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Mahindra & Mahindra Financial Services Ltd.

BSE: 532720 Sector: Financials
NSE: M&MFIN ISIN Code: INE774D01024
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OPEN 154.60
PREVIOUS CLOSE 154.40
VOLUME 199292
52-Week high 224.15
52-Week low 112.80
P/E 56.71
Mkt Cap.(Rs cr) 19,058
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 154.60
CLOSE 154.40
VOLUME 199292
52-Week high 224.15
52-Week low 112.80
P/E 56.71
Mkt Cap.(Rs cr) 19,058
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mahindra & Mahindra Financial Services Ltd. (M&MFIN) - Auditors Report

Company auditors report

To the Members of

Mahindra & Mahindra Financial Services Limited

Report on the Audit of the Standalone Financial Statements

OPINION

We have audited the standalone financial statements of Mahindra &Mahindra Financial Services Limited ("the Company”) which comprise thestandalone balance sheet as at 31 March 2020 and the standalone statement of profit andloss (including other comprehensive income) standalone statement of changes in equity andstandalone statement of cash flows for the year then ended and notes to the standalonefinancial statements including a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the Standalone FinancialStatements”).

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 (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 31 March 2020and profit and other comprehensive income changes in equity and its cash flows for theyear ended on that date.

BASIS FOR OPINION

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

emphasis of matter

As described in Note 50.2 (i) to the standalone financial statementsin respect of accounts overdue but standard at 29 February 2020 where moratorium benefithas been granted the staging of those accounts as on 31 March 2020 is based on the dayspast due status as on 29 February 2020 in accordance with the Reserve Bank of IndiaCOVID-19 Regulatory Package. Further as described in Note 50.2 (ii) to the standalonefinancial statements the extent to which the COVID-19 pandemic will impact the Company'sfinancial performance is dependent on future developments which are highly uncertain. Ouropinion is not modified in respect of the above matters.

KEY AuDIT MATTERS

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements of thecurrent year. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

description of key audit matter

Impairment Loss Allowance

Refer notes 2.11 (h) and 50.2 to the Standalone Financial Statements

The key audit matter How the matter was addressed in our audit
The Company has recognized impairment loss allowance of Rs. 308948.66 lakhs as at 31 March 2020 and has recognized an expense for Rs.121710.59 lakhs in its statement of profit and loss. We performed the following key audit procedures:
• Performed process walkthroughs to identify the key systems applications and controls used in the impairment allowance processes.
The determination of impairment loss allowance is inherently judgmental and relies on managements' best estimate due to the following:
• Assessed the design and implementation of controls in respect of the Company's impairment allowance process such as the timely recognition of impairment loss the completeness and accuracy of reports used in the impairment allowance process and management review processes over the calculation of impairment allowance and the related disclosures on credit risk management.
v Increased level of data inputs for capturing the historical data to calculate the Probability of Default ('PDs') and Loss Given Default (“LGD”) and the completeness and accuracy of that data
• Use of management overlays for considering the probability weighted scenarios the forward looking macro-economic factors economic environment and the timing of cash flows • Obtained understanding of management's revised processes systems and controls implemented in relation to impairment allowance process particularly in view of staging freeze as on 29 February 2020 as per board approved policy read with RBI COVID-19 regulatory package
• Criteria selected to identify significant increase in credit risk particularly in respect of moratorium benefit given to eligible borrowers as per the Company's board approved policy read with the RBI COVID 19 regulatory package.
• Tested the relevant general IT and applications controls over key systems used in the impairment allowance processes.
• In relation to COVID-19 pandemic judgements and assumptions include the extent and duration of the pandemic the impacts of actions of governments and other authorities and the responses of businesses and consumers in different industries along with the associated impact on the global economy • Evaluated whether the methodology applied by the Company is compliant with the requirements of the relevant accounting standards and confirmed that the calculations are performed in accordance with the approved methodology including checking mathematical accuracy of the workings.
• Tested the periods considered for capturing underlying data as base to PD and LGD calculations are in line with Company's recent experience of past observed periods.
The underlying forecasts and assumptions used in the estimates of impairment loss allowance are subject to uncertainties which are often outside the control of the Company. The extent to which the COVID-19 pandemic will impact the Company's current estimate of impairment loss allowances is dependent on future developments which are highly uncertain at this point. Given the size of loan portfolio relative to the balance sheet and the impact of impairment allowance on the financial statements we have considered this as a key audit matter.
• Tested the accuracy of the key inputs used in the calculation and independently evaluated the reasonableness of the assumptions made.
• Challenged completeness and validity of management overlays particularly in response to COVID 19 with assistance of our financial risk modelling experts by critically evaluating the risks that have been addressed by management through overlays and also considering whether there are other risks not captured which require additional overlays. We also tested management's workings supporting the overlay quantum.
• Assessed whether the disclosures on key judgements assumptions and quantitative data with respect to impairment loss allowance in the financial statements are appropriate and sufficient.

OTHER INFORMATION

The Company's management and Board of Directors are responsible for theother information. The other information comprises the information included in theCompany's annual report but does not include the financial statements and our auditors'report thereon.

Our opinion on the Standalone Financial Statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Financial Statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONEFINANCIAL STATEMENTS

The Company's management and Board of Directors are responsible for thematters stated in section 134(5) of the Act with respect to the preparation of theseStandalone Financial Statements that give a true and fair view of the state of affairsprofit and other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Standalone Financial Statements management and Boardof Directors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OFTHE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Financial Statements.

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

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

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

v Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Standalone 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 conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance 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.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' 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

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

(A) 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 have beenkept by the Company so far as it appears from our examination of those books;

c) The standalone balance sheet the standalone statement of profit andloss (including other comprehensive income) the standalone statement of changes in equityand the standalone statement of cash flows dealt with by this Report are in agreement withthe books of account;

d) In our opinion the aforesaid Standalone Financial Statements complywith the Ind AS specified under section 133 of the Act;

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

f) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B”.

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

i. The Company has disclosed the impact of pending litigations as at 31March 2020 on its financial position in its Standalone Financial Statements - Refer Note44 to the Standalone Financial 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 Note 48 to the Standalone FinancialStatements;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

(C) With respect to the matter to be included in the Auditors' Reportunder section 197(16):

In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

For B S R & Co. LLP.
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Venkataramanan Vishwanath
Partner
Membership No: 113156
ICAI UDIN: 20113156AAAACM7045
Mumbai
15 May 2020

Annexure A to the Independent Auditor's Report - 31 March 2020

The Annexure referred to in Independent Auditor's Report to the membersof the Company on the financial statements for the year ended 31 March 2020 we reportthat:

i. (a) The Company has maintained proper records showing fullParticulars including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the managementaccording to a programme of phased verification which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programmethe fixed assets have been physically verified by management during the year and nomaterial discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.

ii. The Company is in the business of providing Non-Banking FinanceServices and consequently does not hold any inventory. Accordingly paragraph 3(ii) ofthe Order is not applicable to the Company.

iii. According to the information and explanations given to us andbased on the audit procedures conducted by us the Company has not granted any loanssecured or unsecured to companies firms limited liability partnerships or other partiescovered in the register maintained under section 189 of the Act. Accordingly paragraph3(iii) of the Order is not applicable to the Company.

iv. According to the information and explanations given to us and basedon the audit procedures conducted by us the provisions of section 185 are not applicableto the Company. The Company has complied with the provisions of section 186 of the Act tothe extent applicable.

v. The Company is a Non-Banking Finance Company and consequently isexempt from provisions of section 73 74 75 and 76 of the Act. Accordingly paragraph3(v) of the Order is not applicable to the Company.

vi. According to the information and explanations given to us theCentral Government has not prescribed the maintenance of cost records under section 148(1)of the Act for any activities conducted/ services rendered by the Company. Accordinglyparagraph 3(vi) of the Order is not applicable to the Company.

vii. (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company amounts deducted / accruedin the books of account in respect of undisputed statutory dues including provident fundemployees' state insurance income-tax goods and service tax cess and other materialstatutory dues have generally been regularly deposited during the year by the Company withthe appropriate authorities. As explained to us the Company does not have any dues onaccount of sales tax service tax duty of customs duty of excise and value added tax.According to the information and explanations given to us and on the basis of ourexamination of the records of the Company no undisputed amounts payable in respect ofprovident fund employees' state insurance income-tax goods and service tax cess andother material statutory dues were in arrears as at 31 March 2020 for a period of morethan six months from the date they become payable.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the following dues have notbeen deposited by the Company on account of any disputes.

c) According to the records examined by us and as per the informationand explanations given to us there are no statutory dues outstanding as at March 31 2020which have not been deposited on account of disputes except for those stated below:

Name of the statute Nature of dues Amount (Rs. in Lakhs) Period to which the amount relates Forum where dispute is pending
The Income Tax Act 1961 Income Tax 259.58 2002-2003 Commissioner of Income Tax (Appeals)
The Income Tax Act 1961 Income Tax 7383.00 2016-2017 Commissioner of Income Tax [Appeals]
Finance Act 1994 Service Tax 4039.90 2007-2012 Customs Excise And Service Tax Appellate Tribunal (CESTAT)
Finance Act 1994 Service Tax 109.27 2012-13 Customs Excise And Service Tax Appellate Tribunal (CESTAT)
Finance Act 1994 Service Tax 27.75 2013-14 Customs Excise And Service Tax Appellate Tribunal (CESTAT)
Finance Act 1994 Service Tax 4.13 2014-15 Customs Excise And Service Tax Appellate Tribunal (CESTAT)
Andhra Pradesh Value Added Tax Value Added Tax 123.57 April 2008 - October 2013 Andhra Pradesh High Court
Madhya Pradesh Value Added Tax Value Added Tax 0.42 2013-2014 Appellate Authority of Commercial Taxes Bhopal
Madhya Pradesh Value Added Tax Value Added Tax 1.35 2014-2015 Appellate Authority of Commercial Taxes Bhopal
Madhya Pradesh Value Added Tax Value Added Tax 2.44 2015-2016 Appellate Authority of Commercial Taxes Bhopal
Madhya Pradesh Value Added Tax Value Added Tax 2.84 2016-2017 Appellate Authority of Commercial Taxes Bhopal
Maharashtra Value Added Tax Value Added Tax 87.32 2010-2011 Appeal filed with Maharashtra Sales Tax Tribunal
Maharashtra Value Added Tax Value Added Tax 44.84 2011-2012 Appeal with Deputy Commissioner of Sales Tax (Appeal)
Maharashtra Value Added Tax Value Added Tax 102.25 2012-2013 Appeal with Deputy Commissioner of Sales Tax (Appeal)
Kerala Value Added Tax Value Added Tax 17.03 2013-2014 Appellate Authority of Commercial Taxes Kerala
Kerala Value Added Tax Value Added Tax 26.23 2014-2015 Appellate Authority of Commercial Taxes Kerala
Kerala Value Added Tax Value Added Tax 28.91 2015-2016 Appellate Authority of Commercial Taxes Kerala
Kerala Value Added Tax Value Added Tax 13.96 2016-2017 Appellate Authority of Commercial Taxes Kerala

viii. According to the information and explanations given to us andbased on our examination of the records the Company has not defaulted in the repayment ofoutstanding dues to financial institution bank or debenture holder during the year. TheCompany did not have any borrowings from the government during the year.

ix. According to the information and explanations given to us and basedon our examination of the records the Company has utilised the money raised during theyear by way of terms loans for the purpose for which they were raised. During the yearthe Company has not raised moneys by way of initial public offer or further public offer.

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 except for 80 casesaggregating Rs. 172.89 lakhs which largely pertains to misappropriation of cash we haveneither come across any instance of fraud by the Company or any material instance of fraudon the Company by its officers or employees noticed or reported during the year nor havewe been informed of such case by management.

xi. According to the information and explanations give to us and basedon our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable to the Company.

xiii. According to the information and explanations given to us and onthe basis of our examination of the records of the Company transactions with the relatedparties are in compliance with section 177 and 188 of the Act where applicable and thedetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.

xiv. According to the information and explanations given to us andbased on our examination of the records the Company has not made preferential allotmentor private placement of shares or fully or partly convertible debentures during the yearunder review and accordingly paragraph 3(xiv) of the Order is not applicable to theCompany.

xv. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered into anynon-cash transactions with directors or persons connected with them. Accordinglyparagraph 3(xv) of the Order is not applicable to the Company.

xvi. According to the information and explanations given to us theCompany has registered as required under Section 45-IA of the Reserve Bank of India Act1934.

For B S R & Co. LLP.

Chartered Accountants

Firm's Registration No: 101248W/W-100022

Venkataramanan Vishwanath

Partner

Membership No: 113156

ICAI UDIN: 20113156AAAACM7045

Mumbai

15 May 2020

Annexure B to the Independent Auditors' report on the standalonefinancial statements of Mahindra & Mahindra Financial Services Limited for the yearended 31 March 2020

Report on the internal financial controls with reference to theaforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143of the Companies Act 2013

Referred to in paragraph 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 tofinancial statements of Mahindra & Mahindra Financial Services Limited ("theCompany”) as of 31 March 2020 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequateinternal financial controls with reference to financial statements and such internalfinancial controls were operating effectively as at 31 March 2020 based on the internalfinancial controls with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note”).

MANAGEMENT'S RESPONSIBILITY FOR INTERNALFINANCIAL CONTROLS

The Company's management and the Board of Directors areresponsible for establishing and maintaining internal financial controls based on theinternal financial controls with reference to financial statements criteria established bythe Company considering the essential components of internal control stated in theGuidance Note. These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as "the Act”).

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls with reference to financial statements.

Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wereestablished and maintained and whether such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tofinancial statements included 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 ofthe risks of material misstatement of the standalone financial statements whether due tofraud or error.

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

Annexure B to the Independent Auditors' report on the standalonefinancial statements of Mahindra & Mahindra Financial Services Limited for the yearended 31 March 2020 (Continued)

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIALSTATEMENTS

A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements include those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIALCONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls withreference 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.

For B S R & Co. LLP.

Chartered Accountants

Firm's Registration No: 101248W/W-100022

Venkataramanan Vishwanath

Partner

Membership No: 113156

ICAI UDIN: 20113156AAAACM7045

Mumbai

15 May 2020

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