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Prozone Intu Properties Ltd.

BSE: 534675 Sector: Infrastructure
NSE: PROZONINTU ISIN Code: INE195N01013
BSE 00:00 | 25 Sep 15.85 0.50
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15.20

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16.10

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15.20

NSE 00:00 | 25 Sep 15.95 0.60
(3.91%)
OPEN

15.20

HIGH

16.10

LOW

15.20

OPEN 15.20
PREVIOUS CLOSE 15.35
VOLUME 30923
52-Week high 28.55
52-Week low 7.45
P/E 51.13
Mkt Cap.(Rs cr) 242
Buy Price 15.95
Buy Qty 518.00
Sell Price 16.10
Sell Qty 1000.00
OPEN 15.20
CLOSE 15.35
VOLUME 30923
52-Week high 28.55
52-Week low 7.45
P/E 51.13
Mkt Cap.(Rs cr) 242
Buy Price 15.95
Buy Qty 518.00
Sell Price 16.10
Sell Qty 1000.00

Prozone Intu Properties Ltd. (PROZONINTU) - Auditors Report

Company auditors report

To the Members of

Prozone Intu Properties Limited

Report on the Audit of the Standalone financial statements

Opinion

We have audited the standalone financial statements of Prozone Intu Properties Limited("the Company") which comprise the standalone balance sheet as at 31 March2019 the standalone statement of profit and loss (including other comprehensive income)the standalone statement of changes in equity and the standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "standalone financial statements").

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 ('the Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 and loss (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditors' Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Emphasis of Matter

We draw attention to Note 36 to the standalone financial statements relating toremuneration paid to the Managing Directors and the Deputy Managing Director of theCompany for the financial year ended 31 March 2019 with effect from 1 October 2018. Theincrease in remuneration of ' 60 lakhs is subject to the approval of the shareholders inthe ensuing annual general meeting. Our opinion is not modified in respect of this matter.

Key Audit Matters

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.

Investments in subsidiaries and joint venture companies and loans to subsidiaries andjoint venture companies (refer note 5 6 and 13 to the standalone financial statements)

The Key Audit Matter How the matter was addressed in our audit
The carrying amount of the investments in subsidiaries and joint venture companies held at fair value through other comprehensive income (FVOCI) represents 92.04% and the loans to subsidiaries and joint venture companies represents 4.64% of the Company's total assets respectively. Valuation of investment in subsidiaries and joint venture companies
Valuation of investment in subsidiaries and joint venture companies Our audit procedures included:
The Company has investments in subsidiaries and joint venture companies which are considered to be associated with significant risk in respect of valuation of such investments. The investments are carried at FVOCI. The valuation process involves significant judgement by the management including involvement of independent external valuers in estimating the underlying assumptions to be applied. The fair values of the investments is assessed based on the relative fair value of the underlying properties comprising of residential commercial and retail units in these underlying entities located principally in Aurangabad Coimbatore Nagpur Indore and Jaipur. This assessment is based on the projected cash flows of the real estate projects in these underlying entities which involve significant estimates andjudgement due to the inherent uncertainty involved in forecasting future cash flows. There is significant judgment involved in also estimating the appropriate discount rate terminal occupancy future lease rentals capitalisation rate average unit size and average selling price. The fair value of the properties is further adjusted from the perspective of equity shareholders to arrive at the equity value. A change in the assumptions will have an impact on the valuation. • We have obtained and inspected the valuation reports obtained by the Company from independent external valuers engaged by the Company;
In addition considering the materiality of the investments in subsidiaries and joint venture vis-a-vis the total assets of the Company this is considered to be significant to our overall audit strategy and planning. • We have evaluated the qualifications and competence of the valuers and held discussions with the valuers to understand their valuation methods and assumptions and basis used where appropriate;
• We considered the valuation methodologies used against those applied by valuers for similar property types. We tested the integrity of inputs of the projected cash flows used in the valuation to supporting leases and other documents;
• We have involved internal valuation specialists who have evaluated the appropriateness of the discount capitalisation and terminal yield rates used in the valuation by comparing them against historical rates and available industry data taking into consideration comparability and market factors;
• We performed a sensitivity analysis over key assumptions including the discount and growth rates;
• We have considered the cash flow projections reflect the most recent forecast as approved by the management in consultation with the valuer; and
• We have considered the adequacy of disclosures in respect of the investment in subsidiaries and joint venture companies.
Recoverability of loans to subsidiaries and joint venture companies Recoverability of loans to subsidiaries and joint venture companies
The Company has extended loans to subsidiaries and joint venture companies that are assessed for recoverability at each period end. Our procedures included:
Financial assets which include non- current and current loans to subsidiaries and joint venture companies aggregated to Rs 5712.82 lakhs at 31 March 2019. • We reviewed the controls in place for issuing new loans and evidenced the Board of Directors approval obtained. We obtained management's assessment of the recoverability of the loans which includes cash flow projections over the duration of the loans. These projections are based on underlying property development appraisals;
Due to the nature of the business in the real estate industry the Company is exposed to risk in respect of the recoverability of the loans and advances granted to the aforementioned related parties • We tested cash receipts received in relation to these loans during the year through to bank statement; and
There is also judgment involved as to the recoverability of the working capital and project specific loans. • We have obtained independent confirmations to ensure completeness and existence of loans and advances held by related parties as on 31 March 2019.
Revenue recognition (refer note 25 to the standalone financial statements)
The Company is engaged in providing management consultancy services related to developing owning and operating of shopping malls commercial and residential premises to its subsidiaries. • We assessed the design implementation and operating effectiveness of key controls over revenue recognition anc tested controls over revenue;
Revenue is recognised at a point in time upon satisfaction of the performance obligations which is typically upon rendering of services based on the contractual terms with its subsidiaries. • We have carried out substantive procedures involving analytica procedures such as recomputation of revenue and test o details involving basis of allocation of employees costs to its subsidiaries reviewed time sheets maintained by the Company relating to its employees working on the ongoing/completed projects and rationale for the margin charged to its subsidiaries;
We have identified revenue as a key audit matter because revenue is one of the key performance indicators of the Company which gives rise to an inherent risk that revenue could be subject to manipulation to meet targets or expectations • We have inspected agreements entered into between the Company and its subsidiaries to ensure that revenue is correctly accounted for;
Revenue is computed based on (i) employee cost plus margin approach (towards recovery of operating expenses) for employees working in the payroll of the Company and (ii) at a certain margin of total employee cost for employees on the payroll of its subsidiaries. • We have discussed and challenged key management judgments involved in interpreting the contractual terms;
This approach involve significant judgement and estimates made by the management in terms of time spent by the respective employees on the ongoing/completed projects in its subsidiaries and ascertaining the amount to be charged to its subsidiaries. • We reviewed journal entries for any evidence of management override and obtained evidence to corroborate individually unusual and/or material revenue journals; and
• We have reconciled the employee costs with the underlying supporting such as salary register.

Other Information

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

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 and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Standalone Financial Statements

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

In preparing the standalone financial statements management and Board of Directors areresponsible 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.

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

Auditors' Responsibility for the Audit of the Standalone financial statements

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 SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial 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 the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

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 the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

(A) As required by Section 143(3) of the Act we report that:

(i) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(ii) in our opinion proper books of account as required by law have been kept by theCompany so far as it appears 2 from our examination of those books;

(iii) the standalone balance sheet the standalone statement of profit and loss(including other comprehensive income) the standalone statement of changes in equity andthe standalone statement of cash flows dealt with by this report are in agreement with thebooks of account;

(iv) in our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act;

(v) on the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164(2) of the Act; and

(vi) with respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the

Auditors'Report in accordance with Rule 11 of the Companies

(Audit and Auditors) Rules 2014 in our opinion and to the

best of our information and according to the explanations ~

i. the Company has disclosed the impact of pending litigations as at 31 March 2019 onits financial position in its standalone financial statements - Refer Note 32 to thestandalone financial statements;

ii. the Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses;

iii. there are no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended 31 March 2019; and

iv. the disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these standalone financial statements since they do not pertainto the financial year ended 31 March 2019.

(C) With respect to the matter to be included in the Auditors'

Report under Section 197(16) of the Act we report that:

i. we draw attention to note 36 to the standalone financial statements relating toremuneration paid to the Managing Director and the Deputy Managing Director of the Companyfor the financial year ended 31 March 2019 being in excess of the limits prescribed underSection 197 of the Act by ' 60 lakhs which is subject to the approval of theshareholders. Our opinion is not modified in respect of this matter; and

ii. the Ministry of Corporate Affairs has not prescribed other details under Section197(16) of the Act which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Mansi Pardiwalla
Place: Mumbai Partner
Date: 29 May 2019 Membership No: 108511

Annexure A to the Independent Auditors' Report -

31 March 2019

With reference to the Annexure A referred to in the Independent Auditors' Report to themembers of the Company on the standalone financial statements for the year ended 31 March2019 we report the following:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets including property plant and equipmentand investment property.

(b) The Company has a regular programme of physical verification of its fixed assetsincluding property plant and equipment and investment property by which the fixed assetsincluding property plant and equipment and investment property are verified annually. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. In accordance with the policy theCompany has physically verified its fixed assets including property plant and equipmentand investment property during the year and we are informed that no material discrepancieswere noticed on such verification and the same have been dealt with in the books ofaccount.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties asdisclosed in Note 4 to the standalone financial statements was vested to the Company asper the Composite Scheme of Arrangement and Amalgamation during the year ended 31 March2012 are not held in the name of the Company. Details of the same is as below:

Land / building Number of cases Freehold Notes in the Standalone financial statements Gross block (Rs in lakhs) Net block (Rs in lakhs) Remarks
Building 1 Freehold 4 95.22 81.60 Held in the name of erstwhile demerged Company.

(ii) The Company does not currently hold any physical inventory. Accordingly therequirement under paragraph 3(ii) of the Order is not applicable to the Company.

(iii) The Company has granted unsecured loans to nine companies covered in the registermaintained under Section 189 of the Companies Act 2013 ('the Act'). The Company has notgranted any loans secured or unsecured to limited liability partnership firms or otherparties covered in the register required to be maintained under Section 189 of the Act.

(a) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that the rate of interest and otherterms and conditions of unsecured loans granted by the Company to the companies covered inthe register required to be maintained under Section 189 of the Act are not prima facieprejudicial to the interest of the Company.

(b) According to the information and explanations given to us the terms of lendingarrangements do not stipulate any repayment of principal and payment of interest andunsecured loans granted to companies covered in the register maintained under Section 189of the Act are repayable on demand. The borrowers have been regular in payment ofprincipal and interest as demanded.

(c) There are no overdue amounts for more than 90 days in respect of the unsecuredloans granted to companies covered in the register maintained under Section 189 of theAct.

(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any guarantees or security to the partiescovered under Section 185 of the Act. The Company has complied with the provisions ofSection 186 of the Act in respect of the loans given investments made and guaranteegiven. The Company has not provided any security to the parties covered under Section 186of the Act. Accordingly ^ the provisions of Section 186 of the Act in respect ofsecurities given are not applicable to the Company.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia and the provisions of Sections 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. Accordingly paragraph 3(v) of the Order is notapplicable to the Company.

(vi) The Central Government has not prescribed the maintenance of cost records underSection 148(1) of the Act for the services rendered by the Company. Accordingly paragraph3(iv) of the Order is not applicable to the Company.

(a) According to the information and explanations given to us and on the basis of ourexamination of records of the Company amounts deducted / accrued in the books of accountin respect of undisputed statutory dues including Provident fund Income-tax Goods andServices tax Professional tax Cess and other material statutory dues have been regularlydeposited during the year by the Company with the appropriate authorities.

As explained to us the Company did not have any dues on account of Employees' StateInsurance.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Professional tax Income-tax Goods and Servicestax Cess and other material statutory dues were in arrears as at 31 March 2019 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofGoods and Service tax which have not been deposited with the appropriate authorities onaccount of any dispute. According to the information and explanations given to usfollowing dues of Income tax have not been deposited by the Company on account ofdisputes:

(RS in lakhs)

Name of the statute Nature of the dues Amount of demand under dispute (Rs) Amount under dispute not deposited (Rs) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income-tax (interest thereon not ascertainable at present) 14.87 14.87 AY 2010-2011 Income Tax Appellate Tribunal (appeal)

(vii) In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowings to banks during the year.The Company did not have any dues to debenture holders and loans or borrowings from anyfinancial institution or government during the year.

(viii) According to the information and explanations given to us and based on ourexaminations of the record of the Company the Company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments) and have notobtained any term loans during the year. Accordingly paragraph 3(ix) of the Order is notapplicable to the Company.

(ix) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.

(x) According to the information and explanations given to us and based on ourexamination of the records of the Company due to inadequate profits during the currentyear the managerial remuneration paid to the directors of the Company is in excess of thelimits specified under Section 197 of the Act read with Schedule V to the Act. The Companyis in the process of obtaining approval from Shareholders for such excess remunerationpaid. Refer note 36 of the Standalone financial statements.

(xi) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company and the Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3(xii) of the Order is not applicable to the Company.

(xii) In our opinion and according to the information and explanations given to us theCompany has entered into transactions with related parties in compliance with theprovisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the standalone financial statements as required byIndian Accounting Standard (Ind AS) 24 Related Party Disclosures specified under Section133 of the Act.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partially convertible debenturesduring the year. Accordingly paragraph 3(xiv) of the Order is not applicable to theCompany.

(xiv) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Mansi Pardiwalla
Place: Mumbai Partner
Date: 29 May 2019 Membership No: 108511

Annexure B to the Independent Auditors' Report -

31 March 2019

Report on the Internal Financial Controls with reference to the aforesaid Standalonefinancial statements under Clause (i) of Subsection 3 of Section 143 of the Companies Act2013 ("the Act")

(Referred to in paragraph (A) (f) under 'Report on Other Legal and RegulatoryRequirements'section of our report of even date)

Opinion

We have audited the internal financial controls with reference to Standalone FinancialStatements of Prozone Intu Properties Limited ("the Company") as of 31 March2019 in conjunction with our audit of the Standalone Financial Statements of the Companyfor the year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to Standalone Financial Statements and such internal financialcontrols were operating effectively as at 31 March 2019 based on the internal financialcontrols with reference to Standalone Financial Statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal controls with referenceto Standalone Financial Statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with respect to Standalone Financial Statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing prescribedunder Section 143 (10) of the Act to the extent applicable to an audit of internalfinancial controls with reference to Standalone Financial Statements. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to Standalone Financial Statements were established and maintainedand whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with respect to Standalone Financial Statements andtheir operating effectiveness. Our audit of internal financial controls with respect toStandalone Financial Statements included obtaining an understanding of internal financialcontrols with respect to Standalone Financial Statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors' judgement including the assessment of the risks of materialmisstatement of the Standalone Financial Statements whether due to fraud or error.

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 systemwith reference to Standalone Financial Statements.

Meaning of Internal Financial Controls with reference to Standalone FinancialStatements

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 StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference toStandalone 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 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.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Mansi Pardiwalla
Place: Mumbai Partner
Date: 29 May 2019 Membership No: 108511

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