the COVID-19 pandemic. ||d) Obtained and tested the base data used in the above-mentioned model such as trade receivables ageing and evaluated the various judgement and assumption applied. |
|In view of above we determined this area to an area of audit focus and accordingly a key audit matter. || |
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 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 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. We have nothing to report in thisregard.
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 company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the 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) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".
(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and
Auditors) Rules 2014 in our opinion and to the best of our information and accordingto the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31 March 2021 onits financial position in its standalone financial statements - Refer Note 41 to thestandalone financial statements;
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts- Refer Note 28 to the standalone financial statements;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2021.
(C) With respect to the matter to be included in the Auditors' Report under section197(16):
In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.
Annexure A referred in the Independent Auditor's Report
TO THE MEMBERS OF GE POWER INDIA LIMITED ON THE STANDALONE FINANCIAL STATEMENTS FOR THEYEAR ENDED 31 MARCH 2021.
We report that:
i. (A) According to the information and explanations given to us the Company hasmaintained proper records showing full particulars including quantitative details andsituation of fixed assets (property plant and equipment and intangible assets).
(B) According to the information and explanations given to us the fixed assets arephysically verified by the management in accordance with a phased programme designed tocover all items of fixed assets over a period of three years which in our opinion isreasonable having regard to the size of the Company and nature of its fixed assets. Inaccordance with this programme a portion of fixed assets has been physically verified bythe management during the year. As informed to us no material discrepancies were observedon such verification.
(C) According the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of the immovable properties areheld in the name of the Company except the following land (and buildings appurtenantthereto) held in erstwhile name of the Company for which name change is in process:
(Amount in million)
|Name of the property ||Gross Block as at 31 March 2021 ||Accumulated Depreciation as at 31 March 2021 ||Net Block as at 31 March 2021 |
|Freehold Land ||3.2 ||- ||3.2 |
|Factory Building ||90.9 ||76.3 ||14.6 |
|Office Building ||14.6 ||12.5 ||2.1 |
|Total ||108.7 ||88.8 ||19.9 |
ii. According to the information and explanations given to us the inventories(excluding goods in transit and inventories lying with third parties) have been physicallyverified by the management during the year. In our opinion the frequency of suchverification is reasonable. For inventories lying with third parties substantiallywritten confirmations have been obtained. Further as informed the discrepancies noticedon verification between the physical inventory and the book records were not material.
iii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies or other parties covered in theregister maintained under Section 189 of the Act. Further there are no firms and limitedliability partnerships covered in the register required under Section 189 of the Act.Accordingly para 3 (iii) of the Order is not applicable.
iv. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has complied with the provisions ofSection 185 and 186 of the Act with respect to loans and investments made. The Companyhas not given any guarantee and security during the year.
v. According to the information and explanations given to us the Company has notaccepted any deposits covered under Section 73 to 76 of the Act.
vi. We have broadly reviewed the books of account maintained by the Company in respectof products and services where pursuant to the rules made by the Central Government themaintenance of cost records has been prescribed under sub section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. However we have not made a detailedexamination of such records with a view to determine whether they are accurate orcomplete.
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 Employees' StateInsurance Income tax Duty of Customs Goods and Service tax Cess and any other materialstatutory dues to the extent applicable have generally been regularly deposited with theappropriate authorities during the year.
According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income tax Goods andService tax Duty of Customs Cess and other material statutory dues to the extentapplicable were in arrears as at 31 March 2021 for a period of more than six months fromthe date they became payable.
(B) According to the information and explanations given to us and on the basis of therecords of the Company examined by us there are no dues of Income-tax Sales-tax Servicetax Goods and Service Tax Duty of Customs Value Added Tax and Duty of Excise which havenot been deposited with the appropriate authorities on account of any dispute except asmentioned below:
|Particulars ||Nature of Statutory dues ||Amount of dispute ||Amount paid ||Period to which it relates ||Forum where dispute is pending |
| || ||(Rs. in million) * ||(Rs. in million) || || |
| || ||884.4 ||- ||2014-152015-1 April 15 to Sep 15 ||Tax Officer |
| || ||237.1 ||4.5 ||2010-11 ||Assessing officer |
| || ||19.4 ||33.8 ||2008-092009 102013-142016-17 ||First Appellate authority |
| || ||56.4 ||15.4 ||2011-122012 132004-05 ||Second Appellate Authority |
| || ||30.7 || |
|2011-15 ||Appeal before Joint Commissioner |
| || ||68.9 ||- ||2011-15 ||High Court |
|Central Sales Tax and Local Sales Tax Acts (including works contract tax) ||Sales tax || |
|0.6 ||2012-13 ||Commissioner Appeal |
| || ||13.9 ||- ||2012-2013 ||Tribunal Sales Tax WB |
| || ||- ||1.4 ||2014-15 ||Tribunal |
| || ||66.3 ||1.1 ||2014-152015162016-17 April 17 to June 17 ||Dy.Comm. Ahmedabad |
| || ||77.9 ||3.9 ||2014-152015-16 ||Dy.Comm. Pithoragarh |
| || ||90.1 ||- ||2005-08 ||Tax Officer |
| ||Works contract tax matter ||23.8 ||- ||1993-94 to 96-97 ||Second Appellate Authority |
| || ||25.1 ||- ||1984-891992-97 ||High Court |
| || ||2.9 ||- ||2011 to 2015 ||Commissioner Appeal |
| || ||6.8 ||- ||2014-15 ||Tribunal CESTAT |
| ||Central Excise ||50.5 ||6.4 ||1979-811984 852001-042007-08 ||Second Appellate Authority |
|Central Excise Act 1944 || ||1.2 ||- ||1986-90 ||High Court |
| || ||69.0 ||8.6 ||1994-97 ||Adjudicating Authority |
| || ||35.2 ||- || ||Audit Officer |
| ||Central Excise Rule 6(3A) ||68.3 ||8.9 ||2016-17 June-2015 to March 2016 ||Commissioner Appeal |
| || ||280.6 ||10.4 ||2011 to 2015 ||Tribunal CESTAT |
| || ||33.3 ||2.5 ||2006-08 ||Second Appellate Authority |
| || ||0.7 ||- ||2007-08 & 2008-09 ||First Appellate authority |
|Finance Act 1994 ||Service tax ||0.9 || ||Apr'16 to Jun'17 ||Assistant Comm. CGST & Central Excise Vadodara |
| || ||19.1 || |
|Jan-2010 to Oct- 2014 ||Tribunal CESTAT |
| || ||7.5 ||- ||Nov-2014 to March-2016 ||Commissioner Appeal |
|DGFT ||Duty drawback ||18.3 ||- ||2009-2010 ||Hon'ble Supreme Court |
|Goods and Services Tax Act ||GST ||1.4 ||- ||2017-18 ||Tax Officer |
|Income Tax Act 1961 ||Income tax ||1287.83 ||100 ||2002-032007 082009-102010 112011-122012 13.2013-142014-15 ||ITAT |
| || ||305.50 ||- ||2015-16 ||Dispute resolution panel |
* amount as per demand orders including interest and penalty wherever indicated in theorder.
viii. According to the information and explanations given to us the Company has notdefaulted in repayment of loans to banks. Further according to the information andexplanations given to us and on the basis of our examination of records of the Companythe Company did not have any outstanding dues to government financial institution anddebenture holders during the year.
ix. According to the information and explanations given to us the Company did notraise any money by way of initial public offer or further public offer (including debtinstrument) and any term loans during the year. Accordingly paragrapRs. 3 (ix) of theOrder is not applicable.
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 year.
xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/ provided for managerialremuneration in accordance with the provisions of Section 197 read with Schedule V to theAct.
xii. According to the information and explanations given to us the Company is not aNidhi Company. Accordingly paragrapRs. 3(xii) of the Order is not applicable.
xiii. According to information and explanations given to us and on the basis of ourexamination of the records of the Company all transactions with the related parties arein compliance with Section 177 and 188 of the Act where applicable and the details havebeen disclosed in the standalone financial statements as required by the applicableaccounting standards.
xiv. According to information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragrapRs. 3(xiv) of the Order is notapplicable.
xv. According to information and explanations given to us the Company has not enteredinto any noncash transactions with directors or persons connected with him. AccordinglyparagrapRs. 3(xv) of the Order is not applicable.
xvi. According to information and explanations given to us the Company is not requiredto be registered under Section 45-IA of the Reserve Bank of India Act 1934.
Annexure B referred in the Independent Auditor's Report
ON THE STANDALONE FINANCIAL STATEMENTS OF GE POWER INDIA LIMITED FOR THE PERIOD ENDED31 MARCH 2021.
Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Subsection 3 of Section 143 of the Companies Act2013
(Referred to in paragraph (2A(f)) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
We have audited the internal financial controls with reference to financial statementsof GE Power India Limited ("the Company") as of 31 March 2021 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2021 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 on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").
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 audit opinion on the Company's internal financial controls withreference to financial statements.
MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE FINANCIALSTATEMENTS
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 andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the Standalone financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONEFINANCIAL STATEMENTS
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 & Co. LLP |
| ||Chartered Accountants |
| ||Firm's Registration No.: 101248W/ W100022 |
| ||Adhir Kapoor |
| ||Partner |
|Place: New Delhi ||Membership No.: 098297 |
|Date: 22 June 2021 ||UDIN: 21098297AAAABN7655 |