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Mahindra & Mahindra Ltd.

BSE: 500520 Sector: Auto
NSE: M&M ISIN Code: INE101A01026
BSE 09:30 | 14 Jun 800.50 -8.45
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NSE 09:24 | 14 Jun 804.75 -4.25
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809.00

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OPEN 810.00
PREVIOUS CLOSE 808.95
VOLUME 11319
52-Week high 952.15
52-Week low 457.00
P/E 119.66
Mkt Cap.(Rs cr) 99,518
Buy Price 800.30
Buy Qty 7.00
Sell Price 800.80
Sell Qty 211.00
OPEN 810.00
CLOSE 808.95
VOLUME 11319
52-Week high 952.15
52-Week low 457.00
P/E 119.66
Mkt Cap.(Rs cr) 99,518
Buy Price 800.30
Buy Qty 7.00
Sell Price 800.80
Sell Qty 211.00

Mahindra & Mahindra Ltd. (M&M) - Auditors Report

Company auditors report

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Mahindra & Mahindra Limited("the Company") which comprise the standalone balance sheet as at 31 March2020 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2020 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report.

We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the standalone financial statements under the provisions ofthe Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities 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 on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Description of Key Audit Matter

1. Impairment assessment of long-term investments in subsidiaries jointventures and associates

The key audit matter How the matter was addressed in our audit
The Company has long-term investments in subsidiaries joint ventures and associates (collectively "the investments") aggregating Rs. 17748 crores as at 31 March 2020. The Company records the investments at cost less any provision for impairment loss. Our audit procedures included:
• Assessed the design implementation and operating effectiveness of key controls in respect of the Company's impairment assessment process including the approval of forecasts and valuation models;
Changes in business environment including the economic uncertainty created by the novel corona virus (COVID-19) could have a significant impact on the valuation of these investments. As such the investments are tested for any triggers for impairment. If triggers are identified the recoverable amounts of the investments are determined and if the amount is lower than the carrying value of the investments impairment loss is recognised in the statement of profit and loss. • Tested the key VIU assumptions used in estimating future cash flows such as sales volumes and prices operating costs inflation and growth rates by comparing these inputs with externally derived data past performances consistency with the Board approved investment plans and knowledge of the industry;
• Involved our valuation specialists to evaluate the assumptions including the discount rates used in VIU calculations through external market data;
The recoverable amount is determined as higher of value in use (VIU) or fair value less cost to sell the investment. • Evaluated past performances where relevant and assessed historical accuracy of the forecast used in the VIU calculations; and
Refer note 2(d)(iv) – significant accounting policy for impairment of investments. • Assessed the adequacy of disclosures in the financial statements on key judgements assumptions and quantitative data with respect to impairment losses.

2. Impairment assessment of tangible assets and development expenditurecapitalised and currently under development

The key audit matter How the matter was addressed in our audit
The Company has aggregate tangible assets of Rs. 9178 crores which includes property plant and equipment of Rs. 7981 crores and Rs. 1197 crores of capital-work-in-progress as at 31 March 2020. Further the Company has Rs. 2223 crores of development expenditure capitalised and Rs. 2813 crores of intangible assets under development (collectively "the intangible assets"). Our audit procedures included:
• Assessed the design implementation and operating effectiveness of key controls in respect of the Company's impairment assessment process including the approval of forecasts and valuation models;
• Obtained an understanding of the identification of CGU process;
Changes in business environment including the economic uncertainty created by COVID-19 could have a significant impact on the valuation of the tangible and intangible assets. As such tangible and intangible assets are tested for any triggers for impairment. If triggers are identified the recoverable amounts of the tangible and intangible assets are determined and if the amount is lower than the carrying value of the assets impairment loss is recognised in the statement of profit and loss. • Tested the key VIU assumptions used in estimating future cash flows such as sales volumes and prices operating costs inflation and growth rates by comparing these inputs with externally derived data past performances consistency with the Board approved investment plans and knowledge of the industry;
• Involved our valuation specialists to evaluate the assumptions including the discount rates used in VIU calculation through external market data;
• Evaluated past performances where relevant and assessed historical accuracy of the forecast used in VIU calculations;
The recoverable amount is determined as higher of value in use (VIU) or fair value less cost to sell of the asset or the cash generating unit (CGU) to which the asset belongs. • Evaluated the stage of development of the intangible assets judgments used for expected probable economic benefits and associated expenditures and their assessment of feasibility of the projects; and
Refer note 2(g) – significant accounting policy for impairment of tangible and intangible assets. • Assessed the adequacy of disclosures in the financial statements on key judgements assumptions and quantitative data with respect to impairment losses.

3. Taxes including provision for current tax valuation of uncertain taxpositions and recognition of deferred taxes

The key audit matter How the matter was addressed in our audit
The Company has recorded Rs. 1785 crores of tax expense for the year ended 31 March 2020. Our audit procedures included:
The Company is subject to periodic tax challenges by tax authorities leading to protracted litigations. As such accounting for taxes involves judgment in developing estimates of tax exposures and contingencies in order to assess the adequacy of tax provision. • Assessed the design implementation and operating effectiveness of key controls in respect of the Company's process for recognition of tax expense including uncertain tax positions and deferred taxes;
Further during the year the Company elected to apply the concessional tax regime which resulted in foregoing certain specified tax deductions including Minimum Alternate Tax (MAT) credit and restatement of the deferred tax liabilities on account of change in tax rates. • Inquired and assessed the completeness of uncertain tax positions in conjunction with our tax specialists by considering changes to business and tax legislation through inquiries with the Company and reading of correspondence with authorities relevant recent judicial pronouncements and judgments in similar matters and outcome of past litigations;
The Company has unused tax losses on which it assesses recognition of deferred tax assets. This involves significant judgment including assessment of future taxable profits. • Challenged the Company's judgements on the recognition and recoverability of the deferred tax assets including the deferred taxes arising on unused tax losses; and
Refer note 2(p) – significant accounting policy for income tax. • Assessed the adequacy of the disclosures in the financial statements relating to impact on income taxes and deferred taxes.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon. Our opinion on the standalone financial statements does not cover the otherinformation and we do not express any form of assurance thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

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

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

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

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

• Identify and assess the risks of material misstatement of the standalone financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial statements made by the Management and Board of Directors.
• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the standalone 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's report. However future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation structure and content of the standalone financial statements including the disclosures and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The standalone balance sheet the standalone statement of profit and loss (including other comprehensive income) the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account;
d) In our opinion the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2020 taken on record by the Board of Directors none of the directors is disqualified as on 31 March 2020 from being appointed as a director in terms of section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31 March 2020 on its financial position in its standalone financial statements - Refer Note 39 to the standalone financial statements;
ii. The Company has made provision as required under the applicable law or accounting standards for material foreseeable losses if any on long-term contracts including derivative contracts- Refer Note 18 to the standalone financial statements;
iii. There has been no delay in transferring amounts required 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 as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these financial statements since they do not pertain to the financial year ended 31 March 2020.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under section 197(16) which arerequired to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No. 101248W/W-100022
Jamil Khatri
Partner
Mumbai 12 June 2020 Membership No. 102527
UDIN: 20102527AAAAAZ3690

Annexure A to the Independent Auditors' report on the standalone financial statementsof Mahindra & Mahindra Limited for the year ended 31 March 2020

With reference to the Annexure A referred to in the Independent Auditors' report to themembers of Mahindra & Mahindra Limited (‘the Company') on the standalonefinancial statements for the year ended 31 March 2020 we report the following:

i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a programme of physical verification of its fixed assets by whichall fixed assets are verified once in three years pursuant to which the fixed assets werephysically verified in the financial year ended 31 March 2019 and no materialdiscrepancies were noticed on such verification. All discrepancies have been dealt with inthe books of account.

(c) With respect to immovable properties of acquired land and buildings that arefreehold according to the information and explanations given to us and the recordsexamined by us and based on the examination of the registered sale deed / transfer deed /conveyance deed / court orders approving schemes of arrangements / amalgamations providedto us we report that the title deeds of such immovable properties are held in the nameof the Company as at the Balance Sheet date.

ii. The inventory has been physically verified by the management at reasonableintervals during the year. In our opinion the frequency of such verification isreasonable. The discrepancies noticed on verification between the physical stocks and thebook records were not material and have been suitably adjusted in the books of accounts.

iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act. Accordingly paragraphs 3 (iii) of the Order are not applicable tothe Company.

iv. According to the information and explanations given to us and based on the auditprocedures conducted by us the Company has complied with provisions of Section 185 and186 of the Companies Act 2013 (‘the Act') with respect to granting of loansmaking investment and providing guarantees and securities.

v. According to the information and explanations given to us the Company has notaccepted any deposit during the year and accordingly the compliance with Section 73 and 76of the Act is not applicable. In respect of unclaimed deposits the Company has compliedwith the provisions of Sections 74 and 75 or any other relevant provisions of the Act.According to the information and explanations given to us no order has been passed by theCompany Law Board or the National Company Law Tribunal or the Reserve Bank of India or anyCourt or any other Tribunal on the Company.

vi. We have broadly reviewed the books of accounts maintained by the Company pursuantto the rules prescribed by the Central Government for the maintenance of cost recordsunder Section 148(1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income tax Duty of Customs Duty of Excise Cess Goods and Service Tax andother material statutory dues have been generally regularly deposited during the period bythe Company with the appropriate authorities. According to the information andexplanations given to us there are no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income tax Duty of Customs Duty of Excise Cess Goodsand Service Tax and other material statutory dues that have remained outstanding for morethan six months from the date it became payable.

(b) According to the information and explanations given to us there are no dues ofIncome tax Sales tax Service tax Duty of Customs Duty of Excise Value added taxGoods and Service Tax and other material statutory dues which have not been deposited withthe appropriate authorities on account of any dispute except for the following:

Name of the Statute Nature of Dues Amount (Rs. In crores) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income tax 103.87 AY 2011-12 to AY 2015 -16 Income Tax Appellate Tribunal
3.60 AY 2017-2018 Commissioner of Income tax (Appeals)
0.09 AY 2009-2010 and AY 2012-2013 Assessing Officer
Central Excise Act 1944 Duty of Excise 4.22 2005-2011 High Court
934.00 1991-2016 Appellate Authority-Tribunal
0.05 2009-2013 Appellate Authority-Commissioner

 

Name of the Statute Nature of Dues Amount (Rs. In crores) Period to which the amount relates Forum where dispute is pending
Sales Tax and Value Sales tax 173.78 1994-2016 High Court
Added Tax 27.94 1991-2011 Appellate Authority-Tribunal
632.64 1992-2018 Appellate Authority-Commissioner
4.77 2006-2010 Appellate Authority-Revisional Board
Finance Act 1994 Service tax 33.76 2006-2015 Appellate Authority-Tribunal
0.63 2007 to 2012 Appellate Authority-Commissioner
Customs Act 1962 Duty of Customs 1.49 1996-2001 High Court
1.14 1990-1994 Appellate Authority-Tribunal
1921.98

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowings to financial institutionsbanks and government and outstanding dues to debenture holders during the year.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year.

x. In our opinion and according to the information and explanations given to us theterm loans taken by the Company has been applied for the purpose for which they wereraised.

xi. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any material instances of fraud on the Company by itsofficers or employees noticed or reported during the year nor have we been informed ofany such case by the management.

xii. In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

xiii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3 (xii) of the Order is not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us theCompany has entered into transactions with the related parties in compliance withprovision of Section 177 and 188 of the Act. The details of such related partytransactions have been disclosed in standalone Ind AS financial statements as requiredunder applicable Ind AS.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

xvi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3 (xv)of the Order is not applicable to the Company.

xvii. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company is not required to be registeredunder Section 45 IA of the Reserve Bank of India Act 1934. Accordingly paragraph 3 (xvi)of the Order is not applicable to the Company.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No. 101248W/W-100022
Jamil Khatri
Partner
Mumbai 12 June 2020 Membership No. 102527
UDIN: 20102527AAAAAZ3690

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

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (Referred to in paragraph 2(A)(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date) Opinion

We have audited the internal financial controls with reference to financial statementsof Mahindra & Mahindra Limited ("the Company") as of 31 March 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2020 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").

Auditors' Responsibility

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 Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. 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 were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial 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 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

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

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.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No. 101248W/W-100022
Jamil Khatri
Partner
Mumbai 12 June 2020 Membership No. 102527
UDIN: 20102527AAAAAZ3690

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