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Healthcare Global Enterprises Ltd.

BSE: 539787 Sector: Health care
NSE: HCG ISIN Code: INE075I01017
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OPEN 241.00
CLOSE 222.35
VOLUME 5540
52-Week high 250.50
52-Week low 109.65
P/E
Mkt Cap.(Rs cr) 2,821
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Healthcare Global Enterprises Ltd. (HCG) - Auditors Report

Company auditors report

To the Members of

Healthcare Global Enterprises Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Healthcare Global EnterprisesLimited ("the Company") which comprise the standalone balance sheet as at 31March 2020 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 2020 and its loss and other comprehensiveloss 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 withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our 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 year.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 Matters.

The key audit matter How the matter was addressed in our audit
Assessment of the Going Concern assumption
Refer note 2(b) to the standalone financial statements In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
The Company has incurred losses in the current year and as at the balance sheet date the Company's current liabilities exceeds its current assets.
The Company has prepared the standalone financial statements on a going concern basis. As part of the assessment of the going concern assumption used in the preparation of the standalone financial statements the Company has considered its cash flow projections and financing plan (including primary equity raised subsequent to balance sheet date) after taking into account the impact of Covid 19 pandemic.
In view of the highly uncertain economic environment and given the significant level of judgement involved in such assessment we have determined this to be a key audit matter. • Obtained the cash flow forecast of the Company and evaluated the reasonableness of key assumptions used in the forecast with reference to our understanding of their business and industry historical trends and underlying business strategies and growth plans;
• Assessed the plans to meet the cash flow requirements:
- Understood the extent of committed and discretionary forecasted expenditure.
- Evaluated the terms of the bank loans and trade finance facilities and assessed availability of funds as per projected cash flows to meet repayment of term loans and payment of interest as scheduled.
- Evaluated the adequacy of projected sources of funds including primary equity raised subsequent to balance sheet date to discharge the obligations of the Company.
• Performed sensitivity analysis of the key assumptions including the possible effects of Covid 19.
• Assessed the adequacy of disclosures in the standalone financial statements in accordance with the relevant accounting standards.
Impairment of goodwill and investments in subsidiaries
A. Impairment of investments in subsidiaries In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
Refer note 3(r) note 8 and note 31 to the standalone financial statements. Investments in subsidiaries is a significant item on the balance sheet for which the Company assesses at each reporting date if there is an indication based on either internal or external sources of information that investments in subsidiaries may be impaired. Where such indicators exist the Company performs impairment testing. • Assessed the appropriateness of accounting policy for impairment of investment in subsidiaries/ goodwill as per relevant accounting standard.
• Evaluated the design and implementation of key internal financial controls relating to impairment process and tested the operating effectiveness of such controls;
In performing such impairment assessment the Company compares the carrying value of investments with their respective recoverable value to determine whether any impairment loss should be recognised. This involves using key assumptions including estimates of revenue growth rate terminal growth rate profitability and the discount rate. • Evaluated the assessment of impairment indicators with respect to investments in subsidiaries considering internal or external sources of information as performed by the Company.
• We assessed the adequacy of level of impairment by:
In view of the significance of the carrying amounts of these assets and significant judgments (including the impact of Covid 19) required to compute recoverable value we have determined this to be a key audit matter. - evaluating with the help of our valuation specialists where required appropriateness of the valuation methodology and of key assumptions specifically those relating to revenue growth rates profitability discount rates and terminal growth rates with reference to our understanding of their business and industry historical trends and underlying business strategies and growth plans;
B. Impairment of goodwill
Refer note 3(h)(ii) note 3(m)(ii) note 6 and note 6A to the standalone financial statements. - performing sensitivity analysis of the key assumptions including the possible effects of Covid 19.
Goodwill is a significant item on the standalone balance sheet for which the Company performs impairment testing at least annually. • Assessed the adequacy of disclosures in the standalone financial statements in accordance with the relevant accounting standards.
In performing such impairment assessment the Company compares the carrying value of each of the identifiable cash generating units ("CGUs") to which goodwill has been allocated with its respective recoverable value to determine whether any impairment loss should be recognised.
The Company's process of assessment of impairment of goodwill is complex as it involves significant judgements and assumptions to estimate the recoverable amount including estimates of revenue growth rate terminal growth rate profitability and the discount rate.
Due to the significance of the carrying amount of goodwill and significant judgments (including the impact of Covid 19) required to compute recoverable value we have determined this to be a key audit matter.
Transition to Ind AS 116 ‘Leases' with effect from 01 April 2019 In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
Refer Note 3(b) and Note 7 to the standalone financial statements.
The Company as a lessee has entered into lease contracts mainly relating to the hospital buildings and office premises with different lease terms including the options to extend or terminate the leases. During the current year the Company has adopted Ind AS 116 Leases (‘Ind AS 116') the new standard on lease accounting. • Assessed the appropriateness of the accounting policy for leases as per relevant accounting standard with special reference to methodology of the selected transition approach to this standard.
Ind AS 116 introduces a new lease accounting model wherein lessee is required to recognise a right-of-use (ROU) asset and a lease liability arising from a lease on its balance sheet. The lease liabilities are initially measured by discounting future lease payments during the lease term as per the contract/ arrangement. * Evaluated the design and implementation of the key internal financial controls in relation to lease identification assessment of the terms and conditions of lease contracts and the calculation of the related lease liability and ROU asset and tested the operating effectiveness of such controls on randomly selected transactions;
The Company has opted for the modified retrospective approach method for transition to Ind AS 116. Therefore the cumulative effect if any of implementing Ind AS 116 up to 01 April 2019 is recognised as an adjustment to the opening balance of retained earnings as at that date and the comparative financial information is not restated. * Tested completeness of the underlying lease data and Ind AS 116 adjustments by reconciling the Company's operating lease commitments as per the standalone financial statements as at 31 March 2019 to data used in computing the ROU assets and related lease liabilities.
* For specific samples selected:
The assessment of the impact of transition to Ind AS 116 is significant to standalone financial statements as it involves selection of the transition option and identification and processing all relevant data associated with the leases which is complex and voluminous. Adoption of the standard involves significant judgements and estimates including determination of the appropriate discount rates and the lease term (including termination and renewal options) for measurement of the ROU asset and lease liability. - Evaluated the reasonableness of Company's key judgements and estimates made in preparing the transition adjustments specifically in relation to the lease term and discount rate. Also took assistance of our valuation specialists to evaluate the reasonableness of the discount rates used in computing the lease liabilities.
In view of the above the adjustments arising from the first-time adoption of Ind AS 116 are considered as a key audit matter. - Evaluated the computation of the ROU asset and lease liability recognised on transition by examining the original lease agreements and re- performing the calculations after considering the impact of the variable lease payments if any.
* Assessed the adequacy of the disclosures relating to leases including disclosures relating to transition in the standalone financial statements in accordance with the relevant accounting standard.

Information Other than the Standalone Financial Statements and Auditors' Report Thereon

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 on the other information that we obtained prior to the date of thisAuditor's Report 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/loss changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Companyhas adequate internal financial controls with reference to the standalone financialstatements in place and the operating effectiveness of such controls.

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

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

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

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

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) 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 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 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 tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer 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 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 as at 31 March 2020 onits financial position in its standalone financial statements - Refer Note 33 to thestandalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the InvestorEducation 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 08 November 2016 to 30 December2016 have not been made in these standalone financial statements since they do not pertainto the financial year ended 31 March 2020.

(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 to the Independent Auditor's Report of Healthcare Global EnterprisesLimited

With reference to the Annexure A referred to in the Independent Auditor's Report to themembers of the Company on the standalone financial statements for the year ended 31 March2020 we report the following:

(i) (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 over a period of 3 years. In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets. Pursuant to the programme certain fixedassets were physically verified during the year. No material discrepancies were noticed onsuch verification.

(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties included in property plant and equipment are held in the name of the Companyexcept the following immovable properties:

Total number of cases Gross block (Rs. in million) Net Block (Rs. in million) Remarks if any
Freehold land -3 cases 132.08 132.08 Company is in the process of obtaining registration.
Building - 3 cases 450.14 342.25 The buildings referred to here are on the freehold land referred above.

ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of such verification is reasonable. The discrepancies noticedon verification between the physical stock and the book records were not material.

(iii) The Company has granted loans to two companies and a Limited LiabilityPartnership (‘LLP') covered in the register maintained under section 189 of theCompanies Act 2013 ("the Act").

(a) In our opinion and according to the information and explanations given to us theterms and conditions on which the loans had been granted to a company and a LLP listed inthe Register maintained under Section 189 of the Act were not prima facie prejudicial tothe Company's interest.

(b) According to the information and explanations given to us for the loans grantedterms and conditions with respect to repayment of principal and payment of interest arenot stipulated. We are therefore unable to make specific comment on the regularity ofrepayment of principal and payment of interest.

(c) For similar reasons as explained in (iii) (b) above in relation to these loans weare unable to make a specific comment on amounts being overdue for more than ninety days.During the earlier years due to the adverse business performance of a subsidiary companythe outstanding loan was fully provided for.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act with respectto the loans given investments made guarantees and securities given.

(v) The Company has not accepted any deposits from the public within the meaning of thedirectives issued by the Reserve Bank of India provisions of Section 73 to 76 of the Actany other relevant provisions of the Act and the relevant rules framed thereunder.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records underSection 148 of the Act 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.

(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 Employees' State InsuranceGoods and Services tax duty of Customs and other material statutory dues have beenregularly deposited during the year by the Company with the appropriate authorities.However undisputed income tax (tax deducted at source) and Provident Fund have not beenregularly deposited with the appropriate authorities though the delays in deposit have notbeen serious. Further as explained to us the Company did not have any dues on account ofSales tax Service tax Duty of excise and Value added tax 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 andServices tax duty of Customs and other material statutory dues were in arrears as at 31March 2020 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofincome Tax or sales Tax or service Tax or duty of customs or duty of excise or value addedtax or goods and service tax which have not been deposited by the Company on account ofdisputes except for the following:

Name of the statute Nature of the dues Amount (Rs. in million) # Period to which the amount relates Forum where dispute is pending
Andhra Pradesh Value Added Tax Act 2005 Value Added Tax 2.50 (0.4)* Financial year 2011-12 to financial year 2014-15 High Court of Judicature at Hyderabad for the state of Telangana and the state of Andhra Pradesh
The Central Excise Act 1944 Excise duty 15.20 (0.6)* April 2009 to March 2014 Central Excise Customs and Service Tax Appellate Tribunal (CESTAT)
The Central Excise Act 1944 Excise duty 13.14 March 2013 to June 2015 Commissioner (Appeals) of Central Excise
The Karnataka Value Added Tax Act 2003 Value Added Tax 29.90 (10.36)* Financial year 2013-14 to financial year 2014-15 Joint Commissioner Department of Commercial Taxes Bangalore
The Central Sales Tax Act 1956 Value Added Tax 18.87 (11.29)* Financial year 2014-15 to financial year 2016-17 Deputy Commissioner of Commercial Taxes Bangalore

* represents amount paid under protest

# the amounts disclosed above includes interest and penalties demanded whereverapplicable.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to financialinstitutions and banks. The Company did not have any outstanding loans or borrowings fromgovernment and there are no dues to debenture holders during the year.

(ix) According to the information and explanations given to us and based on examinationof the records of the Company the term loans obtained during the year were applied forthe purpose for which they were obtained. The Company has not raised any money by way ofinitial public offer or further public offer (including debt instruments) during the year.

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

(xi) In our opinion and according to the information and explanations given to us andbased on examination of the records of the Company the Company has paid/providedmanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us in our opinion theCompany is not a Nidhi Company as prescribed under Section 406 of the Act.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company all transactions with the related parties arein compliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has complied with the provisions ofSection 42 of the Act in respect of preferential allotment of shares during the year.Further according to the information and explanations given to us and based on ourexamination of the records of the Company we report that the amount raised have been usedfor the purpose for which the funds were raised.

(xv) 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 noncashtransactions with directors or persons connected with him.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W/W-100022
Amit Somani
Place: Bengaluru Partner
Date: 28 July 2020 Membership No.060154
UDIN: 20060154AAAAGU5858

Annexure B to the Independent Auditors' report on the standalone financial statementsof Healthcare Global Enterprises Limited for the year ended 31 March 2020.

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

(Referred to in paragraph (2(A)f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to standalone financialstatements of Healthcare Global Enterprises Limited ("the Company") as of 31March 2020 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as at 31 March 2020 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants 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 standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. 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 standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the standalone financial statementswhether due to 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 withreference to standalone financial statements.

Meaning of Internal Financial controls with Reference to Standalone FinancialStatements

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to standalone financial statements include thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; 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 tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W/W-100022
Amit Somani
Place: Bengaluru Partner
Date: 28 July 2020 Membership No.060154
UDIN: 20060154AAAAGU5858

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