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Panacea Biotec Ltd.

BSE: 531349 Sector: Health care
NSE: PANACEABIO ISIN Code: INE922B01023
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VOLUME 48085
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OPEN 286.50
CLOSE 291.60
VOLUME 48085
52-Week high 453.70
52-Week low 171.00
P/E
Mkt Cap.(Rs cr) 1,787
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Panacea Biotec Ltd. (PANACEABIO) - Auditors Report

Company auditors report

To the Members of Panacea Biotec Limited

Report on the Audit of the Standalone Financial Statements

Opinion

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

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

Basis for Opinion

3.WeconductedourauditinaccordancewiththeStandardsonAuditingspecifiedundersection143(10)oftheAct.Ourresponsibilitiesunder those standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (‘ICAI') 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.

Material Uncertainty Related to Going Concern

4. We draw attention to Note 54 and Note 58 to the accompanying standalone financialstatements which indicates that the Company has incurred a net loss (before exceptionalitems) of Rs.635.28 million and has net cash outflow from operations of Rs.828.55 millionduring the year ended 31 March 2020. Further the aforesaid notes also describe theuncertainties due to the outbreak of COVID-19 pandemic and management's evaluation of theimpact on the standalone financial statements of the Company as at the balance sheet date.These factors and conditions along with other matters as explained in Note 54 and Note58 indicate the existence of a material uncertainty that may cast significant doubt aboutthe Company's ability to continue as a going concern. However based on the futureprojections which are dependent on certain assumptions and estimates restructuring of thedues payable towards the non-convertible debentures of the subsidiary company PanaceaBiotec Pharma Limited the management considers the use of going concern appropriate. Ouropinion is not modified in respect of this matter.

The above assessment of the Company's ability to continue as going concern is by itsnature considered as a key audit matter in accordance with SA 701. In relation to theabove key audit matter our audit work included but was not limited to the followingprocedures:

Obtained an understanding of the management's process for identifying all the events orconditions that could impact the Company's ability to continue as a going concern and theprocess followed to assess the mitigating factors for such events or conditions. Alsoobtained an understanding around the methodology adopted by the Company to assess theirfuture business performance and prepare a robust cash flow forecast;

Evaluated the design and tested the operating effectiveness of key controls aroundaforesaid identification of events or conditions and mitigating factors and controlsaround cash flow forecast prepared by the management;

Obtained the cash flow forecast for the next twelve months from the management basistheir future business plan and considering the impact of COVID-19;

Reconciled the cash flow forecast to the future business plan of the Company asapproved by the Board of Directors;

In order to corroborate management's future business plans and to identify potentialcontradictory information we read the minutes of the meetings of Board of Directors andconducted discussions with the management and the Audit Committee;

Obtained and read the agreements entered into between the Company subsidiary companyand the holders of non-convertible debentures to understand the payment milestones andrelated communication made for its restructuring;

Tested the appropriateness of key assumptions adopted by the management in preparationof the cash flow forecasts such as growth rates expenditure on new products plannedmonetization of non-core assets and their fair values and tested the reasonableness ofthese assumptions used based on our knowledge and understanding of the business actualhistorical results and external data as the case may be;

Obtained the sensitivity analysis prepared by management and also performed independentsensitivity analysis to test the impact of variation on the cash flows due to change inkey assumptions;

Reviewed the historical accuracy of the cash flow projections prepared by themanagement in prior periods; and

Evaluated the appropriateness and adequacy of the disclosures made by the Company withrespect to the aforesaid events and conditions in accordance with Ind AS 1 Presentationof Financial Statements in the standalone financial statements of the Company.

Key Audit Matters

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

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

Key audit matter How our audit addressed the key audit matter
Discontinued operations
Refer note 37(i) and 37(ii) to the accompanying standalone financial statements for the accounting policy and related disclosures respectively._ Our audit procedures included but were not limited to the following in relation to the discontinued operations:
a) Obtained an understanding of the management process for ensuring classification measurement disclosure and allocations for the identified disposal groups;
During the previous year ended 31 March 2019 the management of the Company had identified two business segments as ‘discontinued operations' and thereby classified the related assets and liabilities as held for sale. b) Read the BTA including the amendment to BTA signed between the Company and PBPL for divestment of Pharma segment;
a) Divestment of pharmaceutical formulation segment ("Pharma segment"): c) Reviewed the assessment performed by the management for accounting and presentation of these transactions in accordance with applicable accounting standards;
As further explained in note 37(i) the management's plan of corporate restructuring to divest the Pharma segment to its wholly owned subsidiary Panacea Biotec Pharma Limited ("PBPL") was approved by the shareholders of the Company in an extra-ordinary general meeting held on 25 March 2019. d) Ensured the assets and liabilities being transferred to PBPL are in accordance with the terms of BTA;
Consequently the Company executed a Business Transfer Agreement (‘BTA') on 7 April 2019 to transfer by way of a slump sale the entire identified assets and related liabilities pertaining to Pharma segment to PBPL at their respective book values. The management of the Company had considered transfer of "Pharma segment" as disposal group and therefore identified it as ‘discontinued operation' in the standalone financial statements of the Company. e) Tested the arithmetical accuracy of computations used by management to determine the amounts being transferred;
f) Assessed management's conclusions regarding the allocations of the asset liabilities income and expenses that are assigned to the discontinued operations for the respective segments;
As further explained in note 37(i) on satisfactory completion of mentioned terms and conditions the BTA came into force with effect from 1 February 2020 resulting in execution of the transfer of all the assets and liabilities pertaining to the Pharma segment to PBPL at book values as on that date. g) Assessed the appropriateness of the carrying values of assets and liabilities classified as held for sale in accordance with the requirements of Ind AS 105;
h) With respect to matter (b) read the approvals received by the Company from shareholders and creditors during the year ended 31 March 2020 and understood the status of the demerger scheme with the legal team of the Company;
As on 1 February 2020 the Company has transferred assets amounting to Rs.3404.42 million and liabilities amounting to Rs.9266.44 million to PBPL. The resultant difference has been transferred to "other equity". i) Assessed reasonableness of management's judgement with respect to the likelihood and expected timing of the implementation of the restructuring; and
b) Demerger of real estate segment: As further explained in note 37(ii) the Company had decided to demerge its real estate undertaking comprising certain immoveable properties of the Company and its investment in a wholly owned subsidiary which was intended to deal in real estate. j) Assessed the appropriateness and adequacy of the related disclosures in the standalone financial statements of the Company in accordance with the applicable accounting standards.
The Board of Directors of the Company had approved the demerger proposal and the demerger scheme at their board meetings held on 26 February 2019 and 30 May 2019 respectively.
Pursuant to the above restructuring by the Company the management has assessed the real estate segment as disposal group and presented as "discontinued operations" in the standalone financial statements of the Company in accordance with the provisions of Indian Accounting Standard 105 – ‘Non-current Assets Held for Sale and Discontinued Operations'.
Accordingly net loss from the Pharma segment amounting to Rs.534.19 million for the ten month period ended 31 January 2020 and the real estate segment amounting to Rs.36.27 million for the year ended 31 March 2020 has been presented as profit/ (loss) from discontinued operations in the standalone Statement of Profit and Loss and the related assets /(liabilities) of the real estate business are classified as ‘assets/ (liabilities) classified as held for sale' in the standalone Balance Sheet as at 31 March 2020. We identified this as a key audit matter for current year audit in view of the significance of the impact of these restructuring transactions have on the standalone financial statements including the amounts involved and exercise of management judgments with respect to identification and segregation of assets and liabilities and allocation of corporate costs pertaining to Pharma segment and real estate segment.

Information other than the Financial Statements and Auditor's Report thereon

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

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

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

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

9. In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

10. Those Board of Directors is also responsible for overseeing the Company's financialreporting process. Auditor's Responsibilities for the Audit of the Financial Statements

11. Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith 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 standalone financial statements.

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

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

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to the standalone financial statementsin place and the operating effectiveness of such controls;

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management;

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

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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

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

15. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone 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

16. As required by section 197(16) of the Act based on our audit we report that theCompany has paid remuneration to its directors during the year in accordance with theprovisions of and limits laid down under section 197 read with Schedule V to the Act. 17.As required by the Companies (Auditor's Report) Order 2016 (‘the Order') issued bythe Central Government of India in terms of section 143(11) of the Act we give in theAnnexure A a statement on the matters specified in paragraphs 3 and 4 of the Order. 18.Further to our comments in Annexure A as required by section 143(3) of the Act based onour audit we report to the extent applicable that: a) we have sought and obtained allthe information and explanations which to the best of our knowledge and belief werenecessary for the purpose of our audit of the accompanying standalone financialstatements; b) in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those; c) the standalonefinancial statements dealt with by this report are in agreement with the books of account;d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under section 133 of the Act; e) the matter described in paragraph 4 under theMaterial uncertainty related to Going concern section in our opinion may have an adverseeffect on the functioning of the Company; f) on the basis of the written representationsreceived from the directors and taken on record by the Board of Directors none of disqualifiedthe directors as on 31 March 2020 from being appointed as a director in terms ofsection 164(2) of the Act; g) we have also audited the internal financial controls withreference to standalone financial statements of the Company as on 31 March 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date and our report dated 29 June 2020 as per Annexure B expressedunmodified opinion; and h) 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 as detailed in note 40 to the standalonefinancial statements has disclosed the impact of pending litigations on its financialposition as at 31 March 2020; ii. the Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses as at31 March 2020; iii. there were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the

Company during the year ended 31 March 2020; and iv. the disclosure requirementsrelating to holdings as well as dealings in specified bank notes were applicable for theperiod from 8 November 2016 to 30 December 2016 which are not relevant to thesestandalone financial statements. Hence reporting under this clause is not applicable.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Anupam Kumar
Partner
Membership No.: 501531
Place: New Delhi UDIN No.: 20501531AAAACV6159
Date: June 29 2020

Annexure A

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that: i) a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of property plant and equipment; b) TheCompany has a regular program of physical verification of its property plant andequipment under which property plant and equipment are verified in a phased manner over aperiod of three years which in our opinion is reasonable having regard to the size ofthe Company and the nature of its assets. In accordance with this program certainproperty plant and equipment were verified during the year and no material discrepancieswere noticed on such verification; and c) The title deeds of all the immovable properties(which are included under the head ‘Property plant and equipment') are held in thename of the Company. ii) In our opinion the management has conducted physicalverification of inventory at reasonable intervals during the year and no materialdiscrepancies between physical inventory and book records were noticed on physicalverification. iii) The Company has not granted any loan secured or unsecured tocompanies firms Limited Liability Partnerships (LLPs) or other parties covered in theregister maintained under Section 189 of the Act. Accordingly the provisions of clauses3(iii)(a) 3(iii)(b) and 3(iii)(c) of the Order are not applicable. iv) In ouropinion the Company has complied with the provisions of Section 186 of the Act in respectof loans investments and security. Further in our opinion the Company has not enteredinto any transaction covered under Section 185 and Section 186 of the Act in respect ofguarantees. v) In our opinion the Company has not accepted any deposits within themeaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules2014 (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 the Companypursuant to the Rules made by the Central Government for the maintenance of cost recordsunder sub-section (1) of Section 148 of the Act in respect of Company's products and areof the opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete. vii) a) Undisputed statutory duesincluding provident fund employees' state insurance income tax sales tax service taxduty of customs duty of excise value added tax cess and other material statutory duesas applicable have generally been regularly deposited to the appropriate authorities.Undisputed amounts payable in respect thereof which were outstanding at the year-end fora period of more than six months from the date they became payable are as follows:

Statement of arrears of statutory dues outstanding for more than six months:

Name of the statute

Nature of the dues

Amount (Rs. in million)

Period to which the amount relates

Due Date

Date of Payment

Remarks if any

Income tax Act 1961

Demand u/s 154/250/153A/ 143(3) of Income tax Act 1961

14.5

Assessment Year 2011-12

April 21 2016

Not yet paid

The Company intends to settle the demand with refund of other years.

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

Name of the statute

Nature of dues

Amount (Rs. in million)

Amount paid under Protest (Rs. in million)

Period to which the amount relates

Forum where dispute is pending

Income tax Act 1961

Disallowance in respect of certain purchases and expense items

162.2

-

Assessment Year 2005-06

Income Tax Appellate Tribunal (ITAT)

Income tax Act 1961

Disallowance in respect of certain purchases and expense items

3300.7

-

Assessment Year 2006-07 to 2009-10

Income Tax Appellate Tribunal (ITAT)

Customs Act 1962

Duty levied on exempted goods

4.0

4.0

Financial Year 2001-02

Custom Excise & Service Tax Appellate Tribunal

viii) There are no loans or borrowings payable to banks or financial institutions. TheCompany has not defaulted in dues payable to debenture-holders during the year. TheCompany has defaulted in repayment of loans/borrowings to the government includinginterest thereon:

Name of the Bank/ institution

Amount of default as on

Period of default

31 March 2020 (in million)

Biotechnology Industrial Research Assistance Council

7.00

Not yet paid

Refer note 47 to the standalone financial statements.

ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans raised through issue ofnon-convertible debentures were applied for the purposes for which the loans wereobtained though idle funds which were not required for immediate utilisation have beeninvested in liquid investments payable on demand.

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

(xi) Managerial remuneration has been paid by the Company in accordance with therequisite approvals mandated by the provisions of Section 197 of the Act read withSchedule V to the Act. (xii) In our opinion the Company is not a Nidhi Company.Accordingly provisions of clause 3(xii) of the Order are not applicable. (xiii) In ouropinion all transactions with the related parties are in compliance with Sections 177 and188 of Act where applicable and the requisite details have been disclosed in thefinancial statements etc as required by the applicable Ind AS. (xiv) During the year theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures.

(xv) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act. (xvi)The Company is not required to be registered under Section 45-IA of the Reserve Bank ofIndia Act 1934.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Anupam Kumar

Partner

Place : New Delhi

Membership No.: 501531

Date : 29 June 2020

UDIN No.: 20501531AAAACV6159

Annexure To the Auditors' Report

Annexure B

Independent Auditor's Report on the internal financial controls with reference tothe standalone financial statements under Clause (i) of Sub-section 3 of Section 143 ofthe Companies Act 2013 (‘the Act')

1. In conjunction with our audit of the standalone financial statements of PanaceaBiotec Limited (‘the Company') as at and for the year ended 31 March 2020 we haveaudited the internal financial controls with reference to financial statements of theCompany as at that date. Responsibilities of Management and Those Charged with Governancefor Internal Financial Controls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (‘the Guidance Note') issued by the Institute of Chartered Accountants ofIndia (‘ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of the Company's business including adherenceto the Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

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

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by the ICAI prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controlswith reference to financial statements and the Guidance Note issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements were established and maintainedand if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls with Reference to Financial Statements

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

Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements

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

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to financial statements and such controls were operatingeffectively as at 31 March 2020 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the ICAI.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Anupam Kumar

Partner

Place : New Delhi

Membership No.: 501531

Date : June 29 2020

UDIN No.: 20501531AAAACV6159

.