To the Members of Himatsingka Seide Limited
Report on the Audit of the Standalone Financial Statements
We have audited the standalone 3nancial statements of Himatsingka Seide Limited("the Company") which comprise the standalone balance sheet as at 31 March2021 and the standalone statement of pro3t and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash 3owsfor the year then ended and notes to the standalone financial statements including asummary of the signi3cant 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 3nancial statements give the information required bythe 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 a3airs of the Company as at 31 March 2021 and pro3t and other comprehensiveincome changes in equity and its cash 3ows for the year ended on that date.
BASIS FOR OPINION
We conducted our audit in accordance with the Standards on Auditing (SAs) speci3edunder 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 3nancialstatements under the provisions of the Act and the Rules thereunder and we have ful3lledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is su3cient and appropriate toprovide a basis for our opinion on the standalone 3nancial statements.
EMPHASIS OF MATTER
We draw attention to Note 1.4 to these standalone 3nancial statements which describesthe Management's assessment and the e3ects of COVID-19 pandemic on the signi3cantestimates and judgements involved in preparation of the standalone 3nancial statements. Inview of the highly uncertain economic environment impacting the textile industry ade3nitive assessment of the impact is highly dependent upon circumstances as they evolvein future and the actual results may di3er from those estimated as at the date of approvalof these standalone 3nancial statements. Based on information available as of this dateManagement believes that no further adjustments are required to the standalone 3nancialstatements.
Our opinion is not modi3ed in respect of this matter.
KEY AUDIT MATTERS
Key audit matters are those matters that in our professional judgement were of mostsigni3cance in our audit of the standalone 3nancial statements of the current year. Thesematters were addressed in the context of our audit of the standalone 3nancial statementsas a whole and in forming our opinion thereon and we do not provide a separate opinionon these matters.
DESCRIPTION OF KEY AUDIT MATTER
|REVENUE RECOGNITION || |
|See note 2.1 and 20 to the standalone 3nancial statements ||In view of the signi3cance of the matter we applied the following audit procedures in this area amongst others to obtain audit evidence: |
|Revenue from the sale of goods in the ordinary course is measured at the fair value of the consideration received or receivable when the goods are delivered and control has passed to the buyer. ||1. We evaluated the revenue recognition accounting policies by comparing it with the applicable accounting standards. |
|Revenue from sale of goods is recognized at the point in time when control is transferred to customer. ||2. We tested the design of key controls and operating e3ectiveness of the relevant key controls with respect to revenue recognition on samples selected on a random basis. |
|We identi3ed revenue recognition as a key audit matter because the Company and its external stakeholders focus on revenue as a key performance indicator. This could result in a risk of revenues being overstated or recognised before control has been transferred. ||3. We performed substantive testing for the revenue transactions using statistical sampling and tested the supporting documents. |
| ||4 We carried out analytical procedures on revenue recognised during the year to identify unusual variances if any and obtained explanations from management. |
| ||5. We tested on a sample basis speci3c revenue transactions recorded before and after the 3nancial year-end date to determine that the period in which the revenue has been recognized is appropriate. |
| ||6. We tested speci3c manual journal entries posted to revenue to identify any unusual items. |
|CARRYING VALUE OF INVESTMENTS IN SUBSIDIARIES AND ASSESSMENT OF IMPAIRMENT || |
|See note 2.14 and 4A to the standalone 3nancial statements ||In view of the signi3cance of the matter we applied the following audit procedures in this area amongst others to obtain audit evidence: |
|The Company has made signi3cant investments in subsidiaries which are recorded at cost less impairment. The investments in subsidiaries are tested for impairment by Management at least annually. The carrying value of investments is dependent on achieving su3cient level of future net cash 3ows. ||1. We tested the design of key controls and operating e3ectiveness of the relevant key controls around the assessment of impairment of investments in subsidiaries. |
|The Company is required to make signi3cant judgement with respect to the impairment if any which is based on the information available with the Company. ||2. We tested the underlying assumptions used by the Company for their assessment of the fair value of the investments. |
|Impairment assessment of investments have been identi3ed as a key audit matter because of the estimation and judgements involved in computation of the fair value of investments. ||4. We together with the valuation specialists tested the key assumptions used by management along with their external experts in computing fair value of investments such as weighted average cost of capital growth rates and pro3tability. |
| ||6. We performed sensitivity analysis on key assumptions used by the Company in computing fair value of the investments to identify impairment charge if any and when identi3ed an appropriate recognition including disclosure of the impairment in the 3nancial statement. |
|RECOGNITION FOR GOVERNMENT GRANTS AND ASSESSMENT OF RECOVERABILITY || |
|See note 2.5 6 and 8 to the standalone 3nancial statements ||In view of the signi3cance of the matter we applied the following audit procedures in this area among other procedures to obtain su3cient audit evidence: |
|The Company is eligible for government grants under various schemes issued by the State and the Central government. ||1. We evaluated the government grant accounting policies by comparing with the applicable accounting standards. |
|Each of these schemes requires ful3lment of conditions by the Company to be eligible to receive grant. The Company also assesses the recoverability of these grants at each balance sheet date. ||2. We tested the design of key controls and operating e3ectiveness of relevant key controls with respect to recognition of grant (including its classi3cation as capital and revenue grant) and assessment of recoverability of government grants. |
|Recognition of grants (including its classi3cation as capital or revenue grant) require a suitable assurance by the Company towards compliance with the conditions speci3ed in the relevant schemes and that the grants will be received. The assessment of ful3lment of relevant conditions speci3ed in the grant at the time of recognition involves signi3cant judgement and assumptions. ||4. We performed substantive testing on a sample basis towards recognition of grants in accordance with the relevant schemes its classi3cation as revenue or capital grant and veri3ed the supporting documents. |
|Further the Company needs to assess at each balance sheet date the recoverability of the grant. ||6. We evaluated the Company's assessment of recoverability of respective grants based on ageing analysis and obtained explanations from management to assess the adequacy of the level of provision if any required for amounts considered recoverable. |
|We have identi3ed recognition of grant and its recoverability as a key audit matter because of the complexities in establishing the compliance with the eligibility conditions of the grant and judgement involved towards the assessment of its recoverability. || |
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 standalone 3nancial statements and our Auditors'Report thereon. The other information is expected to be made available to us after thedate of this Auditor's Report.
Our opinion on the standalone 3nancial 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 3nancial statements our responsibilityis to read the other information identi3ed above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalone3nancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. When we read the annual report if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance and take necessary actions as applicable under the relevant laws andregulations.
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 3nancialstatements that give a true and fair view of the state of a3airs pro3t/loss and othercomprehensive income changes in equity and cash 3ows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) speci3ed 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 judgements and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal 3nancial controls that were operatinge3ectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone 3nancial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone 3nancial 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 ofDirectors is also responsible for overseeing the Company's 3nancial reporting process.
Independent Auditors' Report on the Audit of the Standalone Financial Statements ofHimatsingka Seide Limited for the year ended 31 March 2021 (continued) AUDITOR'SRESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the standalone 3nancialstatements 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 in3uence the economic decisions of users taken on thebasis of these standalone 3nancial statements. As part of an audit in accordance with SAswe exercise professional judgement and maintain professional skepticism throughout theaudit. We also:
Identify and assess the risks of material misstatement of the standalone3nancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is su3cient 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 3nancial controls with reference to standalone 3nancial statements inplace and the operating e3ectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone 3nancial statements madeby 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 signi3cant doubton the Company's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our Auditor's Report to therelated disclosures in the standalone 3nancial 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 standalone3nancial statements including the disclosures and whether the standalone 3nancialstatements 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 signi3cant audit 3ndings including anysigni3cant de3ciencies 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 signi3cance in the audit of the standalone 3nancial 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 bene3ts of such communication.
Independent Auditors' Report on the Audit of the Standalone Financial Statements ofHimatsingka Seide Limited for the year ended 31 March 2021 (continued) REPORT ON OTHERLEGAL AND REGULATORY REQUIREMENTS
1) As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143 (11) of the Act we givein the "Annexure A" a statement on the matters speci3ed in paragraphs 3 and 4 ofthe Order 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 pro3t and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash 3ows dealt with by this Report are in agreement with thebooks of account.
d) In our opinion the aforesaid standalone 3nancial statements comply with the Ind ASspeci3ed 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 is disquali3edas on 31 March 2021 from being appointed as a Director in terms of Section 164(2) of theAct.
f) With respect to the adequacy of the internal 3nancial controls with reference tostandalone 3nancial statements of the Company and the operating e3ectiveness 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 2021 onits 3nancial position in its standalone 3nancial statements - Refer Note 28 to thestandalone 3nancial statements;
ii) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
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 3nancial statements regarding holdings as well asdealings in speci3ed bank notes during the period from 8 November 2016 to 30 December 2016have not been made in these standalone 3nancial statements since they do not pertain tothe 3nancial year ended 31 March 2021. C) With respect to the matter to be included in theAuditors' Report under Section 197(16): In our opinion and according to the informationand explanations given to us the remuneration paid by the Company to its directors duringthe current year is in accordance with the provisions of Section 197 of the Act. Theremuneration paid to any director is not in excess of the limit laid down under Section197 of the Act. The Ministry of Corporate A3airs has not prescribed other details underSection 197(16) which are required to be commented upon by us.
Annexure - A to the Independent Auditors' Report on the standalone 3nancial statementsof Himatsingka Seide Limited for the year ended 31 March 2021
With reference to the Annexure A referred to in paragraph 1 in Report on Other Legaland Regulatory Requirements of the Independent Auditor's Report to the members ofHimatsingka Seide Limited (the Company') on the standalone 3nancial statements forthe year ended 31 March 2021 we report that:
i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its 3xed assets.
b) The Company has a regular programme of physical veri3cation of its 3xed assets bywhich all 3xed assets are veri3ed in a phased manner over a period of two years. In ouropinion this periodicity of physical veri3cation is reasonable having regard to the sizeof the Company and the nature of its assets. Pursuant to the programme certain 3xedassets were physically veri3ed during the year. No material discrepancies were noticed onsuch veri3cation.
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 Company.
ii) The inventory except goods-in-transit and stocks lying with third parties hasbeen physically veri3ed by the Management during the year. In our opinion the frequencyof such veri3cation is reasonable. The discrepancies noticed on veri3cation between thephysical stock and the book records were not material and have been appropriately dealtwith in the books of accounts. For stocks lying with third parties at the year-endwritten con3rmation have been obtained by the Management.
iii) a) During the current year the Company has not granted any loans secured orunsecured to companies 3rms limited liability partnerships or other parties covered inthe register maintained under section 189 of the Act. Accordingly provisions of Clause3(iii) (a) is not applicable to the Company. However in the earlier years the Companyhad given unsecured loans to two of its subsidiaries of which loan aggregating to INR25258.17 lakhs (excluding accrued interest of INR 7618.44 lakhs) to one of thesubsidiary has been converted into equity during the year and loan to another subsidiaryaggregating to INR 577.75 lakhs has been written o3 during the year (refer Note 5.1 to the3nancial statements).
b) According to the information and explanations given to us the aforesaid interest onloan amounting to INR 7618.44 lakhs is repayable on demand. We are informed that theCompany has not demanded payment of said interest during the year and thus there hasbeen no default on the part of the party to whom the money was lent. The interest (whichwas repayable on demand) relating to loan written o3 during the year (refer above) hasbeen paid by the subsidiary.
c) There are no overdue amounts in respect of the aforesaid interest.
iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto the investments made and guarantees given. Further there are no loans and securitygiven in respect of which provisions of Section 185 and 186 of the Act are applicable.
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.Accordingly paragraph 3(v) of the Order is not applicable to the Company. vi) We havebroadly reviewed the books of account maintained by the Company pursuant to the rulesprescribed by the Central Government of India for maintenance of cost records underSection 148 of the Act in respect of products manufactured and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. Howeverwe have not made a detailed examination of the 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 Provident fund Employee's StateInsurance Income tax duty of Customs Goods and Services Tax Cess and any othermaterial statutory dues have generally been regularly deposited during the year by theCompany with the appropriate authorities. As explained to us the Company did not have anydues on account of Sales-tax Service-tax Duty of excise and Value added tax during theyear. According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employee's State Insurance Income tax duty ofCustoms Goods and Services Tax Cess and any other material statutory dues were inarrears as at 31 March 2021 for a period of more than six months from the date theybecame payable. As explained to us the Company did not have any dues on account ofSales-tax Service-tax Duty of excise and Value added tax.
b) According to the information and explanations given to us there are no dues ofIncome-tax Goods and Services tax Sales tax Service tax Duty of customs Duty ofexcise or Value added tax which have not been deposited by the Company on account ofdisputes except for the following:
Annexure-A to the Independent Auditors' Report (continued)
|Name of the statute ||Nature of the dues (as demanded) ||Amount (in INR) ||Period to which amount relates to ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income Tax ||3333 64887270 ||AY 2006-07 2009-10 and 2013-14 ||Income Tax Appellate Tribunal Kolkata |
|Income Tax Act 1961 ||Income Tax ||3333 33463992 ||AY 2010-11 2014-15 and 2016-17 ||Commissioner of Income Tax (Appeals) Kolkata |
|Central Excise Act1994 ||Excise duty and penalty ||53079936 ||FY 2003-04 to FY 2008-09 ||Commissioner of Customs Bengaluru |
|Central Excise Act1994 ||Excise duty and penalty ||333333 2186141 (500000)* ||Feb 2009 to Dec 2009 ||Commissioner of Customs Bengaluru |
|Central Excise Act1994 ||Excise duty and penalty ||11624025 (967767)* ||FY 2012 - 2016 ||Commissioner of Customs Bengaluru |
*represents amounts paid under protest viii) In our opinion and according to theinformation and explanations given to us the Company has not defaulted in repayment ofloans or borrowings to 3nancial institutions and banks. The Company does not have anyoutstanding loans or borrowings from government and there are no dues to debenture holdersduring 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 o3er or further public o3er (including debt instruments) during the year.
x) According to the information and explanations given to us no fraud by the Companyor no material fraud on the Company by its o3cers or employees has been noticed orreported during the course of our audit.
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 requisite approvals mandated by the provisions ofSection 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. Accordinglyparagraph 3(xii) of the Order is not applicable to the Company.
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 3nancial statements as required by theapplicable Indian 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 not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.
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 non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable to the Company.
xvi) According to the information and explanation given to us and in our opinion theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.
Annexure-B to the Independent Auditors' Report on the standalone 3nancial statements ofHimatsingka Seide Limited for the year ended 31 March 2021.
Report on the internal 3nancial controls with reference to the aforesaid standalone3nancial 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 3nancial controls with reference to standalone 3nancialstatements of Himatsingka Seide Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the standalone 3nancial statements of the Company for theyear ended on that date.
In our opinion the Company has in all material respects adequate internal 3nancialcontrols with reference to standalone 3nancial statements and such internal 3nancialcontrols were operating e3ectively as at 31 March 2021 based on the internal 3nancialcontrols with reference to standalone 3nancial 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 3nancial controls based on the internal 3nancial controls withreference to standalone 3nancial 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 3nancial controls that were operating e3ectively for ensuring the orderly ande3cient 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 3nancial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").
Our responsibility is to express an opinion on the Company's internal 3nancial controlswith reference to standalone 3nancial statements based on our audit. We conducted ouraudit in 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 3nancialcontrols with reference to standalone 3nancial statements. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal 3nancial controlswith reference to standalone 3nancial statements were established and maintained andwhether such controls operated e3ectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal 3nancial controls with reference to standalone 3nancial statements and theiroperating e3ectiveness. Our audit of internal 3nancial controls with reference tostandalone 3nancial statements included obtaining an understanding of such internal3nancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating e3ectiveness of internal control based on the assessedrisk. The procedures selected depend on the auditor's judgement including the assessmentof the risks of material misstatement of the standalone 3nancial statements whether dueto fraud or error.
We believe that the audit evidence we have obtained is su3cient and appropriate toprovide a basis for our audit opinion on the Company's internal 3nancial controls withreference to standalone 3nancial statements.
MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE FINANCIALSTATEMENTS
A company's internal 3nancial controls with reference to standalone 3nancial statementsis a process designed to provide reasonable assurance regarding the reliability of3nancial reporting and the preparation of standalone 3nancial statements for externalpurposes in accordance with generally accepted accounting principles. A company's internal3nancial controls with reference to standalone 3nancial statements include those policiesand procedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly re3ect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of standalone 3nancial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material e3ecton the standalone 3nancial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONEFINANCIAL STATEMENTS
Because of the inherent limitations of internal 3nancial controls with reference tostandalone 3nancial 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 3nancial controlswith reference to standalone 3nancial statements to future periods are subject to the riskthat the internal 3nancial controls with reference to standalone 3nancial 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
Firm's Registration Number. 101248W/W-100022
Membership No. 205385
ICAI UDIN: 21205385AAAAAQ8533
Date: 29 May 2021