TO THE MEMBERS OF
GLOBAL VECTRA HELICORP LIMITED
Report on the Audit of the Ind-AS Financial Statements
We have audited the accompanying Ind-AS financial statements of GLOBAL VECTRAHELICORP LIMITED ("the Company") which comprise the Balance Sheet asat March 31 2020 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity the Statement of Cash Flows for the year thenended and the Notes to the Ind-AS financial statements including a summary of significantaccounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section of our report the aforesaid Ind-AS financial statements give theinformation required by the Companies Act 2013 (the Act) in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (India Accounting Standard) Rules2015 as amended (Ind-AS) and with other accounting principles generally accepted inIndia of the state of affairs of the Company as at March 31 2020 the profit totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for Qualified Opinion
As detailed in Note no. 41 to the Ind-AS Financial Statements a customer has disputedservice tax levied by the Company on reimbursement of expenses aggregating to Rs. 300.30Lakhs (service tax liability Rs. 238.52 Lakhs upto June 30 2017 and GST liability Rs.61.78 Lakhs from July 2017 onwards). No provision has been made by the Company in respectof such outstanding as required by the accounting policies of the Company. HoweverManagement believes that the Company has a strong case to collect the outstanding amounts.In the absence of a balance confirmation or other evidence we are unable to comment onthe recoverability of these amounts. Had the Company made the provision the loss for theyear would have been higher by Rs. 300.30 Lakhs and Trade Receivables as at that datewould have been lower by Rs. 300.30 Lakhs.
We conducted our audit of the Ind-AS financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Ind-AS Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the Ind-AS financial statements under the provisions of theCompanies Act 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our qualified opinion.
Emphasis of Matter
We draw attention to Note no. 39 to the Ind-AS Financial Statements in respect of theorder received from the Office of the Commissioner of Customs (Preventive) confirming thedemand for differential duty of customs along with penalty Rs. 2621.95 lakhs. Noprovision has been made by the Company for the same nor the interest due thereon as atMarch 31 2020 as the Management believes based on a decision in the previous year fromCustoms Excise and Service Tax Appellate Tribunal (CESTAT) West Zonal Bench in favour ofthe Company on a similar matter and an opinion from an external legal expert that thedemand will be set aside by a higher appellate authority. Our report is not modified inrespect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind-AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind-AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
In addition to the matter described in the Basis for Qualified Opinion section we havedetermined the matters described below to be the key audit matters to be communicated inour report.
|Sr. No. Key audit matter description ||How the scope of our audit addressed the key audit matter |
|1. Revenue recognition and measurement ||Our procedures included: |
|Refer to Note 1 (Statement of Significant Policies) for revenue recognition and measurement Note 27 of the financial statements for aggregate revenue recognised as required by the applicable Ind-AS. As at March 31 2020 the Company recognised revenues aggregating to INR 45665.93 lakhs. Service income and reimbursement of expenses is recognised as and when services are rendered in accordance with the terms of the specific contracts net of all contractual deductions. Revenue is recognised net of all taxes and levies. Unbilled revenue represents services rendered for which billing is pending at the end of the reporting period. There may be a risk of revenue being overstated due to pressure from Management to achieve performance targets at the reporting period end. ||Accounting policies: |
Accounting Assessing the Company's revenue recognition policies.
| ||Tests of controls: |
Evaluating the design and testing the operating effectiveness of controls over the accuracy and correct timing of revenue recognition.
| ||Tests of details: - |
Verifying the supporting documentation for determining that the revenue was recognised in the correct accounting period. -Verifying the manual journals posted to revenue to identify unusual or irregular items. -To assess the recoverability of trade receivables our procedures included an assessment of whether the provision against or write off impacted our view as to the initial recognition of the related revenue.
| ||Performing substantive analytical procedures |
We also assessed as to whether the disclosures in respect of revenue were adequate.
|2. Impairment ||Our procedures included: |
|As on March 31 2020 the Written Down Value of Property Plant and Equipment amounted to Rs. 24265.78 lakhs which includes Written Down Value of Helicopters amounting to Rs. 23670.17 lakhs as disclosed in note 2A to the financial statements. ||Evaluating the key controls and processes with regard to identification of impairment indications. Evaluating the key inputs and assumptions considered for cash flow forecasts for estimating the value in use'. |
|The Company reviews the carrying amount of its helicopters on an annual basis to determine if there is an indication of impairment. ||Assessing the accuracy of the value in use' model by assessing the methodology applied in determining the value in use compared with the requirements of Ind-AS 36 Impairment of Assets' and checking the integrity of the value in use' model. |
|Management prepares an impairment assessment for helicopters as required under Ind-AS which is based on a value in use calculation. Management has concluded that there is no impairment as on March 31 2020. ||Evaluating whether the Management's judgements used for impairment assessment are supportable by considering our knowledge of the business. |
|The value in use is determined by discounting the estimated future cash flows of helicopters to present value using various estimates and assumptions and discount rate. || |
|Risk identified: || |
|This impairment assessment is sensitive to changes in assumptions (in particular the discount rate and the assumptions underlying future operating cash flows) which involves areas of judgement by the Management. The impairment assessment requires management to consider both internal and external sources of information in determining whether there is any indication that any helicopter may have been impaired. || |
|3. First time adoption of Ind-AS 116 - Leases ||Our audit procedures included but were not limited to: |
|The Company leases helicopters hangar and administrative building and office premises. The Company has applied Ind-AS 116 from the application date (April 1 2019) using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported as per Ind-AS 17. The Company assesses whether a contract is or contains a lease at the inception of a contract. The Company has elected not to recognise right-of-use assets and lease liabilities for short term leases that have a lease term of less than or equal to 12 months with no purchase option and leases of low value assets. ||Testing that the Company's accounting policies are in compliance with requirements of Ind-AS 116 including consideration of exemptions and practical expedients exercised. Testing the completeness of the data and validating the eligibility of the aircraft and other leases covered under the provisions of Ind-AS 116 and assessed Management judgements used in determining the classification of leases exemptions and practical expedients exercised. Performing tests of details to examine the inputs used for determining right of use assets and lease liabilities related to lease contracts with underlying lease agreements and performing computation checks on the amount of lease liability and the right to use tracing of the same to underlying contracts / documents. Assessing the inputs used for determination of the incremental borrowing rate including assessment of lease term by reference to the underlying lease contracts and market data. |
|The first-time adoption of the standard resulted in the recognition as at April 1 2019 of Right of Use of Rs. 35076.36 lakhs a lease liability amounting to Rs. 34469.26 lakhs lease receivable amounting to Rs. 7166.86 lakhs provision for cost to restore the Helicopter amounting to Rs. 54.27 lakhs and decrease in retained earnings of Rs. 9.80 lakhs. || |
|We considered the first-time application of the standard as a key audit matter on aircraft and other leases (including the judgement corresponding tax treatment) due to significant required in the assumptions and estimates used to determine the Right of Use (ROU) asset and lease liability viz assessment of lease term determination of appropriate incremental borrowing rate which involves a significant degree of Management judgement in interpreting the various relevant rules regulations and practices. ||Assessing as to whether the disclosures as per the requirements of Ind-AS 116 - Leases are adequate. |
|4. Inventories ||Our procedures included: |
|As at March 31 2020 the value of inventory held by the Company was Rs. 2494.47 lakhs as disclosed in note 8 to the financial statements. |
There is significant management judgement in assessing which items may be slow-moving or obsolete. No provision has been made for the old inventories.
|Management has undertaken technical review of such old inventories which comprises of critical components general spares and specialist tools which have an indefinite shelf life and certified that the inventory is still in useable condition and not redundant. We evaluated that these inventories are useable on the existing fleet of helicopters and also for repair operations. |
|5. Actuarial Obligations ||Our procedures included: |
|There is significant judgement involved calculating the closing defined benefit liability and long term compensated absences. ||We obtained the actuarial valuations prepared by Management's experts and agreed the project unit methodology used to be appropriate. |
|Whilst management utilises the service of third party actuarial advisors to determine their key assumptions there is a risk that the discount rate rate of inflationand mortality assumptions used in the calculation are inappropriate. ||We assessed the appropriateness and adequacy of the disclosures in respect of the defined benefit liability in Note 43 of the Financial Statements and found these to be satisfactory and aligned to the requirements of Ind-AS 19. |
Information Other than the Ind-AS financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Director's Report Management Discussion and Analysis Report andReport on Corporate Governance but does not include the Ind-AS financial statements andour auditor's report thereon. These reports are expected to be made available to us afterthe date of this auditor's report.
Our opinion on the Ind-AS financial statements does not cover the other information andwe do not express any form of conclusion thereon.
In connection with our audit of the Ind-AS financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the Ind-AS financial statements or our knowledge obtained inthe audit 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.
Responsibilities of Management and Those Charged with Governance for the Ind-ASFinancial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind-AS financial statements that give a true and fair view of the financialposition financial performance changes in equity and the cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards 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 wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind-AS financial statementsthat give a true and fair view and are from material misstatement whether due to fraud orerror.
In preparing the Ind-AS financial statements Management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless Managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Ind-AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Ind-AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind-AS 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 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 theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of the usersof the financial statements may be influenced.We consider quantitative materiality andqualitative factors in (i) planning the scope of our audit work and in evaluating theresults of our work; and (ii) to evaluate the effect of any identified misstatements inthe Ind-AS financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Ind-AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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
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 Companies Act 2013 we give in the Annexure a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
As required by section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b) Except for the effects of the matter described in the Basis of Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account.
d) In our opinion except for the effects of the matter described in the Basis ofqualified opinion paragraph above the aforesaid Ind-AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with relevant rulesissued there under.
e) On the basis of the written representations received from the Directors of theCompany as on March 31 2020 taken on record by the Board of Directors none of theDirectors of the Company are disqualified as on March 31 2020 from being appointed as aDirector in terms of Section 164 (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 A".
g) According to information and explanations given to us and based on our examinationof the records of the Company the Company has paid / provided managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 of theAct.
h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations financial position inits Ind-AS financial statements its Refer Note 36 and 39 to the Ind-AS financialstatements.
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 19 20 26 and 51 to the Ind-AS financial statements. iii)There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
For KALYANIWALLA & MISTRY LLP
Firm Regn. No.: 104607W / W100166
Daraius Z. Fraser
M. No.: 42454
Mumbai: August 21 2020
Annexure to the Independent Auditor's Report
The Annexure referred to in paragraph 1 under Report on Other Legal andRegulatory Requirements' in our Independent Auditors' Report to the members of the Companyon the Financial Statements for the year ended March 31 2020:
Statement on Matters specified in paragraphs 3 and 4 of the Companies (Auditor'sReport) Order 2016:
1. Fixed Assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets. However due to Covid-19 pandemic and subsequent lock down announcedby the Government of India the Management was unable to conduct the asset verificationwhich was planned at the end of the year.
c) According to the information and explanations given to us and on the basis of therecords examined by us the title deeds of immovable properties are held in the name ofthe Company.
2. We have been informed that the Management has conducted physical verification ofinventory at reasonable intervals. However the process of physical verification needs tobe formally documented. No material discrepancies were noticed on such verification. Dueto Covid-19 pandemic and subsequent lock down announced by the Government of India wewere not in a position to attend the physical verification of inventories scheduled tohave been conducted at the year end.
3. During the year the Company has not granted any loans secured or unsecured tocompanies firms LLP or other parties covered in the register maintained under Section189 of the Companies Act 2013. Therefore the provisions of sub-clauses (a) (b) and (c)of paragraph 3 (iii) of the Order are not applicable.
4. According to the information and explanations given to us the Company has notadvanced any loans or given guarantee or provided any security to parties covered undersection 185 of the Companies Act 2013.
5. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of Sections 73 to76 or any other relevant provisions of the Companies Act 2013 and the rules framed thereunder.
6. According to the information and explanations given to us the Central Governmenthas not prescribed maintenance of cost records under sub section (1) of section 148 of theCompanies Act 2013 in respect of any of the activities of the Company.
7. Statutory Dues:
a) According to the information and explanations given to us and on the basis of therecords examined by us the Company is generally regular in depositing undisputedstatutory dues including dues pertaining to Investor Education and Protection FundProvident Fund Employees' State Insurance Income-tax Goods and Service Tax Sales-taxService Tax Duty of Customs Duty of Excise Value added tax Cess and any otherstatutory dues with the appropriate authorities wherever applicable except few cases wherethere have been slight delays. We have been informed that there are no undisputed dueswhich have remained outstanding as at the last day of the financial year for a period ofmore than six months from the date they became payable except:
|Name of the Statute ||Nature of Dues ||Amount (Rs. in Lakhs) ||Period to which the amount relates ||Due Date ||Date of Payment |
|The Finance Act 1994 ||Service tax ||65.57 ||2012-13 ||Various ||Not yet paid |
|The Finance Act 1994 ||Service tax ||88.07 ||2013-14 ||Various ||Not yet paid |
|The Finance Act 1994 ||Service tax ||25.97 ||2014-15 ||Various ||Not yet paid |
|The Finance Act 1994 ||Service tax ||147.22 ||2015-16 ||Various ||Not yet paid |
|The Finance Act 1994 ||Service tax ||23.80 ||2016-17 ||Various ||Not yet paid |
|The Finance Act 1994 ||Service tax ||12.25 ||2017-18 ||Various ||Not yet paid |
|Goods and Service Tax Act ||Goods and Service tax ||16.13 ||2017-18 ||Various ||Not yet paid |
|Goods and Service Tax Act ||Goods and Service tax ||231.73* ||2018-19 ||Various ||Not yet paid |
|Goods and Service Tax Act ||Goods and Service tax ||4.46 ||2019-20 ||Various ||Not yet paid |
been passed by Advance Ruling Authority in favour of the Company.
|Name of the Statute ||Nature of Dues ||Amount (Rs. in Lakhs) ||Period to which the amount relates ||Forum where dispute is pending |
|The Finance Act ||Service Tax ||87.79 ||April 2011 to March 2012 ||CESTAT (Appeals) |
|1994 ||Penalty ||458.12 || || |
|Customs Act 1962 ||Customs duty Penalty ||2121.95 (Includes amount aggregating to Rs. 538.26 Lakhs paid as duty under protest) 500.00 ||2007-08 ||CESTAT (Appeals) |
According to the information and explanations given to us there are no dues ofIncome-tax Goods and Service Tax Sales tax Service tax Duty of Customs Value addedtax or Cess outstanding on account of any dispute other than the following:
8. According to the information and explanations given to us and based on the documentsand records produced before us there has been no default in repayment of dues tofinancial institutions or banks. There are no dues to debenture holders or Government.
9. According to the information and explanations given to us and the records examinedby us the term loans obtained by the Company were applied for the purpose for which theloans were obtained. The Company did not raise any money by way of initial public offer orfurther public offer (including debt instruments) during the year.
10. During the course of our examination of the books of account and records of theCompany to the best of our knowledge and belief and according to the information andexplanations given to us by the Management no fraud on or by the Company has beennoticed or reported during the year.
11. 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 requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.
12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company; hence the provisions of Clause 3(xii) of the Order are notapplicable to the Company.
13. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Financial Statements as required by the applicableaccounting standards.
14. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly the provisions of Clause 3(xiv) of the Order are not applicable tothe Company.
15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with Directors or persons connected with him. Accordingly the provisions ofClause 3(xv) of the Order are not applicable to the Company.
16. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.
For KALYANIWALLA & MISTRY LLP
Firm Regn. No.: 104607W / W100166
Daraius Z. Fraser
M. No.: 42454
Mumbai: August 21 2020
Annexure A to the Independent Auditor's Report
Referred to in Paragraph 2(f) Report on Other Legal and Regulatory Requirements'in our Independent Auditor's Report to the members of the Company on the Ind-AS FinancialStatements for the year ended March 31 2020.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of section143 of the Companies Act 2013.
We have audited the internal financial controls with reference to financial statementsof GLOBAL VECTRA HELICORP LIMITED
("the Company") as of March 31 2020 in conjunction with our audit of theFinancial Statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India (ICAI). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information as required under the Companies Act 2013 (the "Act" orthe "Companies 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 issued by ICAI anddeemed to be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements was established and maintainedand if such controls operated effectively in all material respects. Our audit involvesperforming procedures to obtain audit evidence about the adequacy of the internalfinancial controls system with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.
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 systemwith reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
A Company's internal financial control 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 control withreference 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 authorizations of management and directors of the company; and
3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to financialstatements
Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our knowledge and according to the explanations given tous the Company has in all material respects an adequate internal financial controlssystem with reference to with reference to financial statements were operating effectivelyas at March 31 2020 based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India.
For KALYANIWALLA & MISTRY LLP
Firm Regn. No.: 104607W / W100166
Daraius Z. Fraser
M. No.: 42454
Mumbai: August 21 2020