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KRBL Ltd.

BSE: 530813 Sector: Agri and agri inputs
NSE: KRBL ISIN Code: INE001B01026
BSE 00:00 | 22 Sep 272.90 10.25
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NSE 00:00 | 22 Sep 272.75 9.95
(3.79%)
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264.00

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OPEN 263.00
PREVIOUS CLOSE 262.65
VOLUME 35024
52-Week high 306.00
52-Week low 173.45
P/E 11.16
Mkt Cap.(Rs cr) 6,424
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 263.00
CLOSE 262.65
VOLUME 35024
52-Week high 306.00
52-Week low 173.45
P/E 11.16
Mkt Cap.(Rs cr) 6,424
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

KRBL Ltd. (KRBL) - Auditors Report

Company auditors report

To the Members of KRBL Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of KRBL Limited(‘the Company') which comprise the Balance Sheet as at 31 March 2020 the Statementof Profit and Loss (including Other Comprehensive Income) the Cash Flow Statement and theStatement of Changes in Equity for the year then ended and a summary of the significantaccounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (‘Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (‘Ind AS') specified under section 133 of the Act of thestate of affairs of the Company as at 31 March 2020 and its profit (including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (‘ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Emphasis of Matters

4. We draw attention to:

a. Note 41 to the standalone financial statement wherein it is stated that theCommissioner of Income Tax (Appeals) New Delhi vide its order dated 11 March 2020 hasgranted partial relief to the Company from an income tax demand received in the financialyear ended 31 March 2019 and that the Company is in the process of filling an appeal withthe Hon'ble Income Tax Appellant Tribunal for the remaining matters which have beensustained by the Commissioner of Income Tax (Appeals) New Delhi. Based on the legalassessment of the outcome of the Company's appeal against the aforesaid remainingincome-tax demand the management is of the view that no adjustment is required in thestandalone Financial statement.

b. Note 41 to the standalone financial statement wherein it is stated that a portionof land parcels and building thereupon owned by the Company as identified in the aforesaidnote has been attached by the Directorate of Enforcement ("ED") which is beingcontested by the Company. The Company had filed an appeal with the Appellate TribunalPMLA (Government of India) New Delhi ("Appellate Tribunal") and vide its orderdated 17 January 2020 the Appellate Tribunal had ordered to restore the possession infavour of the Company while the aforesaid attachment would continue till the conclusionof the matter. The matter is being contested in the Hon'ble High Court of Delhi by boththe parties as detailed in the aforesaid note. Based on the legal assessment of theoutcome of the aforesaid matter the management is of the view that no adjustment isrequired to the standalone financial statement.

Our opinion is not modified in respect of above matters.

Key Audit Matter

5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

6. We have determined the matters described below to be the key audit matters to becommunicated in our report.

Key audit matter How our audit addressed the key audit matter
Revenue recognition - Sale of Goods Our audit work included but was not limited to the following procedures:
Refer Note 2(g) in the Summary of significant accounting policies and other explanatory information • Obtained an understanding of the process of each revenue stream particularly of sale of rice and by products;
The Company recognised an amount of Rs 449864 lacs revenue for the year ended 31 March 2020 as disclosed in Note 23 to the standalone financial statements. • Evaluated the design and implementation and tested the operating effectiveness of controls over revenue recognition including around quantity sold pricing and accounting of revenue transactions;
Revenue for the Company primarily comprises of revenue from sale of manufactured goods (rice) and by products. • Performed substantive analytical procedures on revenue which includes ratio analysis product mix analysis region wise analysis;
In accordance with Standards on Auditing there is a presumed fraud risk relating to revenue recognition. • Evaluated the terms and conditions of the contracts including incoterms with customers to ensure that the revenue recognition criteria are assessed by the management in accordance with the accounting standards;
Accordingly occurrence and existence of revenue is a key focus area on account of the multiplicity of Company's products multiple channels for sales various categories of customers having varying terms of contracts and the volume of the sales made to them. • On a sample basis tested revenue transactions recorded during the year and revenue transactions recorded in the period before and after year-end with supporting documents such as invoices agreements with customers proof of deliveries and subsequent collection of payment;
Due to the above factors we have identified testing of revenue recognition as a key audit matter. • Performed other substantive audit procedures including obtaining debtor confirmations on a sample basis reviewed the subsequent collection of payment and proof of deliveries document of such selected debtors. Further reconciling revenue recorded during the year with statutory returns;
• Tested on sample basis manual journal entries recorded in revenue accounts credit notes and claims to the relevant approvals and the supporting documents;
• Evaluated disclosures made in the financial statements for revenue recognition from sale of goods for appropriateness in accordance with the accounting standards.
Inventory existence and valuation Our audit work included but was not limited to the following procedures:
Refer Note 2(f) in the Summary of significant accounting policies and other explanatory information. Existence:
• Obtained an understanding of the management's process of inventory management and inventory physical verification performed subsequent to year-end;
Inventory of the Company consists primarily of variety of rice paddy and their by-products manufactured during the process of conversion of paddy into rice. • Evaluated the design effectiveness of controls over inventory management process/ inventory physical verification and tested key controls for their operating effectiveness;
Key audit matter How our audit addressed the key audit matter
The Company held inventories amounting to Rs 285242 as at 31 March 2020. The inventory primarily comprises of Paddy as raw material and finished goods in the form of rice and by-products. • Reviewed the instructions given by senior management to stock count teams including ensuring proper segregation of stock use of calibration scales/charts identification of damaged inventory if any etc.;
Inventory holding is generally significant considering the finished goods are aged for 18-24 months and also due to seasonality of the purchase of paddy. Such inventory is stored in plants warehouses silos and storage bags. High quantity of inventory makes inventory physical verification an extensive procedure for the management at the year end. • Obtained inventory records and results of management conducted count;
• Reviewed reconciliation of differences if any between management physical count and inventory records and tested the necessary adjustment made in the inventory records by the management;
• Appointed an independent firm of Chartered Accountants (‘Independent CA firm') for providing direct assistance in carrying out physical verification of the inventory on a sample basis subsequent to the balance sheet date and supervised and reviewed the work performed by them.
The valuation of finished rice and by products is a comprehensive exercise and is carried out manually.
The valuation process involves estimation around determination of - • Verified movement of the recounted inventory on sample basis between the period between the date of stock take and 31 March 2020 with the supporting documents which includes purchase invoice internal transfer document for production for manufactured goods sales invoice dispatch register gate inward/outward register etc. to substantiate the existence of inventory as at the reporting date;
• Allocable overheads and their absorption rates;
• Determination of net realisable value of byproducts such as husk bran etc and
• Determination of net realisable value of the different variety of finished product. Valuation:
Due to outbreak of the COVID-19 there has been • Obtained an understanding of management process of inventory valuation;
a lockdown enforced in the country near year end and several restrictions were imposed by the government on travel and movement considering public health and safety measures which resulted into complexities for us to observe the physical verification of inventory conducted by the management. This necessitated using alternate audit techniques as further described in our audit procedures. • Evaluated design effectiveness of controls over inventory valuation process and tested key controls for their operating effectiveness;
• Tested inputs into the valuation process from source documents/ general ledger accounts;
• Tested reconciliation of opening inventory purchase/ production sales and year-end inventory to validate the amount of yield during the year and to identify any abnormal production loss;
Accordingly existence and valuation of the year- end inventory balance which is significant with respect to the total assets held by the Company is considered to be one of the areas which required significant auditor attention owing to the complexity and judgements involved in the process of physical count and valuation. • Compared key estimates including those involved in computation of allocable overheads and their absorption rate to prior years and enquired reasons for any significant variations
• Checked net realisable value of by-products from actual sale proceeds near/ subsequent to the year-end;
• Tested arithmetical accuracy of valuation calculations; and
• Evaluated appropriateness of disclosure of inventory year-end balance in the financial statements.

Information other than the Financial Statements and Auditor's

Report thereon

7. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone financial statements and our auditor's report thereon. The Annual Report isexpected to be made available to us after the date of this auditor's report.

Our opinion on the standalone financial statements does not cover the other informationand we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial 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 a material misstatementtherein we are required to communicate the matter to those charged with governance. Wehave nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

8. The accompanying standalone financial statements have been approved by the Company'sBoard of Directors. The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including the IndAS specified under section 133 of the Act. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments 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 statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

9. In preparing the financial statements management is 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.

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

Auditor's Responsibilities for the Audit of the Financial Statements

11. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

12. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control;

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

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern;

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation;

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

14. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

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

Report on Other Legal and Regulatory Requirements

16. As required by section 197(16) of the Act based on our audit we report that theCompany has paid remuneration to its directors during the year in accordance with theprovisions of and limits laid down under section 197 read with Schedule V to the Act.

17. As required by the Companies (Auditor's 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 specified in paragraphs 3 and 4 of the Order.

18. Further to our comments in Annexure A as required by section 143(3) of the Actbased on our audit we report to the extent applicable that:

a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit of theaccompanying standalone financial statements;

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 financial statements dealt with by this report are in agreement withthe books of account;

d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under section 133 of the Act;

e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2020 from being appointed as a director in terms of section 164(2) of the Act;

f) we have also audited the internal financial controls with reference to financialstatements of the Company as on 31 March 2020 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 9 June 2020 as per Annexure B expressed unmodified opinion and;

g) with respect to the other matters to be included in the Auditor's Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. the Company as detailed in note 41 to the standalone financial statements hasdisclosed the impact of pending litigations on its financial position as at 31 March 2020;

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31 March 2020;

iii. t here has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2020 and;

iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Rohit Arora

Partner

Membership No.: 504774

UDIN: 20504774AAAACQ3351

Place: New Delhi

Date: 9 June 2020

Annexure A to the Independent Auditor's Report of even date to the members of KRBLLimited on the standalone financial statements for the year ended 31 March 2020

Annexure A

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed Assets (in the nature of Property plant andequipment and other intangible assets)

(b) The Company has a regular program of physical verification of its fixed assetsunder which fixed assets are verified in a phased manner over a period of three yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. In accordance with this program certain fixed assets were verifiedduring the year and no material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties (which are included under the head‘Property plant and equipment') are held in the name of the Company except for thefollowing properties as disclosed in Note 3(a) to the standalone financial statements:

Particulars Land (freehold) Building
Total number of cases 78 1
Gross block as on 31 March 2020 (' in lacs) 844 153
Net block on 31 March 2020 (' in lacs) 844 150

(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year except for goods-in-transit and stocks lying withthird parties. For stocks lying with third parties at the year-end written confirmationshave been obtained by the management. No material discrepancies were noticed on theaforesaid verification.

(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii)(c) of the Order are not applicable.

(iv) In our opinion the Company has complied with the provisions of Section 186 inrespect of investments. Further in our opinion the Company has not entered into anytransaction covered under Section 185 and Section 186 of the Act in respect of loansguarantees and security.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

(vii) (a) The Company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax goods and services tax cess andother material statutory dues as applicable to the appropriate authorities. Further noundisputed amounts payable in respect thereof were outstanding at the year-end for aperiod of more than six months from the date they become payable.

(b) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:

Name of the statute Nature of dues Amount (Rs in lacs) Amount paid under Protest (Rs in lacs) Period to which the amount relates (Financial year) Forum where dispute is pending
Punjab value Added Tax Act 2005 Value Added Tax 3199 - 2009 - 2010 Hon'ble Punjab and Haryana High Court Chandigarh
Punjab value Added Tax Act 2005 Value Added Tax 1708 641 2005-2007 and 2010-2014 Vat Tribunal Chandigarh.
Punjab value Added Tax Act 2005 Value Added Tax 684 185 2014 - 2017 Deputy Excise and Taxation Commissioner Patiala
Maharashtra value added Tax Act 2002 Value Added Tax 39 39 2014-2016 Deputy Commissioner of Sales Tax (Appeal) Mumbai
Uttar Pradesh value added Tax Act 2008 Value Added Tax 2 1 2017 - 2018 Deputy Commissioner of Sales Tax Greater Noida
Uttar Pradesh value added Tax Act 2008 Value Added Tax 2 2 2013 - 2014 Additional Commissioner Grade-2 (Appeal) Noida
Income-tax Act 1961 Income-tax 9884 21900 2009 to 2016 Income Tax Appellate Tribunal*

* Company is in process of filling an appeal before the Hon'ble Income Tax AppellateTribunal.

(viii) The Company has not defaulted in repayment of loans or borrowings to any bank orfinancial institution during the year. The Company has no loans or borrowings payable togovernment and did not have any outstanding debentures during the year.

(ix) In our opinion the Company has applied moneys raised by way of the term loans forthe purposes for which these were raised. The Company did not raise moneys by way ofinitial public offer or further public offer (including debt instruments).

(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been paid by the Company in accordance with therequisite approvals mandated by the provisions of Section 197 of the Act read withSchedule V to the Act.

(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.

(xv) In our opinion the Company has not entered into any noncash transactions with thedirectors or persons connected with them covered under Section 192 of the Act.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Rohit Arora

Partner

Membership No.: 504774

UDIN: 20504774AAAACQ3351

Place: New Delhi

Date: 9 June 2020

Annexure B to the Independent Auditor's Report of even date to the members of KRBLLimited standalone financial statements for the year ended 31 March 2020

Annexure B

Independent Auditor's Report on the internal financial controls with reference to thestandalone financial statements under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ('the Act')

1. In conjunction with our audit of the standalone financial statements of KRBL Limited(‘the Company') as at and for the year ended 31 March 2020 we have audited theinternal financial controls with reference to financial statements of the Company as atthat date.

Responsibilities of Management and Those Charged with Governance for Internal FinancialControls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal financial controls with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the Company's business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility for the Audit of the Internal Financial Controls withReference to Financial Statements

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India (‘ICAI') prescribed under Section 143(10) of the Act to theextent applicable to an audit of internal financial controls with reference to financialstatements and the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (‘the Guidance Note') issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls withreference to financial statements were established and maintained and if such controlsoperated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements includes obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

6. A Company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to financial statements and such controls were operatingeffectively as at 31 March 2020 based on the internal financial controls with referenceto financial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Rohit Arora

Partner

Membership No.: 504774

UDIN: 20504774AAAACQ3351

Place: New Delhi

#ARStart#

Date: 9 June 2020

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