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Hindalco Industries Ltd.

BSE: 500440 Sector: Metals & Mining
NSE: HINDALCO ISIN Code: INE038A01020
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OPEN 391.80
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VOLUME 201900
52-Week high 428.30
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P/E 89.76
Mkt Cap.(Rs cr) 88,741
Buy Price 394.45
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Sell Price 394.75
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OPEN 391.80
CLOSE 394.85
VOLUME 201900
52-Week high 428.30
52-Week low 137.10
P/E 89.76
Mkt Cap.(Rs cr) 88,741
Buy Price 394.45
Buy Qty 1.00
Sell Price 394.75
Sell Qty 757.00

Hindalco Industries Ltd. (HINDALCO) - Auditors Report

Company auditors report

To the Members of Hindalco Industries Limited

Report on the audit of the standalone financial statements

Opinion

1. We have audited the accompanying standalone financial statements ofHindalco Industries Limited ("the Company") which comprise the Balance Sheet asat March 31 2020 and the Statement of Profit and Loss (including Other ComprehensiveLoss) the Statement of Changes in Equity and the Statement of Cash Flows for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the 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 March 31 2020and total comprehensive loss (comprising of profit and other comprehensive loss) changesin equity and its cash flows for the year then ended.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Financial 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 thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Key audit matters

4. Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the financial statements of thecurrent period. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Key audit matters How our audit addressed the key audit matters
A. Measurement of inventory quantities of coal bauxite copper concentrate and work in progress consisting of precious metals
Refer Notes 1D (j) and 11 (d) to the standalone financial statements. Our audit procedures relating to the measurement of inventory quantities of coal bauxite copper concentrate and work in progress of precious metals included the following:
Of the Company's ' 11225 crores of inventory on hand at March 31 2020 ' 3255 crores of inventory comprised of coal bauxite copper concentrate and work in progress consisting of precious metals.
• Understanding and evaluating the design and operating effectiveness of controls over physical count and measurement of such inventory;
• Evaluation of competency and capabilities of management's experts;
This was determined a key audit matter as the measurement of these inventory quantities lying at the Company's yards smelters and refineries is complex and involves significant judgement and estimate resulting from measuring the surface area dip measurement of materials in tanks/silos etc.
• Physically observing inventory measurement and count procedures carried out by management using experts to ensure its appropriateness and completeness and performing roll back procedures; and
• Obtaining and inspecting inventory measurement and physical count results for such inventories including assessing and evaluating the results of analysis performed by management in respect of differences between book and physical quantities.
The Company uses internal and external experts as applicable to perform volumetric surveys and assessments basis which the quantity for these inventories is estimated.
Based on the above procedures performed we did not identify any material exceptions in the measurement of inventory quantities of coal bauxite copper concentrate and
Key audit matters How our audit addressed the key audit matters
B. Provisions recognised and contingencies disclosed with regard to certain legal and tax matters
Refer Notes 1D (i) 10 2125 and 45 to the standalone financial statements. Our audit procedures relating to provisions recognised and contingencies disclosed regarding certain legal and tax matters included the following:
As at March 312020 the Company has paid deposits under protest recognised provisions and disclosed contingent liabilities towards various legal and tax matters. There are number of legal direct and indirect tax cases against the Company including environmental mining local and state levies income tax holidays availing of input tax credits etc.
• Understanding and evaluating the design and operating effectiveness of controls over the recognition measurement presentation and disclosures made in the standalone financial statements in respect of these matters;
• Obtaining details of legal and tax matters inspecting the supporting documents to evaluate management's assessment of probability of outcome and the magnitude of potential loss and testing related to provisions and disclosures in the standalone financial statements;
This is a key audit matter as evaluation of these matters requires management judgement and estimation interpretation of laws and regulations and application of relevant judicial precedents to determine the probability of outflow of economic resources for recognising provision and making related disclosures in the standalone financial statements.
• Reviewing orders and other communication from regulatory authorities and management responses thereto;
• Reviewing management expert's legal advice and opinion as applicable obtained by the Company's management for evaluating certain legal matters and evaluating competence and capabilities of the experts; and
• Using auditor's experts for assistance in evaluating certain significant and complex direct and indirect tax matters.
Based on the above procedures performed we did not identify any material exceptions in the provision recognised and contingent liabilities disclosed in the standalone financial statements with regard to such legal and tax matters.
C. Accounting of derivatives and hedging transactions
Refer Notes 1B (Q) 9 20 and 50 to the standalone financial statements. Our audit procedures related to accounting of derivative and hedging transactions included the following:
Company's financial performance is significantly impacted by fluctuations in prices of aluminium copper gold silver furnace oil coal foreign exchange rates and interest rates. The Company takes a structured approach to the identification quantification and hedging of such risks by using various derivatives (e.g. forwards swaps futures options and embedded derivatives) in commodities and/or foreign currencies. These hedges are designated as either cash flow or fair value hedges and in certain cases remain non- designated. • Understanding and evaluating the design and operating effectiveness of controls over accounting of derivative and hedging transactions;
• Testing qualifying criteria for hedge accounting in accordance with Ind AS 109 including:
V Understanding the risk management objectives and strategies for different types of hedging programs;
V Evaluating that the hedging relationship consists only of eligible hedging instruments and hedged items;
V Using auditor's expert for assistance in verifying hedge effectiveness requirements of Ind AS 109 Financial Instruments including the economic relationship between the hedged item and the hedging instrument.
Key audit matters How our audit addressed the key audit matters
As at March 31 2020 the carrying value of the Company's derivatives included derivative assets amounting to ' 957 crores and derivative liabilities of ' 630 crores. • Evaluating competence and capabilities of the auditor's experts;
• Testing appropriateness of hedge accounting to qualified hedge relationships i.e. cash flow and fair value hedges; and
Derivative and hedge accounting is considered a key audit matter because of its significance to the financial statements the volume nature and types of hedging relationships including complexity involved in the application of hedge accounting principles in accordance with Ind AS 109 Financial Instruments.
• Testing related presentation and disclosures in the standalone financial statements.
Based on the above procedures performed we did not identify any material exceptions in the amounts presentation and disclosures made in the standalone financial statements relating to accounting of derivatives and hedging transactions.
D. Assessment of indication of impairment and the recoverable amount (RA) of certain Cash-Generating Units (CGUs) within the Aluminium segment
Refer Notes 1D (a) 2 and 4 to the standalone financial statements. Our audit procedures related to assessment of indication of impairment and RA of these CGUs included the following:
External sources of information such as changes in the market and economic environment including the carrying amount of the net assets of the Company being more than its market capitalisation as at March 31 2020 decline in the Aluminium metal prices and impact of Covid-19 pandemic required Company's management to assess whether there is any indication of impairment and therefore make a formal estimate of RA of certain CGUs within Aluminium segment having carrying value of net assets of ' 30290 crores as at March 31 2020. • Understanding and evaluating the design and operating effectiveness of controls for identification and assessment of any potential impairment including determining the carrying amount and RA of the CGUs;
• Using auditor's experts for testing appropriateness of the method and model used for determining RA mathematical accuracy of the models' calculations and evaluating reasonableness of key assumptions used in future cash flow projections such as future metal prices foreign exchange rates discount rate input costs rate of growth over the estimation period;
Based on such indications impairment testing was performed by the management in accordance with the requirements of Ind AS 36 Impairment of Assets. Management has calculated the RA of the CGUs using value-in-use method. • Evaluating competence and capabilities of the auditor's experts;
• Performing sensitivity analysis over key assumptions to corroborate that RA of these CGUs is within a reasonable range including the impact of Covid-19 pandemic assessment; and
This is a key audit matter because of the significant carrying value of these CGUs and the estimation uncertainty in assumptions used for calculating the RA of the CGUs such as future metal prices foreign exchange rates discount rate input costs and rate of growth over the estimation period.
• Testing related presentation and disclosures in the standalone financial statements.
Based on the above procedures performed we did not note any exceptions in the management's assessment of the indication of impairment and conclusion that the RA of these CGUs within the Aluminium segment were not lower than their respective carrying amounts as at March 312020.

Other information

5. The Company's Board of Directors is responsible for the otherinformation. The other information comprise the information included in the annual reportbut does not include the financial statements and our auditor's report thereon. Theannual report is expected to be made available to us after the date of this auditor'sreport.

Our opinion on the financial statements does not cover the otherinformation and we will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is

materially inconsistent with the standalone financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the annual report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and take appropriate action as applicable under the relevant laws andregulations.

Responsibilities of management and those charged with

governance for the standalone financial statements

6. The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgements and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

7. In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the financial

statements

8. Our objectives are to obtain reasonable assurance about whether thefinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect

120 Annual Report 2019-20

a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

9. As part of an audit in accordance with SAs we exercise professionaljudgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial 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 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 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 conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statements

represent the underlying transactions and events in a manner thatachieves fair presentation.

10. We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

11. We also provide those charged with governance with a statement thatwe have 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.

12. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on other legal and regulatory requirements

13. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in the "Annexure A" a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

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

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss (includingOther Comprehensive Loss) the Statement of Changes in Equity and the Statement of CashFlows dealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act;

(e) On the basis of the written representations received from thedirectors as on March 31 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2020 from being appointed as a director interms of Section 164(2) of the Act;

(f) With respect to the adequacy of the internal financial controlswith reference to financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in Annexure B"; and

(g) 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 litigations on itsfinancial position in its financial statements - Refer Notes 21 and 45 to the standalonefinancial statements;

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts - Refer Notes 20 and 21 to the standalonefinancial statements;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company except amount of' * crore;

iv. The reporting on disclosures relating to Specified Bank Notes isnot applicable to the Company for the year ended March 312020.

* Represents figures below the rounding convention used in this report.

15. The Company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V of the Act.

For Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number: 304026E/E-300009

Sumit Seth

Partner

Membership Number: 105869 UDIN: 20105869AAAAAF8901

Mumbai June 12 2020

ANNEXURE A TO INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 13 of the Independent Auditor's Report ofeven date to the members of Hindalco Industries Limited on the standalone financialstatements for the year ended March 31 2020

i. (a) The Company is maintaining proper records

showing full particulars including quantitative details and situationof fixed assets.

(b) The fixed assets are physically verified by the Managementaccording to a phased programme designed to cover all the items over a period of 3 yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. Pursuant to the programme a portion of the fixed assets has beenphysically verified by the Management during the year and no material discrepancies havebeen noticed on such verification.

(c) The title deeds of immovable properties as disclosed in Note 2 onProperty Plant and Equipment and Note 3 on Investment Property to the standalone financialstatements are held in the name of the Company except for the following:

i. in respect of freehold land (Birla Copper and Muri Unit) havinggross block of ' * crore and building (Birla Copper Units Delhi and Mumbai) havinggross block of ' 11 crores the title deeds of which are held in the name oferstwhile companies which have subsequently been amalgamated with the Company.

ii. in respect of freehold land (Mahan and Kathotia Units) having grossblock of ' 31 crores the title deeds of which are yet to be transferred in thename of the Company; and

iii. in respect of building (Birla Copper Units Mumbai and Delhi)having gross block of ' 18 crores appearing in the fixed asset register the titledeeds for such assets amounting to ' 15 crores are presently not readily availablewith the Company.

* Represents figures below the rounding off convention used in thisreport.

ii. The physical verification of inventory excluding stocks with thirdparties have been conducted at reasonable intervals by the Management during the year. Inrespect of inventory lying with third parties these have substantially been confirmed bythem. The discrepancies noticed on physical verification of inventory as compared to bookrecords were not material.

iii. The Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under Section 189 of the Act. Therefore the provisions of Clause 3(iii)(iii)(a) (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 and 186 of theAct in respect of the loans and investments made and guarantees and security provided byit.

v. The Company has not accepted any deposits from the public within themeaning of Sections 73 74 75 and 76 of the Act and the Rules framed thereunder to theextent notified.

vi. Pursuant to the rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148(1) of the Actin respect of its products.

We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

vii. (a) According to the information and explanations

given to us and the records of the Company examined by us in ouropinion the Company is generally regular in depositing undisputed statutory dues inrespect of provident fund employees' state insurance sales tax income tax servicetax duty of customs duty of excise value added tax cess goods and services tax andother material statutory dues as applicable with the appropriate authorities. Also referNote 31 to the standalone financial statements regarding management's assessment oncertain matters relating to provident fund.

(b) According to the information and explanations given to us and therecords of the Company examined by us there are no dues of income tax which have notbeen deposited on account of any dispute. The particulars of dues of sales tax servicetax duty of customs duty of excise value added tax and goods and services tax as atMarch 31 2020 which have not been deposited on account of a dispute are as follows:

Name of the Statute Nature of Dues ' in crores* Period to which the amount relates Forum where the disputes are pending
Central Sales Tax Act and Local Sales Tax (including VAT) Act Sales Tax 32 1995-2009 2014-2016 Assistant Commissioner/Commissioner/ Deputy Commissioner/Revisionary
Authorities Level/Joint Commissioner/ Additional Commissioner (A)
* 2005-2006 2009-2011 Tribunal
33 1986-1987 1989-1991 1999-2007 2012-2013 High Court
The Central Excise Excise Duty 11 2000-2003 2008-2009 Assistant Commissioner/Commissioner/
Act 1944 2012-2018 Revisionary Authorities Level
1060 2001-2008 Customs Excise and Service Tax Appellate Tribunal (CESTAT)
The Customs Act 1962 Customs

*

2004-2005 Commissioner (Appeal)
Duty 24 2004-2005 2009-2014 Customs Excise and Service Tax Appellate
2016-2017 Tribunal (CESTAT)
The Service Tax under Service Tax 97 2001-2002 2011-2018 Assistant Commissioner/Commissioner/
the Finance Act 1994 Revisionary Authorities Level
329 2004-2018 Customs Excise and Service Tax Appellate Tribunal (CESTAT)
The Central Goods and Goods and 27 2017-2018 High Court
Services Tax Act 2017 Services Tax

* Represents figures below the rounding off convention used in thisReport.

viii. According to the records of the Company examined by us and theinformation and explanations given to us the Company has not defaulted in repayment ofloans or borrowings to any banks financial institutions or dues to debenture holders asat the balance sheet date. The Company does not have any loans or borrowings fromGovernment as at the balance sheet date therefore the provisions of Clause 3(viii) of theOrder to the extent are not applicable to the Company.

ix. In our opinion and according to the information and explanationsgiven to us the moneys raised by way of term loans have been applied for the purposes forwhich they were obtained. The Company has not raised any moneys during the year by way ofinitial public offer and further public offer (including debt instruments).

x. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the Management.

xi. The Company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V of the Act. Also refer paragraph 15 of our main audit report.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014are not applicable to it the provisions of Clause 3(xii) of the Order are not applicableto the Company.

xiii. The Company has entered into transactions with related parties incompliance with the provisions of Sections 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired under Indian Accounting Standard (Ind AS) 24 Related Party Disclosuresspecified under Section 133 of the Act.

xiv. The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of Clause 3(xiv) of the Order are not applicable tothe Company.

xv. The Company has not entered into any non-cash transactions with itsdirectors or persons connected with them to which Section 192 of the Act applies.Accordingly the provisions of Clause 3(xv) of the Order are not applicable to theCompany.

xvi. The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) ofthe Order are not applicable to the Company.

For Price Waterhouse & Co Chartered Accountants LLP

^ Firm Registration Number: 304026E/E-300009

7 Sumit Seth

h Partner

Membership Number: 105869 i UDIN: 20105869AAAAAF8901

3 Mumbai

June 12 2020

ANNEXURE B TO INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 14(f) of the Independent Auditor's Reportof even date to the members of Hindalco Industries Limited on the standalone financialstatements for the year ended March 31 2020

Report on the internal financial controls with

reference to financial statements under Clause (i)

of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference tofinancial statements of Hindalco Industries Limited ("the Company") as of March31 2020 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.

Management's responsibility for internal financial controls

2. The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI).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 Act.

Auditor's responsibility

3. 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 on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing deemed to be prescribed under Section 143(10) of the Act to the extent applicableto an audit of internal financial controls both applicable to an audit of internalfinancial controls and both issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of

internal financial controls with reference to financial statementsassessing 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 financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to financial statements.

Meaning of internal financial controls with reference to

financial statements

6. 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 includesthose 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 to financial statements

7. Because of the inherent limitations of internal financial controlswith reference to 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 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.

Opinion

8. In our opinion the Company has in all material respects anadequate internal financial controls system with reference to financial statements andsuch internal financial controls with reference to financial statements were operatingeffectively as at March 312020 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over

Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number: 304026E/E-300009

Sumit Seth

Partner

Membership Number: 105869 UDIN: 20105869AAAAAF8901

Mumbai June 12 2020