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Hindustan Unilever Ltd.

BSE: 500696 Sector: Consumer
NSE: HINDUNILVR ISIN Code: INE030A01027
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OPEN 2401.00
PREVIOUS CLOSE 2444.60
VOLUME 96234
52-Week high 2614.00
52-Week low 1649.70
P/E 81.23
Mkt Cap.(Rs cr) 561,311
Buy Price 2591.15
Buy Qty 12.00
Sell Price 2593.10
Sell Qty 2.00
OPEN 2401.00
CLOSE 2444.60
VOLUME 96234
52-Week high 2614.00
52-Week low 1649.70
P/E 81.23
Mkt Cap.(Rs cr) 561,311
Buy Price 2591.15
Buy Qty 12.00
Sell Price 2593.10
Sell Qty 2.00

Hindustan Unilever Ltd. (HINDUNILVR) - Auditors Report

Company auditors report

TO THE MEMBERS OF HINDUSTAN UNILEVER LIMITED

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the standalone financial statements of HindustanUnilever Limited ("the Company") which comprise the standalone balance sheet asat 31 March 2019 and the standalone statement of profit and loss (including othercomprehensive income) standalone statement of changes in equity and standalone statementof cash flows for the year then ended and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation. In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2019and profit and other comprehensive income changes in equity and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

See note 25 to the standalone financial statements

The key audit matter How the matter was addressed in our audit
Revenue from sale of goods is recognised when control of the products being sold is transferred to the customer and when there are no longer any unfulfilled obligations. The performance obligations in the contracts are fulfilled at the time of dispatch delivery or upon formal customer acceptance depending on customer terms. Our audit procedures included:
• We assessed the appropriateness of the revenue recognition accounting policies including those relating to rebates and discounts by comparing with applicable accounting standards.
Revenue is measured at fair value of the consideration received or receivable after deduction of any trade discounts volume rebates and any taxes or duties collected on behalf of the government such as goods and services tax etc. Accumulated experience is used to estimate the provision for discounts and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur. • Wetestedthedesignimplementationandoperatingeffectivenessofmanagement's general IT controls and key application controls over the Company's IT systems which govern revenue recognition including access controls controls over program changes interfaces between different systems and key manual internal controls over revenue recognition to assess the completeness of the revenue entries being recorded in the general ledger accounting system.
• We tested the design implementation and operating effectiveness of controls over the calculation of discounts and rebates.
• We performed substantive testing by selecting samples of revenue transactions recorded during the year by verifying the underlying documents which included goods dispatch notes and shipping documents.
• We inspected on a sample basis key customer contracts to identify terms and conditions relating to goods acceptance and rebates and assessing the Company's revenue recognition policies with reference to the requirements of the applicable accounting standards.
Rebates and discounts are material and have arrangements with varying terms which are based on annual contracts or shorter term arrangements. In addition • We performed substantive testing by selecting samples of rebate and discount transactions recorded during the year and comparing the parameters used in the calculation of the rebate and discounts with the relevant source documents (including invoices schemes and contracts) to assess whether the methodology
The key audit matter How the matter was addressed in our audit
the value and timing of promotions for products varies from period to period and the activity can span over a year end. There is a risk of revenue being overstated due to fraud including through manipulation of rebates and discounts resulting from pressure the management may feel to achieve performance targets at the reporting period end. adopted in the calculation of the rebates and discounts was in accordance with the terms and conditions defined in the schemes and corresponding customer contract.
• We performed cut-off testing for samples of revenue transactions recorded before and after the financial year end date by comparing with relevant underlying documentation which included goods dispatch notes and shipping documents to assess whether the revenue was recognized in the correct period.
• We assessed manual journals posted to revenue to identify unusual items.

Provisions for taxation litigation and other significant provisionsSee note 9 and 20 to the standalone financial statements

The key audit matter How the matter was addressed in our audit
Accrual for tax and other contingencies requires the Management to make judgements and estimates in relation to the issues and exposures arising from a range of matters relating to direct tax indirect tax transfer pricing arrangements claims general legal proceedings environmental issues and other eventualities arising in the regular course of business. Our audit procedures included:
 

• We tested the effectiveness of controls around the recognition of provisions.

• We used our subject matter experts to assess the value of material provisions in light of the nature of the exposures applicable regulations and related correspondence with the authorities.
The key judgement lies in the estimation of provisions where they may differ from the future obligations. By nature provision is difficult to estimate and includes many variables. Additionally depending on timing there is a risk that costs could be provided inappropriately that are not yet committed. • We challenged the assumptions and critical judgements made by management which impacted their estimate of the provisions required considering judgements previously made by the authorities in the relevant jurisdictions or any relevant opinions given by the Company's advisors and assessing whether there was an indication of management bias.
 

• We discussed the status in respect of significant provisions with the Company's internal tax and legal team.

• We performed retrospective review of management judgements relating to accounting estimate included in the financial statement of prior year and compared with the outcome.

Assessment of contingent liabilities relating to litigations and claimsSee note 24 to the standalone financial statements

The key audit matter How the matter was addressed in our audit
The Company is periodically subject to challenges/scrutiny on range of matters relating to direct tax indirect tax and transfer pricing arrangements. Further potential exposures may also arise from general legal proceedings environmental issues etc. in the normal course of business. Our audit procedures included:
• We tested the effectiveness of controls around the recording and re-assessment of contingent liabilities.
• We used our subject matter experts to assess the value of material contingent liabilities in light of the nature of exposures applicable regulations and related correspondence with the authorities.
Assessment of contingent liabilities disclosure requires Management to make judgements and estimates in relation to the issues and exposures. Whether the liability is inherently uncertain the amounts involved are potentially significant and the application of accounting standards to determine the amount if any to be provided as liability is inherently subjective. • We discussed the status and potential exposures in respect of significant litigation and claims with the Company's internal legal team including their views on the likely outcome of each litigation and claim and the magnitude of potential exposure and sighted any relevant opinions given by the Company's advisors.
• We assessed the adequacy of disclosures made.
• We discussed the status in respect of significant provisions with the Company's internal tax and legal team.
• We performed retrospective review of management judgements relating to accounting estimate included in the financial statement of prior year and compared with the outcome.

Other Information

The Company's management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements andour auditor's report thereon. Our opinion on the standalone financial statements doesnot cover the other information and we do not express any form of assurance conclusionthereon. In connection with our audit of the standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Management's Responsibility for the Standalone FinancialStatements

The Company's management and Board of Directors are responsiblefor the matters stated in section 134(5) of the Act with respect to the preparation ofthese standalone financial statements that give a true and fair view of the state ofaffairs profit/loss and other comprehensive income changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error. In preparing the standalone financialstatements management and Board of Directors are responsible for assessing theCompany'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. Board of Directors is also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.As part of an audit in accordance with SAs we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing 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'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation. We communicate with those charged with governance regardingamong other matters the planned scope and timing of the audit and significant auditfindings including any significant deficiencies in internal control that we identifyduring our audit. We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards. From the matterscommunicated with those charged with governance we determine those matters that were ofmost significance in the audit of the standalone financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in ourauditor's 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 (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of section 143(11) ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143(3) of the Act we report that: a) We havesought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The standalone balance sheet thestandalone statement of profit and loss (including other comprehensive income) thestandalone statement of changes in equity and the standalone statement of cash flows dealtwith by this Report are in agreement with the books of account. d) In our opinion theaforesaid standalone financial statements comply with the Ind AS specified under section133 of the Act. e) On the basis of the written representations received from the directorsas on 31 March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 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 withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

3. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us: i. The Company has disclosed the impact of pending litigationsas at 31 March 2019 on its financial position in its standalone financial statements -Refer Note 24 to the standalone financial statements. ii. The Company has made provisionas required under the applicable law or accounting standards for material foreseeablelosses if any on long-term contracts including derivative contracts- Refer Note 45 tothe standalone financial statements. iii. There has been no delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Company.iv. The disclosures in the standalone financial statements regarding holdings as well asdealings in specified bank notes during the period from 8 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 2019.

4. With respect to the matter to be included in the Auditor'sReport under section 197(16): In our opinion and according to the information andexplanations given to us the remuneration paid by the Company to its directors during thecurrent 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 Affairs has not prescribed other details undersection 197(16) which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W/W-100022
Akeel Master
Partner
Membership No. 046768
Mumbai 03 May 2019

to the Independent Auditor's report on the standalone financialstatements of Hindustan Unilever Limited for the year ended 31 March 2019

(Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets. (b) The Companyhas a regular programme of physical verification of its fixed assets by which all fixedassets are verified in a phased manner over a period of two years. In accordance with thisprogramme a portion of the fixed assets has been physically verified by the managementduring the year and no material discrepancies have been noticed on such verification. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. (c) According to the information andexplanations given to us the title deeds of immovable properties as disclosed in Note 3Ato the standalone financial statements are held in the name of the Company except forthe following:

(Rs crores)

Particulars Leasehold Land Freehold Land Buildings
Gross block as at 31
0.76 0.19 82.13
March 2019
Net block as at 31
0.62 0.19 46.93
March 2019

verified by the management at reasonable intervals during the year. Inour opinion the frequency of such verification is reasonable. In respect of inventorylying with third parties these have substantially been confirmed by them. Thediscrepancies noticed on verification between the physical stocks and the book recordswere not material. (iii) According to information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Act. Accordingly paragraph 3 (iii) of the Order is not applicable to theCompany. (iv) The Company has not granted any loans or provided any guarantees or securityto the parties covered under section 185 of the Act. The Company has complied with theprovisions of section 186 of the Act in respect of investments made or loans or guaranteeor security provided to the parties covered under section 186. (v) According toinformation and explanations given to us the Company has not accepted any deposits fromthe public within the meaning of the directives issued by the Reserve Bank of Indiaprovisions of section 73 to 76 of the Act any other relevant provisions of the Act andthe relevant rules framed thereunder. (vi) We have broadly reviewed the records maintainedby the Company pursuant to the rules prescribed by Central Government for maintenance ofcost records under section 148(1) of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the records. (vii) (a) According to the information andexplanations given to us and the records of the Company examined by us in our opinionthe Company is regular in depositing the undisputed statutory dues including providentfund employees state insurance income tax goods and service tax duty of customs cessprofessional tax and other material statutory dues as applicable with the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of provident fund employees state insurance income tax goodsand service tax duty of customs cess professional tax and other material statutory dueswere in arrears as at 31 March 2019 for a period of more than six months from the datethey became payable. (b) According to the information and explanations given to us thereare no dues of income tax sales tax value added tax service tax goods and service taxduty of customs duty of excise which have not been deposited with the appropriateauthorities on account of any dispute other than those mentioned in Appendix I to thisreport. (viii) According to the information and explanations given to us the Company hasnot taken any loans or borrowings from any financial institution bank or Government norhas it issued any debentures. Accordingly paragraph 3 (viii) of the Order is notapplicable to the Company. (ix) The Company has not raised any moneys by way of initialpublic offer further public offer (including debt instruments) or term loans during theyear. Accordingly paragraph 3 (ix) of the Order is not applicable to the Company. (x)According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year. (xi) According to the information and explanations given to us and based on ourexamination of the records the Company has paid or provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of section 197 readwith schedule V to the Act.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company. Accordingly paragraph 3 (xii) of theOrder is not applicable to the Company. (xiii) According to the information andexplanations given to us and based on our examinations of the records of the Companytransactions with the related parties are in compliance with sections 177 and 188 of theAct where applicable. The details of such related party transactions have been disclosedin the standalone financial statements as required by applicable Indian AccountingStandards. (xiv) According to the information and explanations given to us and based onour examination of the records the

Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company. (xv) According to the information andexplanations given to us and based on our examination of the records the Company has notentered into non-cash transactions with directors or persons connected with him.Accordingly paragraph 3 (xv) of the Order is not applicable to the Company. (xvi) TheCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

APPENDIX I

Name of the Statute Nature of dues Amount Demanded Rs in crores Amount Paid Rs in crores Period to which the amount relates Forum where dispute is pending
Appellate
Central Excise Act 1944 Excise duty (including Interest and penalty if applicable) 105.28 3.71 1982-2018 Authority upto Commissioner's level
Central Excise Act 1944 Excise duty (including Interest and penalty if applicable) 267.52 7.43 1994-2017 Customs Excise and Service Tax Appellate Tribunals of various states
Central Excise Act 1944 Excise duty (including Interest and penalty if applicable) 7.80 - 2003-2010 High Courts of various states
Customs Act 1962 Custom Duty (including Interest and penalty if applicable) 2.29 0.12 2011-2014 Appellate Authority upto Commissioner's level
Customs Act 1962 Custom Duty (including Interest and penalty if applicable) 8.42 0.36 2012-2017 Customs Excise and Service Tax Appellate Tribunals of various states
Central Sales Tax Act 1956 and Local Sales Tax Act Sales tax (including interest and penalty if applicable) 195.32 52.51 1985-2018 Appellate Authority upto Commissioner's level
Central Sales Tax Act 1956 and Local Sales Tax Act Sales tax (including interest and penalty if applicable) 32.84 2.73 1984-2014 Sales Tax Appellate Tribunals of various states
Central Sales Tax Act 1956 and Local Sales Tax Act Sales tax (including interest and penalty if applicable) 133.03 102.36 1977-2018 High Courts of various states
Central Sales Tax Act 1956 and Local Sales Tax Act Sales tax (including interest and penalty if applicable) 24.26 9.40 1985-2017 Supreme Court
Service tax (Finance Act 1994) Service tax (including interest and penalty if applicable) 130.47 5.55 2005-2017 Appellate Authority upto Commissioner's level
Service tax (Finance Act 1994) Service tax (including interest and penalty if applicable) 82.42 6.20 2003-2017 Customs Excise and Service Tax Appellate Tribunals of various states
Goods and Service Tax Act 2017 Goods and Service tax (including interest and penalty if applicable) 0.48 0.01 2018-2019 Appellate Authority upto Commissioner's level
Goods and Service Tax Act 2017 Goods and Service tax 302.09 50.00 2017-2018 Delhi High Court
Income Tax Act 1961 Income Tax (including interest and penalty if applicable) 95.68 - 1979-80 1991 2009-10 Appellate Authority - upto Commissioner's Level
Income Tax Act 1961 Income Tax (including interest and penalty if applicable) 58.00 - 1982-83 2006- 07 2007-08 2011-12 2013-14 Income Tax Appellate Tribunal Mumbai
Income Tax Act 1961 Income Tax (including interest and penalty if applicable) 0.06 - 1963-1964 1982- 1983 Bombay High Court

to the Independent Auditor's report on the standalone financialstatements of Hindustan Unilever Limited for the year ended 31 March 2019

Report on the internal financial controls with reference to theaforesaid standalone financial statements under section 143(3) (i) of the Companies Act2013 (Referred to in paragraph 2(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 tofinancial statements of Hindustan Unilever Limited ("the Company") as of 31March 2019 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 materialrespects an adequate internal financial control system with reference to financialstatements and such internal financial controls were operating effectively as at 31 March2019 based on the internal financial controls with reference to financial statementscriteria established by the Company considering the essential components of internalcontrols stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India (the"Guidance note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors areresponsible for establishing and maintaining internal financial controls based on theinternal financial controls with reference to financial statements criteria established bythe Company considering the essential components of internal control stated in theGuidance Note. 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'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as "the Act").

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to 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 financial statements. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to financial statements were established and maintained andwhether such controls operated effectively in all material respects. Our audit involvesperforming procedures to obtain audit evidence about the adequacy of the internalfinancial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Company's internal financial controlswith reference to financial statements.

Meaning of Internal Financial Controls with reference to FinancialStatements

A company's internal financial controls with reference tofinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. Acompany's internal financial controls with reference to financial statements includethose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of 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 havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference tofinancial statements Because of the inherent limitations of internal financialcontrols with reference to financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W/W-100022
Akeel Master
Partner
Membership No. 046768
Mumbai 03 May 2019