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Phillips Carbon Black Ltd.

BSE: 506590 Sector: Industrials
NSE: PHILIPCARB ISIN Code: INE602A01023
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NSE 00:00 | 25 Oct 232.90 -2.70
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OPEN 236.00
PREVIOUS CLOSE 235.35
VOLUME 81655
52-Week high 278.65
52-Week low 136.90
P/E 10.61
Mkt Cap.(Rs cr) 4,396
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 236.00
CLOSE 235.35
VOLUME 81655
52-Week high 278.65
52-Week low 136.90
P/E 10.61
Mkt Cap.(Rs cr) 4,396
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Phillips Carbon Black Ltd. (PHILIPCARB) - Auditors Report

Company auditors report

To

The Members of

Phillips Carbon Black Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statementsof Phillips Carbon Black Limited (" the Company") which comprise the Balancesheet as at March 31 2021 the Statement of Profit and Loss including the statement ofOther Comprehensive Income the Cash Flow Statement and the Statement of Changes in Equityfor the year then ended and notes to the standalone Ind AS financial statementsincluding a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Companies Act 2013 as amended ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2021 its profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the‘Auditor's Responsibilities for the Audit of the Standalone Ind AS FinancialStatements' section of our report. We are independent of the

Company in accordance with the ‘Code of Ethics' issued by theInstitute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the financial statements under the provisions of the Act andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone Ind AS financial statements forthe financial year ended March 31 2021. These matters were addressed in the context ofour audit of the standalone Ind AS financial statements as a whole and in forming ouropinion thereon and we do not provide a separate opinion on these matters. For eachmatter below our description of how our audit addressed the matter is provided in thatcontext.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the standalone Ind AS financialstatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the standalone Ind AS financial statements. The resultsof our audit procedures including the procedures performed to address the matters belowprovide the basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key audit matters How our audit addressed the key audit matter
Revenue recognition (as described in Note 14 of the standalone Ind AS financial statements)
The Company makes sales to various customers both domestic and international whereby the prices of the products are subject to negotiations based on various factors including crude oil prices movement in other variable costs volatility in foreign currencies level of offtake by customers and demand supply situation in carbon black market. Such prices are agreed through a formal contract. The discounts offered to these customers are mostly contractually agreed. Certain discounts are recognized as and when the negotiations thereon are completed and the rates are agreed or based on management's estimate and judgement. Sales are also affected based on varying delivery terms as agreed with the customers which determines the timing of recognition of such sales. Our audit procedures included the following:
• We have evaluated the Company's process and controls around revenue recognition estimation of discounts and timing of recognizing sales as per contractual terms including testing effectiveness of such controls.
• We have considered the contractual terms of the sales contracts and tested credit memos issued during the year and subsequent to the year-end.
• We have inquired of key sales personnel regarding retroactive pricing adjustments and discussed with management regarding their awareness of pricing negotiations that could affect current year revenue.
The amounts involved being material to these financial statements and dependent on various factors stated above revenue recognition was determined to be a key audit matter in our audit. • We obtained direct balance confirmations from customers on a sample basis as at the year-end. Performed alternate audit procedures where such confirmations could not be obtained.
• We have performed procedures on the Company's key components analysed the revenues cost of sales and discounts / incentives in comparison with historical data.
• We have analysed pricing adjustments and credit notes issued after the reporting date.
• We also discussed with the management on the likely timing of issuance of credit notes to customers where discounts have been recorded and are pending to be passed on to the concerned customers.
• We tested sample of sales transactions at the year-end to determine the timing of recognition of such sales.
• We also obtained necessary representation from the management in regard to the timing of revenue recognition.
Provisions for claims & litigations and disclosure of contingent liabilities (as described in Note 11.1 and Note 23 of the standalone Ind AS financial statements)
The Company is involved in litigations both for and against the Company comprising of tax matters legal compliances and other disputes. The Company assesses the need to make a provision or disclose a contingency on a case-to-case basis considering the underlying facts of each matter in consultation with its advisors and lawyers. This involves a high level of management judgement and assumptions which impact the risk assessment and consequential provisioning and disclosure of contingencies in the financial statements. Our audit procedures included the following:
• We evaluated and tested the Company's processes and controls for monitoring of claims litigations disputes compliances and assessment thereof for determining the likely outcome.
• We read the summary of the litigations prepared by the management and discussed the material cases to determine the Company's assessment of the likelihood and magnitude of any liability that may arise.
This area is significant to our audit since the completeness and accuracy of accounting and disclosures for contingencies is dependent on such management judgement and assumptions. • We obtained independent legal confirmations from the concerned lawyers where applicable to seek their opinion on the status of litigations and checked the management's judgements and assumptions.
• We discussed with the management including the Company's internal tax experts and head of legal matters to understand the basis of management's judgements and estimates.
• We obtained risk assessment of tax litigations from our tax specialists to assess management's judgements and assumptions on such matters.
• We read the minutes of the board meetings and tested the Company's legal expenses to determine the completeness of claims disputes and litigations.
• We tested the adequacy of disclosures in the standalone Ind AS financial statements.
• We also obtained necessary representation from the management in regard to the provisioning and disclosures in respect of the claims and Litigations.
Fair Valuation of investments in unquoted equity and preference shares (as described in Note 4(a) of the standalone Ind AS financial statements)
The Company has fair valued its non-current investments in unquoted equity and preference shares as at the year end. Determining the fair value of such unquoted investments requires valuation techniques which has been performed by independent valuation experts applying applicable valuation methodologies. Our audit procedures included the following:
• We obtained the last audited financial statements for the year ended March 31 2020 and the unaudited management certified financial statements / trial balance for the year ended March 31 2021 where relevant of the investee companies and traced the composition of the net asset value of such investee companies used in fair valuation exercise to the same.
The fair valuation of these investments being material to these financial statements was determined to be a key audit matter in our audit.
• We read such financial information to determine any matters which should have been considered for the valuation exercise and discussed with the management for the year ended March 31 2021 if there are any other significant developments since the last audited financial statements.
• We compared the fair valuation of such investments as on March 31 2021 with the fair valuation as on March 31 2020 and discussed with the concerned valuer and the management the reasons for changes to such fair valuation.
• Further we obtained Independence confirmation from the concerned valuers and assessed their competence.
• We also obtained suitable management representation as regards the fair valuation of these investments.

We have determined that there are no other key audit matters tocommunicate in our report.

Information Other than the Financial Statements and Auditor's ReportThereon

The Company's Board of Directors is responsible for the otherinformation.

The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures toBoard's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the standalone Ind AS financialstatements and our auditor's report thereon.

Our opinion on the standalone Ind AS financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the standalone Ind AS financialstatements our responsibility is to read the other information and in doing so considerwhether such other information is materially inconsistent with the 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.

Responsibilities of Management for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standaloneInd AS financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and the design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind ASFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance but is not a guarantee that anaudit conducted 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 Ind AS financialstatements.

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 Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to 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 thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the 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 conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind AS financial statements represent the underlying transactions and events ina manner that achieves 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 standalone IndAS financial statements for the financial year ended March 31 2021 and are therefore thekey audit matters. We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016(" the Order") issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the " Annexure 1" astatement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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 havebeen kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash Flow Statement and Statement of Changesin Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312021 from being appointed as a director in termsof Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlswith reference to these standalone Ind AS financial statements and the operatingeffectiveness of such controls refer to our separate Report in "Annexure 2" tothis report;

(g) I n our opinion the managerial remuneration for the year endedMarch 31 2021 has been paid / provided by the Company to its directors in accordance withthe provisions of section 197 read with Schedule V to the Act;

(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)Rules 2014 as amended in our opinion and to the best of our information and according tothe explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements - Refer Note 11.1 andNote 23 to the standalone Ind AS financial statements;

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on longtermcontracts including derivative contracts;

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

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/ E300005 per Kamal Agarwal
Partner
Membership Number: 058652
UDIN: 21058652AAAABF6459
Place of Signature: Kolkata
Date: April 21 2021

ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 OF THE SECTION ON "REPORT ONOTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR EVEN REPORT ON THE EVEN DATE

To

The Members of Phillips Carbon Black Limited

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

(b) All fixed assets have not been physically verified by themanagement during the year but there is a regular programme of verifying them once inthree years which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. As informed no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given by themanagement the title deeds of immovable properties included in property plant andequipment are held in the name of the Company.

(ii) The inventory has been physically verified by the managementduring the year. In our opinion the frequency of verification is reasonable. No materialdiscrepancies were noticed on such physical verification. Inventories lying with thirdparties have been confirmed by them as at March 31 2021 and no material discrepancieswere noticed in respect of such confirmations.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and(c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has not advanced loans to directors / to a company in which theDirector is interested to which provisions of section 185 of the Companies Act 2013 applyand hence not commented upon. In our opinion and according to the information andexplanations given to us provisions of section 186 of the Companies Act 2013 in respectof loans and advances given investments made and guarantees and securities given havebeen complied with by the Company.

(v) The Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(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 section 148(1) of the Companies Act 2013 related to the manufacture andsale of carbon black and sale of power and are of the opinion that prima facie thespecified accounts and records have been made and maintained. We have not however made adetailed examination of the same.

(vii) (a) The Company is regular in depositing with appropriateauthorities undisputed statutory dues including provident fund employees' stateinsurance income- tax sales-tax service tax duty of custom duty of excise valueadded tax goods and service tax cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insuranceincome- tax service tax sales-tax duty of custom duty of excise value added taxgoods and service tax cess and other statutory dues were outstanding at the year endfor a period of more than six months from the date they became payable.

(c) According to the records of the Company the dues of income-taxsales-tax service tax duty of custom duty of excise value added tax and cess onaccount of any dispute are as follows:

Name of the statute Nature of the Dues Amount (In crores) Period to which the amount relates Forum where the dispute is pending
Central Excise Act 1944 Excise Duty 1.26 1997 -98 to 1998-99 2003-04 to 2008-09 2012-13 to 2015-16 Commissioner (Appeals)
44.92 2004 -05 to 2016-17 Customs Excise and Service Tax Appellate Tribunal
Central Excise Act 1944 Excise Duty 0.03 2009 -10 Ministry of Finance
Central Excise Act 1944 read with Cenvat Credit rules 2004 Excise Duty 5.77 2008 -09 & 2010-2015 Customs Excise and Service Tax Appellate Tribunal
Service Tax 6.02 2012 -13 Customs Excise and Service Tax Appellate Tribunal
Central Sales Tax Act 1956 Central Sales Tax 4.47 1994 -95 to1995-96 1999-00 to 2000-01 High Court at Calcutta
0.27 2016 -17 to 2017-18 Joint Commissioner
1.39 2007 -08 Senior Joint Commissioner Commercial Taxes.
4.94 2003 -04 2011-12 to 2012-13 2015-16 West Bengal Commercial Taxes Appelllate & Revisional Board
Customs Act 1962 Customs Duty 0.09 2009 -10 2012-13 Customs Excise and Service Tax Appellate Tribunal
0.38 2006 -07 to 2010-11 Deputy Commissioner of Custom
0.12 2008 -09 Supreme Court
Gujarat Value Added Tax Act 2006 Value Added Tax 0.23 2006 -07 Gujarat Value Added Tax Tribunal
West Bengal Sales Tax Act 1994 Sales Tax 0.67 2003 -04 West Bengal Commercial Taxes Appellate & Revisional Board
0.83 1994 -95 to1995-96 1999-00 to 2000-01 2004-05 West Bengal Taxation Tribunal
West Bengal Value Added Tax Act 2003 Value Added Tax 2.90 2005 -06 2015-16 West Bengal Taxation Tribunal
0.16 2017 -18 Joint Commissioner
0.78 2007 -08 Senior Joint Commissioner Commercial Taxes.

(viii) In our opinion and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of loans or borrowingsto a financial institution or bank or government during the year. The Company did not haveany outstanding loans or borrowing from government or dues to debenture holders during theyear.

(ix) According to the information and explanations given by themanagement the Company has utilized the monies raised by way of term loans for thepurposes for which they were raised.

(x) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management we report that no fraud by theCompany or no material fraud on the Company by the officers and employees of the Companyhas been noticed or reported during the year.

(xi) According to the information and explanations given by themanagement the managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act 2013.

(xii) In our opinion the Company is not a nidhi company. Thereforethe provisions of clause 3(xii) of the order are not applicable to the Company and hencenot commented upon.

(xiii) According to the information and explanations given by themanagement transactions with the related parties are in compliance with section 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in thenotes to the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and onan overall examination of the balance sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence reporting requirements under clause 3(xiv) are notapplicable to the company and not commented upon.

(xv) According to the information and explanations given by themanagement the Company has not entered into any noncash transactions with directors orpersons connected with him as referred to in section 192 of Companies Act 2013.

(xvi) According to the information and explanations given to us theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/ E300005
per Kamal Agarwal
Partner
Membership Number: 058652
UDIN: 21058652AAAABF6459
Place of Signature: Kolkata
Date: April 21 2021

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF PHILLIPS CARBON BLACK LIMITED

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference tostandalone financial statements of Phillips Carbon Black Limited ("the Company")as of March 31 2021 in conjunction with our audit of the standalone financial statementsof the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to theCompany'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 Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to these standalone financial statements basedon our audit. We conducted our audit in accordance with the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting (the "Guidance Note") andthe Standards on Auditing as specified under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both issued by 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 these standalone financial statements was establishedand maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to these standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to standalone financial statements included obtaining anunderstanding of internal financial controls with reference to these standalone financialstatements assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

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

Meaning of Internal Financial Controls With Reference to theseStandalone Financial Statements

A company's internal financial controls with reference tostandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial controls with reference to standalonefinancial statements includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With Reference toStandalone Financial Statements

Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at March 31 2021 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note issued by the ICAI.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/ E300005
per Kamal Agarwal
Partner
Membership Number: 058652
UDIN: 21058652AAAABF6459
Place of Signature: Kolkata
Date: April 21 2021

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