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Sharda Cropchem Ltd.

BSE: 538666 Sector: Agri and agri inputs
NSE: SHARDACROP ISIN Code: INE221J01015
BSE 12:58 | 08 Dec 314.20 2.45
(0.79%)
OPEN

312.25

HIGH

316.00

LOW

311.40

NSE 12:49 | 08 Dec 313.60 2.50
(0.80%)
OPEN

314.80

HIGH

318.20

LOW

311.90

OPEN 312.25
PREVIOUS CLOSE 311.75
VOLUME 7574
52-Week high 387.05
52-Week low 230.75
P/E 11.43
Mkt Cap.(Rs cr) 2,835
Buy Price 313.75
Buy Qty 2.00
Sell Price 314.75
Sell Qty 4.00
OPEN 312.25
CLOSE 311.75
VOLUME 7574
52-Week high 387.05
52-Week low 230.75
P/E 11.43
Mkt Cap.(Rs cr) 2,835
Buy Price 313.75
Buy Qty 2.00
Sell Price 314.75
Sell Qty 4.00

Sharda Cropchem Ltd. (SHARDACROP) - Auditors Report

Company auditors report

To the Members of Sharda Cropchem Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Sharda Cropchem Limited(hereinafter referred to as "the Company") which comprise the standalonebalance sheet as at 31 March 2021 and the standalone statement of profit and loss(including other comprehensive income) standalone statement of changes in equity andstandalone statement of cash flows for the year then ended and notes to the standalonefinancial statements including a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the standalone financialstatements").

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 trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31 March 2021 and profit and 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 Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

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

Description of Key Audit Matters

Revenue recognition and sales returns (Refer note 2.7 and 2A)

Key audit matter How our audit addressed the key audit matter
Revenue recognition
(Refer note :- 2.7 to the standalone financial statements) In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:-
The Company's revenue is derived primarily from sale of products. The principal products of the Company comprise agro-chemicals. — Assessed the appropriateness of Company's accounting policies relating to revenue recognition as per the applicable accounting standard;
Revenue from sale of goods is recognised on transfer of control of the products to the customer. The Company uses a variety of shipment terms across its operating markets and this has an impact on the timing of revenue recognition. The performance obligations in the contracts may be fulfilled at the time of dispatch delivery formal customer acceptance or upon surrender of bill of lading in the favor of customer depending on contract terms. — Obtained an understanding of the Company's sales process and evaluated the design and implementation of key internal controls in relation to the timing of revenue recognition. We also tested the operating effectiveness of such controls for a sample of transactions with special reference to controls over revenue recognised on and around the year end;
— For a sample of sale transactions selected using sampling performed detailed testing and in particular examined whether these are recognised in the period in which control is transferred. This included examination of the terms and conditions of the customer orders including the shipping terms transporter documents and customer acceptances;
There is a risk that revenue could be recognised at a time which is different from transfer of control especially for sales transactions occurring on and around the reporting period. In view of this and since revenue is a key performance indicator of the Company we have identified timing of the revenue recognition as a key audit matter. — Selected revenue transactions on a sample basis recorded during specified period around the year end date and checked whether revenue has been recognised in the correct reporting period by examining the underlying documents;
— Tested sample journal entries for revenue recognised during the year selected based on specified risk-based criteria to identify unusual transactions.
Sales returns In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:-
As disclosed in Note 2A to the standalone financial statements revenue is recognised net of sales returns. Estimation of sales returns involves significant judgement and estimates. — Obtained an understanding of the Company's process for identifying and determining the amount of accrual of sales returns;
Estimation of sales returns involves significant judgement and estimates. The estimation is dependent on various internal and external factors. These factors include for example climatic conditions the length of time when a sale is made and when the sales return takes place some of which are beyond the control of the Company. — Assessed the appropriateness of Company's accounting policies relating to accounting for sales returns as per the applicable accounting standard;
— We evaluated the design and tested the operating effectiveness of the relevant key financial controls with respect to recognition and accrual of sales returns;
The value of sales returns together with the level of judgement involved resulted in sales returns being a key audit matter. — On a sample basis we evaluated the basis of sales returns by agreeing amounts recognised to the approvals;
— W e assessed the assumptions and judgements used in sales return provision by comparing against historical trends returns and subsequent actual sales returns.

Impairment testing of other intangible assets and intangible assets under development(Refer note 2.11)

Key audit matter How our audit addressed the key audit matter
Assessment of impairment of intangible assets and intangible assets under development In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:-
As disclosed in Note 2.11 The Company's intangible assets comprised product registrations and licenses. — Obtained an understanding of the Company's process for determining likelihood of product registration future benefits expected from product registrations in the specific regions using discounted future cash flows;
The carrying amount of the intangible assets and intangible assets under development represents 24.32% of the Company's total assets. — Comparing the Company's assessment with the past trend of product registrations awarded;
The Company applies for product registrations in different countries to sell its products. As disclosed in Note 4 and 4A to the standalone financial statements the Company capitalizes costs incurred to apply for product registrations. — We assessed the assumptions around the key drivers of the cash flow forecasts including discount rates expected growth rates and terminal growth rates used;
The impairment assessment is performed based on value in use of product registrations for the specific regions. — We compared the cash flow forecasts to approved budgets and other relevant market and economic information as well as testing the underlying workings;
The measurement of value of intangible assets involves significant judgments and estimates in the Company's annual impairment assessment the significance and magnitude of the costs capitalised and likelihood of obtaining product registration. — W e assessed Company's sensitivity analysis over the key assumptions to determine any possible change in these assumptions which would result in an impairment;
We identified the measurement of value of intangible assets and intangible assets under development as a key audit matter. — W e involved our valuation expert to assess the assumptions and methodology used by the Company to determine the recoverable amount;
— Assessing the adequacy of the Company's disclosures related to the impairment tests and their compliance with Ind AS.

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 and Board of Directors' Responsibility for the Standalone FinancialStatements

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 standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible 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 the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities 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 standalone financial statements inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going 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's report tothe related disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of 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 othermatters 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 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

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the "Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order to the extent applicable.

2. (A) As required by Section 143(3) of the Act we (a) W e have sought and obtainedall the and explanations which to the best of our knowledge and belief were necessary forthe purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) 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.

(d) In our opinion the aforesaid standalone statements comply with the Ind ASspecified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31 March 2021 onits financial position in its standalone financial statements - refer note 31 to thestandalone financial statements; report that:

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - refer note 35 to the standalone financial statements;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; 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 2021.

(C) With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act: In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) ofthe Act which are required to be commented upon by us.

For B S R & Associates LLP
Chartered Accountants
Firm's Registration No: 116231W/W-100024
Shabbir Readymadewala
Partner
Mumbai Membership No: 100060
May 26 2021 UDIN : 21100060AAAACG5124

Annexure A to the Independent Auditors' Report 31st March 2021

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

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all the fixed assets are verified annually. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its assets. In our opinion and according to information and explanations givento us no material discrepancies were identified on such physical verification.

(c) According to the information and explanations given to us there are no immovableproperties included in fixed assets of the Company. Accordingly paragraph 3(i)(c) of theOrder is not applicable to the Company.

(ii) The inventory comprises stocks lying with third parties and goods-in-transit. Inorder to confirm existence of inventories the management follows the practice of physicalverification of the inventories lying with the third parties. However due to Covid-19pandemic and the consequent global lockdown the management was not able to conductphysical verification at all locations though physical verification has been performed atcertain locations. For inventory lying with third parties at the year-end writtenconfirmations have been obtained by the management and in respect of goods-in-transitsubsequent goods receipts have been verified. The discrepancies noticed between physicalstock as confirmed by the third parties and the book records were not material and havebeen properly dealt with in the books of account.

(iii) (a) According to the information and explanations given to us and based on theaudit procedures conducted by us we are of the opinion that the terms and conditions ofunsecured loan granted by the Company to a company covered in the register maintainedunder Section 189 of the Act were not prejudicial to the interest of the Company.

(b) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that there is no stipulation of scheduleof repayment of principal for the aforementioned unsecured loan and in absence thereof weare unable to comment on the regularity of the repayment of principal.

(c) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that there are no overdue amounts inrespect of the loan granted to a company listed in the register maintained under Section189 of the Act.

(iv) In our opinion and according to the information explanations given to us and basedon the audit procedures conducted by us the Company has complied with provisions ofSection 185 and 186 of the Act with respect to loan granted and investments made.Further the Company has not given any guarantee or provided any security under Section185 and 186 of the Act.

(v) In our opinion and according to the information explanations given to us theCompany has not accepted deposits within the meaning of the directives issued by theReserve Bank of India provisions of Sections 73 to 76 any other relevant provisions ofthe Act and the rules framed thereunder. Accordingly paragraph 3 (v) of the Order is notapplicable to the Company.

(vi) W e have broadly reviewed the books of account by the Company as specified underSection 148(1) of the Act for maintenance of cost records in respect of productsmanufactured by the Company and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income tax Goods and Services Tax Duty of Customs Cess and other materialstatutory dues have been generally regularly deposited during the year by the Company withthe appropriate authorities. According to the information and explanations given to us noundisputed amounts payable in respect of Provident fund Employees' State InsuranceIncome tax Goods and Services tax Duty of customs Cess and other material statutorydues were in arrears as at 31 March 2021 for a period of more than six months from thedate they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome tax Duty of customs Duty of excise Sales tax Service tax Value added tax andGoods and Services tax as at 31 March 2021 which have not been deposited with theappropriate authorities on account of any dispute except as stated below:

Name of Act Nature of Dues Amount Demanded Amount not Deposited Under Dispute Period to which amount relates Forum where dispute is pending
(INR in lakhs) (INR in lakhs)
Finance Act 1994 Service Tax 785.14 785.14 2007-08 to 2012-13 CESTAT
Income Tax Act 1961 Income Tax 565.92 565.92 AY 2015-16 Commissioner of Income Tax (Appeal)
2563.96 2065.29 AY 2016-17 Assistant Commissioner of Income Tax
5057.29 4257.29 AY 2017-18 Assistant Commissioner of Income Tax
2830.29 2830.29 AY 2018-19# Assistant Commissioner of Income Tax

#The Income tax department has adjusted a refund pertaining to AY 2019-20 against netdemand of AY 2018-19.

(viii) In our opinion and according to the explanations given to us the Company hasnot defaulted in repayment of loan or borrowing to the bank. The Company has not taken anyloans or borrowings from any financial institution or government nor has it issueddebentures during the year.

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

(x) 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 fraud by the Company or any material instances of fraud on the Company by itsofficers or employees noticed or reported during the year nor have we been informed ofany such case by the management.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the explanations given to us the Company is nota 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.

(xiii)and According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable Indian Accounting Standards (Ind AS).

(xiv) 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 partly convertible debentures duringthe year. Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on 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.

(xvi) 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 & Associates LLP
Chartered Accountants
Firm's Registration No: 116231W/W-100024
Shabbir Readymadewala
Partner
Mumbai Membership No: 100060
May 26 2021 UDIN : 21100060AAAACG5124

Annexure B to the Independent Auditors' Report 31st March 2021

Report on the Internal Financial Controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (Referred to in paragraph 2(A)(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to standalone financialstatements of Sharda Cropchem Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 2021 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 financial controls withreference to standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. 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 standalone financial statements were established andmaintained and 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 with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditors' judgement including theassessment of the risks of material misstatement of the standalone financial statementswhether due to fraud or error. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the Company'sinternal financial controls with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to Standalone FinancialStatements

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to standalone financial statements include thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.

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 controls 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 & Associates LLP
Chartered Accountants
Firm's Registration No: 116231W/W-100024
Shabbir Readymadewala
Partner
Mumbai Membership No: 100060
May 26 2021 UDIN : 21100060AAAACG5124

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