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NRB Bearings Ltd.

BSE: 530367 Sector: Engineering
NSE: NRBBEARING ISIN Code: INE349A01021
BSE 00:00 | 21 Jun 135.55 1.30
(0.97%)
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133.90

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137.15

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130.65

NSE 00:00 | 21 Jun 135.65 1.35
(1.01%)
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132.00

HIGH

137.30

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131.50

OPEN 133.90
PREVIOUS CLOSE 134.25
VOLUME 73926
52-Week high 141.20
52-Week low 65.10
P/E 30.06
Mkt Cap.(Rs cr) 1,313
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 133.90
CLOSE 134.25
VOLUME 73926
52-Week high 141.20
52-Week low 65.10
P/E 30.06
Mkt Cap.(Rs cr) 1,313
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

NRB Bearings Ltd. (NRBBEARING) - Auditors Report

Company auditors report

To the Members of NRB Bearings Limited

Report on the Audit of the Standalone Financial Statements Opinion

1. We have audited the accompanying standalone financial statements of NRBBearings Limited ('the Company') which comprise the Balance Sheet as at 31 March2020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Cash Flow and the Statement of Changes in Equity for the year then ended anda summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the "Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including Indian Accounting Standards ("Ind AS")specified under Section 133 of the Act of the state of affairs of the Company as at 31March 2020 and its profit (including other comprehensive loss) its cash flows and thechanges in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditingspecified under Section 143(10) of the Act. Our responsibilities under those standards 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 ('ICAI') together with the ethical requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the rules thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.

Emphasis of Matters

4. Impact of COVID-19

We draw attention to Note 48 of the accompanying standalone financialstatements which describes the uncertainties relating to the COVID-19 pandemic outbreakand management's evaluation of the impact on the standalone financial statements of theCompany as at the balance sheet date. The impact of these uncertainties on the Company'soperations is significantly dependent on future developments. Our opinion is not modifiedin respect of this matter.

5. Non-compliance with laws and regulations

We draw attention to Note 11(a) to the accompanying standalonefinancial statements which indicates delay in receipts of foreign currency receivablesamounting to Rs. 3171 lakhs as at 31 March 2020 beyond the timelines stipulated vide FEDMaster Direction No.16/2015-16 under the Foreign Exchange Management Act 1999. Themanagement of the Company is in the process of recovering the outstanding dues andregularizing these defaults by filing necessary applications with the appropriateauthority for condonation of such delays. The management is of the view that thefines/penalties if any that may be levied pursuant to delay are currentlyunascertainable but would not be material and accordingly the accompanying standalonefinancial statements do not include any consequential adjustments that may arise due tosuch delay / default. Our opinion is not modified in respect of this matter.

Key Audit Matter

6. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the standalone financial statements ofthe current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.

7. We have determined the matter described below to be the key auditmatter to be communicated in our report.

Key audit matter How our audit addressed the key audit matter
Recoverability of investment trade receivables loans / advances given to /recoverable from subsidiary company Our audit procedures in relation to assessing the recoverable value of investments included but were not limited to the following:
Refer Notes 5(a) 5(a)(2) 11 14 16 and 43(a) in the standalone financial statements.
• Obtained an understanding of management's processes and controls for determining the recoverable value of investments;
The Company as at 31 March 2020 has investments in NRB Bearings (Thailand) Limited ('wholly owned subsidiary') amounting to Rs. 2413 lakhs loans outstanding (including interest receivable) amounting to Rs. 1741 lakhs trade receivables amounting to Rs. 1243 lakhs advances recoverable amounting to Rs. 107 lakhs and has given guarantee amounting to Rs. 2528 lakhs which is engaged in business of manufacturing and trading of bearings. Such investment in the aforesaid subsidiary is accounted for at cost in accordance with Ind AS 27 Separate Financial Statements. The Company assesses the recoverable amount of the investment when impairment indicators exist by comparing the fair value (less costs of disposal) and carrying amount of the investment as on the reporting date. Loans / Guarantee given to advances and trade receivables due from the wholly owned subsidiary is accounted for in accordance with Ind AS 109 Financial Instruments. Refer Note 1.1 for the relevant accounting policy for such balances outstanding as at 31 March 2020.
• Assessed the design of and tested the operating effectiveness of the key controls around fair valuation;
• Assessed the professional competence objectivity and capabilities of the valuation specialist engaged by the management;
• Assessed the appropriateness of the valuation methodology used to arrive at the recoverable value of the investments using auditor's valuation specialist;
• Evaluated the reasonableness of the assumptions used in cash flow projections such as growth rate gross margins discount rates etc. based on historical results current developments including the possible impact of COVID 19 and future plans estimated by the management using expertise of our valuation specialist on required parameters;
During the year ended 31 March 2020 NRB Bearings (Thailand) Limited has reported a profit of Rs. 104 lakhs (THB 5 million) but as at that date its accumulated losses aggregating Rs. 2775 lakhs (THB 120 million) have significantly eroded its capital.
• Assessed cash flow forecasts to ensure consistency with current operations of the Company reconciled the cash flow projections to the business plans approved by the Company's board of directors and reviewed the sensitivity analysis performed by the management on aforesaid key assumptions and performed further independent sensitivity analysis to determine impact of estimation uncertainty on the valuation;
As at 31 March 2020 management has assessed that the recoverable value of its investment in the subsidiary determined using 'Discounted Cash Flow valuation model is higher than the carrying value of the investment in NRB Bearings (Thailand) Limited. However there is a risk that the investment in NRB Bearings (Thailand) Limited may be impaired if the projections used in computation of recoverable amount method are not met. The Management's assessment of recoverable amount requires estimation and judgement around the key assumptions underpinning management's assessment including but not limited to projections of future cash flows growth rates and future market and economic conditions. Such assumptions have been affected by the COVID-19 pandemic in the current year adding to the complexity in estimation involved.
• Tested the mathematical accuracy of the cash flow projections and fair valuation computation; and
• Evaluated the appropriateness and adequacy of the related disclosures made in the standalone financial statements in accordance with the applicable accounting standards.
Considering the materiality of the amount involved and significant management judgement required for valuation the recoverability of aforesaid balances as at 31 March 2020 has been determined to be a key audit matter in the current year audit.

Information other than the Standalone Financial Statements andAuditor's Report thereon

8. The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the CorporateGovernance Report but does not include the standalone financial statements and ourauditor's report thereon which we obtained prior to the date of this auditor's reportand the Annual Report which is expected to be made available to us after that date.

Our opinion on the standalone financial statements does not cover theother information and we do not and will not express any form of assurance conclusionthereon

In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above and in doing soconsider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

If based on the work we have performed on the other information thatwe obtained prior to the date of this auditor's report we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

When we read the Annual Report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

9. The accompanying standalone financial statements have been approvedby the Company's Board of Directors. The Company's Board of Directors is 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 financial positionfinancial performance including other comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Ind AS specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the 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 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.

10. In preparing the financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

11. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process. Auditor's Responsibilities for the Audit of theStandalone Financial Statements

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

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

• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol;

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls;

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

• Conclude on the appropriateness of management's use of 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 financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern;

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation;

14. 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.

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

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

Report on Other Legal and Regulatory Requirements

17. As required by Section 197(16) of the Act based on our audit wereport that the Company has paid remuneration to its directors during the year inaccordance with the provisions of and limits laid down under Section 197 read withSchedule V to the Act.

18. As required by the Companies (Auditor's Report) Order 2016 ('theOrder') issued by the Central Government of India in terms of Section 143(11) of the Actwe give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 ofthe Order.

19. Further to our comments in Annexure A as required by Section143(3) of the Act based on our audit we report to the extent applicable that:

a) we have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our auditof the accompanying standalone financial statements;

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 financial statements dealt with by this report are inagreement with the books of account;

d) in our opinion the aforesaid standalone financial statements complywith Ind AS specified under Section 133 of the Act;

e) the matters described in paragraph 4 and 5 under the Emphasis ofMatters section in our opinion may have an adverse effect on the functioning of theCompany;

f) on the basis of the written representations received from thedirectors and taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164(2) of the Act;

g) we have also audited the internal financial controls with referenceto standalone financial statements of the Company as on 31 March 2020 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate and our report as per Annexure B expressed an unmodified opinion; and

h) 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 (asamended) in our opinion and to the best of our information and according to theexplanations given to us:g) with respect to the other matters to be included in theAuditor's Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules2014 (as amended) in our opinion and to the best of our information and according to theexplanations given to us:

i. the Company has disclosed the impact of pending litigations on itsfinancial position as at 31 March 2020;

ii. the Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses as at 31 March2020;

iii. following is the instance of delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Company

Unpaid dividend for Financial Year 2011-2012 amounting to Rs. 3 lakhs;and

iv. the disclosure requirements relating to holdings as well asdealings in specified bank notes were applicable for the period from 8 November 2016 to 30December 2016 which are not relevant to these standalone financial statements. Hencereporting under this clause is not applicable.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Adi P. Sethna

Partner

Membership No.: 108840 UDINo.: 20108840AAAACG5574

Place: Mumbai Date: 28 June 2020

Annexure A to the Independent Auditor's Report of even date to themembers of NRB Bearings Limited on the standalone financial statements for the year ended31 March 2020

Annexure A

Based on the audit procedures performed for the purpose of reporting atrue and fair view on the standalone financial statements of the Company and taking intoconsideration the information and explanations given to us and the books of account andother records examined by us in the normal course of audit and to the best of ourknowledge and belief we report that:

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

(b) The Company has a program of verification of its property plantand equipment to cover all the items once every three years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Pursuantto the program all property plant and equipment were physically verified by theManagement during the year ended 31 March 2018. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties (which are includedunder the head 'Property plant and equipment') are held in the name of the Company exceptfor the following properties which were transferred as a result of acquisition of companyand amalgamation of companies as stated in Note 2 to the standalone financial statementsrespectively wherein the title deed is in the name of the erstwhile companies.

Nature of property Total Number of Cases Whether leasehold /freehold Gross block as on 31 March 2020 Net block on 31 March 2020 Remarks
Land at Waluj 1 Leasehold land ' 6 lakhs ' 4 lakhs The lease deed is in the name of NRB Torrington Private Limited erstwhile Company that was merged with the Company under Section 391 to 394 of the Companies Act 1956 in terms of the approval of the Honorable High Court.
Land at Hyderabad 1 Freehold land ' 55 lakhs ' 55 lakhs The land is in the name of Shahney Steels Press Works Limited that was acquired by the Company under Board for Financial and Industrial Reconstruction (BIFR) order in the financial year 1992-93.

(ii) In our opinion the management has conducted physical verificationof inventory at reasonable intervals during the year except for goods-in-transit andstocks lying with third parties. For stocks lying with third parties at the year- endwritten confirmations have been obtained by the management. No material discrepancies werenoticed on the aforesaid verification.

(iii) The Company has granted an unsecured loan to only one partycovered in the register maintained under Section 189 of the Act which is its wholly ownedforeign subsidiary; and with respect to the same:

(a) in our opinion the terms and conditions of the loan granted arenot prima facie prejudicial to the Company's interest;

(b) the schedule of repayment of principal and interest has beenstipulated and repayment of the principal amount and the receipts of interest are regular.

(c) there is no overdue amount in respect of loan granted to the party.

(iv) In our opinion the Company has complied with the provisions ofSection 186 in respect of investments loans and guarantees. Further in our opinion theCompany has not entered into any transaction covered under Section 185 and Section 186 ofthe Act in respect of provision of security.

(v) In our opinion the Company has not accepted any deposits withinthe meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits)Rules 2014 (as amended). Accordingly the provisions of clause 3(v) of the Order are notapplicable.

(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under sub-section (1) of Section 148 of the Act in respect of Company's productsand are of the opinion that prima facie the prescribed accounts and records have beenmade and maintained. However we have not made a detailed examination of the cost recordswith a view to determine whether they are accurate or complete.

(vii) (a) Undisputed statutory dues including employees' stateinsurance income-tax sales-tax service tax goods and

service tax duty of customs duty of excise value added tax cess andother material statutory dues as applicable have been regularly deposited with theappropriate authorities except for delays in certain amounts of provident fund. Furtherthe amount of provident fund outstanding at the year-end for a period of more than sixmonths from the date they became payable and which have not been paid till date are asfollows:

Statement of arrears of statutory dues outstanding for more than sixmonths

Name of the statute Nature of dues Amount (Rs. in lakhs) Period to which the amount relates Due Date
The Employees Provident Funds and Miscellaneous Provisions Act 1952 Provident fund 5 April 2019 15 May 2019
5 May 2019 15 June 2019
5 June 2019 15 July 2019
5 July 2019 15 August 2019
5 August 2019 15 September 2019

b) The Company did not have any disputes for which dues are outstandingfor service tax or duty of customs or duty of excise during the year. The dues outstandingin respect of income-tax sales-tax local body tax and value added tax on account ofdisputes are as follows:

Statement of Disputed Dues

Name of the statute Nature of dues Amount (Rs. in lakhs) Amount paid under Protest (Rs. in lakhs) Period to which the amount relates Forum where dispute is pending
The Income-tax Act 1961 Income-tax 35 35 A.Y. 2007-08 Commissioner of Income Tax (Appeals)
83 83 A.Y. 2008-09 High Court
16 16 A.Y. 2009-10 Commissioner of Income Tax (Appeals)
2 2 A.Y. 2011-12
414 152 A.Y. 20012-13
96 19 A.Y. 20013-14
15 15 A.Y. 20013-14 Income Tax Appellate Tribunal
The Income-tax Act 1961 Income-tax 165 40 A.Y. 2014-15 Commissioner of Income Tax (Appeals)
250 107 A.Y. 2015-16
367 44 A.Y. 2016-17
635 412 A.Y. 2017-18
219 - A.Y. 2018-19
273 - A.Y. 2019-20
Name of the statute Nature of dues Amount (Rs. in lakhs) Amount paid under Protest (Rs. in lakhs) Period to which the amount relates Forum where dispute is pending
The Bombay Sales Tax Act 1959 Value Added tax 1 - F.Y. 1996-97 Deputy Commissioner (Appeals)
The Central Sales Tax Act 1956 Sales tax 3 - F.Y. 1996-97 Deputy Commissioner (Appeals)
5 F.Y. 2012-13 Appellate Deputy Commissioner (Appeals)
8 F.Y. 2012-13 Assistant Commissioner (Commercial Tax)
2 F.Y. 2013-14 Assistant Commissioner (Commercial Tax)
7 - F.Y. 2013-14 Commercial Tax Officer
3 F.Y. 2014-15 Assistant Commissioner (Commercial Tax)
44 - F.Y. 2014-15 Deputy Commissioner (Commercial Tax)
14 - F.Y. 2014-15 Commercial Tax Officer
6 - F.Y. 2015-16 Deputy Commissioner (Commercial Tax)
10 10 F.Y. 2015-16 Joint Commissioner Sales (Appeals)
1 0** F.Y. 2016-17 Senior Joint
1 0** F.Y. 2017-18 Commissioner (Appeals)
The Bombay Local body 72 17 F.Y. 2013-14 Deputy Commissioner
Provincial Municipal Corporation Act 1949 read with tax 36 9 F.Y. 2014-15 of Local Body Tax (Appeals)
8 3 F.Y. 2015-16
Bombay Provincial Municipal Corporation (Local Body Tax) Rules 2010 (as amended)

(*) Including interest

(**) Amount less than Rs. 1 lakh

(viii) The Company has not defaulted in repayment of loans orborrowings to any bank or any dues to debenture-holders during the year and has no loans /borrowings payable to any financial institution.

The Company has defaulted in repayment of dues to the government duringthe year as detailed below. Also refer footnote (iii) below Note 25 of the accompanyingstandalone financial statements.

Particulars Period of default Amount of default as on 31 March 2020 (Rs. in lakhs)
Deferred sales tax loan Above 180 days 11

(ix) The Company did not raise moneys by way of initial public offer orfurther public offer (including debt instruments). In our opinion the term loans availedduring the year were applied for the purposes for which the loans were obtained.

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

(xi) Managerial remuneration has been paid and provided by the Companyin accordance with the requisite approvals mandated by the provisions of Section 197 ofthe Act read with Schedule V to the Act.

(xii) In our opinion the Company is not a Nidhi Company. Accordinglyprovisions of clause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are incompliance with Sections 177 and 188 of Act where applicable and the requisite detailshave been disclosed in the standalone financial statements etc. as required by theapplicable Ind AS.

(xiv) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures.Accordingly the provisions of clause 3(xiv) of the Order are not applicable.

(xv) In our opinion the Company has not entered into any non-cashtransactions with the directors or persons connected with them covered under Section 192of the Act. Accordingly the provisions of clause 3(xv) of the Order are not applicable.

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

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Adi P. Sethna

Partner

Membership No.: 108840

UDINo.: 20108840AAAACG5574

Place: Mumbai

Date: 28 June 2020

Annexure B to the Independent Auditor's Report of even date to themembers of NRB Bearings Limited on

the standalone financial statements for the year ended 31 March 2020

Annexure B

Independent Auditor's Report on the internal financial controls withreference to the standalone financial

statements under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ('the Act1)

1. In conjunction with our audit of the standalone financial statementsof NRB Bearings Limited ('the Company') as at and for the year ended 31 March 2020 wehave audited the internal financial controls with reference to financial statements of theCompany as at that date.

Responsibilities of Management and Those Charged with Governance forInternal Financial Controls

2. The Company's Board of Directors is responsible for establishing andmaintaining 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 on Audit of InternalFinancial Controls over Financial Reporting (the "Guidance Note") issued by theInstitute of Chartered Accountants of India (the "ICAI"). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of theCompany's business including adherence to the Company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Act.

Auditor's Responsibility for the Audit of the Internal FinancialControls with Reference to Standalone Financial Statements

3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Standards on Auditing issued by the Instituteof Chartered Accountants of India ('ICAI') prescribed under Section 143(10) of the Act tothe extent applicable to an audit of internal financial controls with reference tofinancial statements and the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting ('the Guidance Note') issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to financial statements were established and maintained and if suchcontrols operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls with reference to standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to financial statements includes obtaining an understanding ofsuch internal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error.

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

Meaning of Internal Financial Controls with Reference to StandaloneFinancial Statements

6. 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 Financial Controls with Reference toStandalone Financial Statements

7. Because of the inherent limitations of internal financial controlswith reference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequateinternal financial controls with reference to the standalone financial statements and suchcontrols were operating effectively as at 31 March 2020 based on the internal financialcontrols with reference to financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Noteissued by the ICAI.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Adi P. Sethna

Partner

Membership No.: 108840

UDIN: 20108840AAAACG5574

Place: Mumbai

Date: 28 June 2020