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MAS Financial Services Ltd.

BSE: 540749 Sector: Financials
NSE: MASFIN ISIN Code: INE348L01012
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OPEN 1140.00
PREVIOUS CLOSE 1132.45
VOLUME 19420
52-Week high 1269.00
52-Week low 504.95
P/E 29.17
Mkt Cap.(Rs cr) 5,372
Buy Price 982.85
Buy Qty 115.00
Sell Price 982.85
Sell Qty 85.00
OPEN 1140.00
CLOSE 1132.45
VOLUME 19420
52-Week high 1269.00
52-Week low 504.95
P/E 29.17
Mkt Cap.(Rs cr) 5,372
Buy Price 982.85
Buy Qty 115.00
Sell Price 982.85
Sell Qty 85.00

MAS Financial Services Ltd. (MASFIN) - Auditors Report

Company auditors report

To the members of MAS Financial Services Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of MAS FinancialServices Limited (the RsCompanyRs) which comprise the standalone balance sheet as at 31March 2019 and the standalone statement of profit and loss (including other comprehensiveincome) the standalone statement of changes in equity and the standalone statement ofcash flows for the year then ended and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as the 'standalone financial statement's).

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 RsActRs) in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India of the state of affairs of the Company as at 31 March 2019 and profitand other comprehensive income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing('sA's) specified under section 143 (10) of the Act. Our responsibilities under those SAsare further 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 (the RsICAIRs) together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

Key audit matter How the matter was addressed in our audit

Transition date accounting policies

Refer to the accounting policies in the standalone financialstatements: Significant Accounting Policies - RsBasis of preparationRs and Note 47 to thestandalone financial statements: RsExplanation of transition to Ind A's

Effective 1 April 2018 the Company has adopted the Indian Our key audit procedures included:
Accounting Standards (RsInd A's) notified by the Ministry of Design / controls
Corporate Affairs with the transition date of 1 April 2017. • Assessing the design implementation and operating effectiveness of key internal controls over management's evaluation of transition date choices and exemptions availed in line with the principles under Ind AS 101.
The following are the major impact areas for the Company upon transition:
• Business model assessment
• Classification and measurement of financial assets and financial liabilities • We have also confirmed the approval of Audit Committee for the choices and exemptions made by the Company for compliance / acceptability under Ind AS 101.
• Measurement of loan losses (expected credit losses)
• Accounting for assignment
• Accounting for loan fees and costs Substantive tests
• Accounting for actuarial gain / loss on post- employment benefit
Migration to the new accounting framework (Ind AS) is a complicated process involving multiple decision points upon transition. Ind AS 101 First Time Adoption prescribes choices and exemptions for first time application of Ind AS principles at the transition date. • Evaluated management's transition date choices and exemptions for compliance / acceptability under Ind AS 101.
• Understood the methodology implemented by management to give impact on the transition and tested the computation.
We identified transition date accounting as a key audit matter because of significant degree of management judgment and application on the areas noted above. • Assessed areas of significant estimates and management judgment in line with principles under Ind AS.
• Evaluated the adequacy of the disclosure required by Ind AS 101

Assessment of business model for classification and measurement offinancial assets

Financial assets classified at Amortised cost: र 40266.91 Lakh as at31 March 2019 Financial assets classified at FVOCI: र 321853.69 Lakh as at 31 March 2019Financial assets classified at FVTPL: Nil as at 31 March 2019

Refer to the accounting policies in the standalone financialstatements: Significant Accounting Policies- RsClassification and measurement of financialasset's and Note 7 to the standalone financial statements: RsLoans (At FVOCI)Rs

Classification and measurement of financial assets - Our key audit procedures included:
Business model assessment Design / controls
Ind AS 109 Financial Instruments contains three principal measurement categories for financial assets i.e.: • Assessing the design implementation and operating effectiveness of key internal controls over management's intent of purchasing a financial asset and the approval mechanism for such stated intent and classification of such financial assets on the basis of management's intent (business model).
• Amortised cost;
• Fair Value through Other Comprehensive Income(RsFVOCIRs); and
• Fair Value through Profit and Loss (RsFVTPL!). • For financial assets classified at amortised cost we
A financial asset is classified into a measurement category at inception and is reclassified only in rare circumstances. The assessment as to how an asset should be classified is made on the basis of both the Company's business model for managing the financial asset and the contractual cash flow characteristics of the financial asset. tested controls over the classification of such assets and subsequent measurement of assets at amortised cost. Further we tested key internal controls over monitoring of such financial assets to check whether there have been any subsequent sales of financial assets classified at amortised cost.
The term Rsbusiness modelRs refers to the way in which the Company manages its financial assets in order to generate cash flows. That is the Company's business model determines whether cash flows will result from collecting contractual cash flows selling the financial assets or both. • For financial assets classified at FVOCI we tested controls over the classification of such assets and subsequent measurement of assets at fair value.
Substantive tests
Amortised cost classification and measurement category is met if the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows. • Test of details over of classification and measurement of financial assets in accordance with management's intent (business model).
FVOCI classification and measurement category is met if the financial asset is held in a business model in which assets are managed both in order to collect contractual cash flows and for sale. Such financial assets are subsequently measured at fair value with changes in fair value recognized in other comprehensive income. • We selected a sample of financial assets to test whether their classification as at the balance sheet date is in accordance with management's intent.
FVTPL classification and measurement category is met if the financial asset does not meet the criteria for classification and measurement at amortised cost or at FVOCI. Such financial assets are subsequently measured at fair value with changes in fair value recognized in profit or loss. • We selected a sample (based on quantitative thresholds) of financial assets sold during the year to check whether there have been any sales of financial assets classified at amortised cost.
We identified business model assessment as a key audit matter because of the management judgement involved in determining the intent for purchasing and holding a financial asset which could lead to different classification and measurement outcomes of the financial assets and its significance to the standalone financial statements of the Company. • We have also checked that there have been no reclassifications of assets in the current period.

Impairment of loans and advances to customers

Charge: र 1448.85 Lakh for year ended 31 March 2019 Provision: र3599.93 Lakh as at 31 March 2019

Refer to the accounting policies in the standalone financialstatements: RsImpairment of financial asset's Note 3.6 to the standalone financialstatements: Significant Accounting Policies - RsImpairment of financial asset's and Note 7to the standalone financial statements: RsLoans (At FVOCI)Rs

Subjective estimate

Recognition and measurement of impairment of loans and advances involvesignificant management judgement.

With the applicability of Ind AS 109 credit loss assessment is nowbased on expected credit loss (RsECL) model. The Company's impairment allowance is derivedfrom estimates including the historical default and loss ratios. Management exercisesjudgement in determining the quantum of loss based on a range of factors.

The most significant areas are:

• Segmentation of loan book

• Loan staging criteria

• Calculation of probability of default / Loss given default

• Consideration of probability weighted scenarios and forwardlooking macro-economic factors

There is a large increase in the data inputs required by the ECL model.This increases the risk of completeness and accuracy of the data that has been used tocreate assumptions in the model. In some cases data is unavailable and reasonablealternatives have been applied to allow calculations to be performed.

Our audit procedures included:

Design / controls

• Evaluation of the appropriateness of the impairment principlesbased on the requirements of Ind AS 109 our business understanding and industry practice.

• Understanding management's new / revised processes systems andcontrols implemented in relation to impairment allowance process.

• Assessing the design and implementation of key internalfinancial controls over loan impairment process used to calculate the impairment charge.

• We used our modelling specialist to test the model methodologyand reasonableness of assumptions used.

• Testing of management review controls over measurement ofimpairment allowances and disclosures in the standalone financial statements.

Substantive tests

• We focused on appropriate application of accounting principlesvalidating completeness and accuracy of the data and reasonableness of assumptions used inthe model.

• Performed test of details over calculation of impairmentallowance for assessing the completeness accuracy and relevance of data.

• Model calculations were tested through re-performance wherepossible.

• Appropriateness of management's judgments was also independentlyreconsidered in respect of calculation methodologies segmentation economic factors theperiod of historical loss rates used loss emergence periods and the valuation of recoveryassets and collateral.

• Evaluated the adequacy of the disclosures including disclosureon key assumptions judgments and sensitivities.

Other Information

The Company's management and the Board of Directors are responsible forthe other information. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements and ourAuditor's 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 Standalone Financial Statements

The Company's management and the Board of Directors are responsible forthe matters 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 (RsInd A's) 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 theBoard of Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

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

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

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 material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

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

• 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 Auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matter

The comparative financial information of the Company for the year ended31 March 2018 and the transition date opening balance sheet as at 1 April 2017 included inthese standalone Ind AS financial statements are based on the previously issued statutoryfinancial statement prepared in accordance with the accounting principles generallyaccepted in India including the Accounting standards specified under Section 133 of theAct audited by the predecessor auditor whose report for the year ended 31 March 2018 and31 March 2017 dated 9 May 2018 and 17 May 2017 respectively expressed an unmodifiedopinion on those standalone financial statements as adjusted for the difference in theaccounting principles adopted by the Company on transition to the Ind AS which have beenaudited by us.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 (theRsOrderRs) issued by the Central Government in terms of section 143 (11) of the Act wegive in the RsAnnexure ARs a statement on the matters specified in paragraphs 3 and 4 ofthe 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) I n our opinion the aforesaid standalone financial statementscomply with 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 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2019 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 the standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in RsAnnexure BRs.

(B) With respect to the other matters to be included in the Auditor'sReport 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 does not have any pending litigations which would impactits financial position.

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.

iv. The disclosures in the standalone financial statements regardingholdings as well as dealings in specified bank notes during the period from 8 November2016 to 30 December 2016 have not been made in these standalone financial statements sincethey do not pertain to the financial year ended 31 March 2019.

(C) With respect to the matter to be included in the Auditor's 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)which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Nirav Patel
Ahmedabad Partner
8 May 2019 Membership No: 113327

Annexure 'A'

to the Independent Auditor's report on the standalone financialstatements of MAS Financial Services Limited for the year 31 March 2019

(Referred to in paragraph 1 under 'Report on Other Legal and RegulatoryRequirement's section of our report of even date)

i. (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant andequipment.

(b) The Company has a regular programme of physical verification of itsproperty plant and equipment by which all property plant and equipment are verifiedevery year. In our opinion the frequency of physical verification is reasonable havingregard to the size of the Company and the nature of its assets. In accordance with thisprogramme all property plant and equipment were physically verified by management duringthe year. No material discrepancies were noticed upon such verification.

(c) According to the information and explanations given to us and therecords examined by us the title deeds of immovable properties included in propertyplant and equipment are held in the name of the Company.

ii. The Company is a non-banking finance company and does not hold anyinventories. Accordingly reporting under clause (ii) of the Order is not applicable.

iii. According to the information and explanation given to us theCompany has granted unsecured loans to two companies covered in the register maintainedunder Section 189 of the Companies Act 2013 (the RsActRs).

(a) In respect of the aforesaid loans the terms and conditions underwhich such loans were granted are not prejudicial to the Company's interest.

(b) The Company has stipulated schedule of repayment of principal andpayment of interest and repayment of principal amount and receipt of interest is regular.

(c) There is no overdue amount in respect of the aforesaid loans.

iv. According to the information and explanations given to us theCompany has not granted any loans made investments or provided guarantees under Section185 of the Act and has complied with the provisions of Section 186 (1) of the Act. TheCompany being a NBFC nothing contained in Section 186 is applicable except subsection(1) of that section.

v. According to the information and explanations given to us theCompany has not accepted any deposits from the public to which the directives issued bythe Reserve Bank of India and the provisions of Section 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder apply. Accordingly the provision ofclause 3(v) of the Order is not applicable to the Company.

vi. According the information and explanation given to us maintenanceof cost records has not been specified for the Company by the Central Government undersection 148(1) of the Act.

vii. (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company the Company has generallybeen regular in depositing undisputed statutory dues including provident fund employee'sstate insurance income tax goods and service tax cess and other material statutory duesapplicable to it to the appropriate authorities though there has been a slight delay in afew cases. As explained to us the Company did not have any dues on account of sales taxwealth tax duty of customs duty of excise and value added tax.

According to the information and explanations given to us noundisputed amounts payable in respect provident fund employee's state insuranceincome-tax goods and service tax cess and other material statutory dues were in arrearsas at 31 March 2019 for a period of more than six months from the date they becamepayable.

(b) According to the information and explanations given to us thereare no dues of income tax service tax and goods and service tax which have not beendeposited with the appropriate authorities on account of any dispute except as below:

Name of Statute Nature of dues Period to which the amount relates Amount disputed (Rs in Lakh) Amount unpaid (Rs in Lakh) Forum where the dispute is pending
Income-tax Act 1961 Income-tax AY 2011-12 24.94 19.95 Deputy commissioner of Income tax
Income-tax Act 1961 Income-tax AY 2016- 17 64.36 51.49 Additional commissioner of Income tax

viii. In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of loans or borrowings tofinancial institutions banks or dues to debenture holders. There are no loans orborrowings from government.

ix. The Company did not raise any money by way of initial public offeror further public offer (including debt instruments) in current year. In our opinion andaccording to the information and explanations given to us term loans have been appliedfor the purposes for which they were raised.

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 there are nomaterial fraud by the Company or any fraud on the Company by its officers or employees hasbeen noticed or reported during the year.

xi. I n our opinion and according to the information and explanationsgiven to us the Company has paid / provided for managerial remuneration in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV to the Act.

xii. I n our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company as prescribed under Section 406 of theAct. Accordingly paragraph 3(xii) of the Order is not applicable to the Company.

xiii. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with Section 177 and Section 188 of the Act where applicable.The details of such related party transactions have been disclosed in the standalonefinancial statements as required by the applicable accounting standards.

xiv. According to the information and explanations give to us and basedon our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3 (xiv) of the Order is not applicableto the Company.

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 anynoncash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable to the Company.

xvi. The Company is required to be registered under Section 45-IA ofthe Reserve Bank of India Act 1934 and it has obtained the registration.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Nirav Patel
Ahmedabad Partner
8 May 2019 Membership No: 113327

Annexure 'B'

to the Independent Auditor's report on the standalone financialstatements of MAS Financial Services Limited for the year 31 March 2019

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 1 (A) (f) under 'Report on Other Legal andRegulatory Requirement's section of our report of even date)

Opinion

We have audited the internal financial controls with reference to thestandalone financial statements of MAS Financial Services Limited (the 'Company') as of 31March 2019 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.

In our opinion the Company has in all material respects adequateinternal financial controls with reference to the standalone financial statements and suchinternal financial controls were operating effectively as at 31 March 2019 based on theinternal financial controls with reference to the standalone financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the'Guidance Note') issued by the Institute of Chartered Accountants of India (the 'ICAI').

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to the standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to the Company'spolicies safeguarding of its assets prevention and detection of frauds and errorsaccuracy and completeness of the accounting records and timely preparation of reliablefinancial information as required under the Companies Act 2013 (hereinafter referred toas the 'Act').

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to the standalone financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note and the Standards onAuditing prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls with reference to the standalone financialstatements.

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 the standalone financialstatements were established and maintained and whether such controls operated effectivelyin all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to the standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to the standalone financial statements included obtaining an understandingof such internal financial controls assessing the risk that a material weakness existsand testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk. The procedures selected depend on the Auditor's judgementincluding the assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud 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 internal financialcontrols with reference to the standalone financial statements.

Meaning of Internal Financial controls with Reference to the FinancialStatements

A Company's internal financial controls with reference to the financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of the financial statements for externalpurposes in accordance with generally accepted accounting principles. A Company's internalfinancial controls with reference to the 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 the 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 Financial controls with Reference tothe Standalone Financial Statements

Because of the inherent limitations of internal financial controls withreference to the standalone financial statements including the possibility of collusionor

improper management override of controls material misstatements due toerror or fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls with reference to the standalone financial statements tofuture periods are subject to the risk that the internal financial controls with referenceto the standalone financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Nirav Patel
Ahmedabad Partner
8 May 2019 Membership No: 113327