We have audited the accompanying standalone financial statements of Shriram TransportFinance Company Limited ("the Company") which comprise the as at March 312021 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the standalone financial statements including a summary of significantaccounting 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 trueand fair view in conformity with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards ("Ind AS") prescribed under section133 of the Act of the state of affairs of the Company as at March 31 2021 its profit(including other comprehensive income) changes in equity and its cash flows for the yearended on that date.
Basis for Opinion
We conducted our audit in accordance with Standards on Auditing (SAs) specified undersection 143(10) of the Act. Our responsibilities under those Standards 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 with theCode of Ethics issued by the Institute of Chartered Accountants of India("ICAI") together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Act and Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on thestandalone financial statements.
Emphasis of Matter
We draw attention to Note 63 to the standalone financial statements which describes thestaging of accounts to whom moratorium benefit was extended and uncertainty caused byCOVID-19 pandemic with respect to the Company's estimates of Impairment of loans tocustomers. Further the extent to which the COVID-19 pandemic will impact the Company'sfinancial performance is dependent on future developments which are highly uncertain. Ouropinion 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 year.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. We have determined the matters described below to bethe key audit matters to be communicated in our report.
Impairment Loss Allowance of loans and advances
Impairment loss allowance of loans and advances ("Impairment loss allowance")is a Key Audit Matter as the Company has significant credit risk exposure considering thelargeloanportfolioacrossawidegeographicalrange. evalue of loans and advances on the issignificant and there is a high degree of complexity and judgment involved in estimatingindividual and collective credit impairment provisions write-o_s against these loans andto additionally determine the potential impact of unprecedented COVID 19 pandemic on assetquality and provision of the Company. Company's model to calculate expected credit loss("ECL") is inherently complex and judgment is applied in determining the correctconstruction of the three-stage impairment model ("ECL Model") including theselection and input of forward looking information. ECL provision calculation require theuse of large volumes of data. completeness and reliability of data can significantlyimpact accuracy of the modelled impairment provisions. accuracy of data flows and theimplementation of related controls are critical for the integrity of the estimatedimpairment provisions.
Audit Procedures included but were not limited to the following:
We have started our audit procedures with understanding of the internal controlenvironment related to Impairment loss allowance. Our procedures over internal controlsfocused on recognition and measurement of impairment loss allowance. We assessed thedesign and tested the operating effectiveness of the selected key controls implemented bythe Company. We also assessed whether the impairment methodology used by the Company is inaccordance with the assumptions and methodology approved by the Board of Directors of theCompany which is based on and in compliance with
Ind AS 109 "Financial Instruments". Particularly we assessed the approach ofthe Company regarding definition of Default Probability of Default Loss Given Defaultand incorporation of forward-looking information for the calculation of ECL. For loans andadvances which are assessed for impairment on a portfolio basis we performed particularlythe following procedures:
We tested the reliability of key data inputs and related management controls;
We checked the stage classification as at the date as per the definition of Default ofthe Company;
We validated the ECL Model and its calculation by involving our Information TechnologyExpert;
We have checked on sample basis that the stage classification for the borrowers hasbeen given in accordance with the Resolution Framework issued by Reserve Bank ofIndia (theRBI') and the Board approved policy for ECL provisioning and stage classificationwith respect to such accounts;
We have verified whether the ECL provision is made in accordance with the BoardApproved Policy in this regard;
We have also calculated the ECL provision manually for selected samples;
We have assessed the assumptions made by the
Company in making accelerated provision considering forward looking information andbased on an event in a particular geographical range;
We have reviewed the process of the Company to grant moratorium to the borrowers as perthe Regulatory Package announced by the RBI. Further we have relied on the assumption ofthe management that there will be no significant increase in the credit risk in the caseswhere moratorium is given and that the staging based on the days past due (DPD) will beconsidered as per the RBI COVID-19 Regulatory Package. We have tested on samples basis theDPD freeze for cases where moratorium is provided and not provided in accordance with RBICOVID-19 Regulatory Package;
With respect to additional provision made by the
Company on account of the impact of COVID-19 pandemic we broadly reviewed theunderlying assumptions and estimates used by the management for the same but as the extentof impact is dependent on future developments which are highly uncertain we haveprimarily relied on those assumptions and estimates. These assumptions and estimates are asubject matter of periodic review by the Company; and
We have checked the provision on Loan Assets as per IRACP norms as required under RBIcircular dated March 13 2020. We have checked the DPD and provision in accordance withthe RBI regulations in that regard further considering the Regulatory Packages issued byRBI dated March 27 2020 and May 23 2020 and RBI circular dated April 17 2020.
For loans and advances which are written off during the year under audit we read andunderstood the methodology and policy laid down and implemented by the Company in thisregards along with its compliance on sample basis.
Company's Board of Directors is responsible for the other information. otherinformation comprises the information included in the Management Discussion and AnalysisDirector's Report and Corporate Governance Report but does not include the standalonefinancial statements consolidated financial statements and our auditor's 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 ouraudit of the standalone financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
Company's Board of Directors is responsible for the matters stated in section 134(5) ofthe Act with respect to the preparation of these standalone financial statements that givea true and fair view of the financial position financial performance (including othercomprehensive income) changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including Ind AS prescribed undersection 133 of the Act read with the Companies (Indian Accounting Standards)
Rules 2015 as amended. is responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassetsof the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.Inpreparingthestandalonefinancialstatementsmanagement is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
ose Board of Directors are 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 this standalone financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. risk of not detecting a material misstatement resulting from fraudis higher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)
(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls with reference to financial statements inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation. We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant de_ciencies 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 year and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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 (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of section 143(11) of the Act we givein "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable. (2) As required by section 143(3) of the Act wereport that: a. We have sought and obtained all the information and explanations which tothe best of our knowledge and belief were necessary for the purposes of our audit; b. Inour opinion proper books of account as required by law have been kept by the Company sofar as it appears from our examination of those books; c. the Statement of Profit andLoss (including Other Comprehensive Income) the Statement of Changes in Equity and theStatement of Cash Flows dealt with by this report are in agreement with the books ofaccount; d. In our opinion the aforesaid standalone financial statements comply with theInd AS prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended; e. On the basis of the written representationsreceived from the directors as on March 31 2021 and taken on record by the Board ofDirectors none of the directors is disqualified as on March 31 2021 from being appointedas a director in terms of section 164(2) of the Act; f. With respect to the adequacy ofthe internal financial controls with reference to financial statements of the Company andthe operating effectiveness of such controls refer to our separate report in"Annexure 2"; g. With respect to the other matter to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Act: In ouropinion and to the best of our information and according to the explanations given to usthe remuneration paid/ provided by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act; h. With respect to the othermatters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us: (i) Company has disclosed the impact of pendinglitigations on its financial position in its standalone financial statements ReferNote 49 on Contingent Liabilities to the standalone financial statements; (ii) Company hasmade provision as required under the applicable law or accounting standards for materialforeseeable losses if any on long-term contracts including derivative contracts Refer Note 10 to the standalone financial statements; (iii) There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company.
[Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' section in the Independent Auditor's Report of even date to the members ofShriramTransport Finance Company Limited on the standalone Ind AS financial statements forthe year ended March 31 2021] Based on the audit procedures performed for the purpose ofreporting a true and fair view on the standalone Ind AS financial statements of theCompany and taking into consideration the information and explanations given to us and thebooks of account and other records examined by us in the normal course of audit we reportthat: (i) (a) Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. (b) During the year the fixed assetsof the Company have been physically verified by the management and no materialdiscrepancies were noticed on such verification. In our opinion the frequency ofverification is reasonable having regard to the size of the Company and the nature of itsassets. (c) Based on the examination of the registered sale deed/transfer deed and otherrelevant records evidencing title / possession provided to us we report that the titledeeds of all the immovable properties comprising of land and buildings which are freeholdother than self - constructed assets included in Property Plant and Equipment are heldin the name of the Company as at the date.
(ii) Company is in the business of providing services and does not have any inventory.Accordingly clause 3(ii) of the Order is not applicable. (iii) Company has not grantedany loans secured or unsecured to companies firms Limited Liability Partnerships orother parties covered in the register maintained under section 189 of the Act.Accordingly clause 3(iii) of the Order is not applicable to the Company.
(iv) Company has complied with the provisions of sections 185 and 186(1) of the Act inrespect of grant of loans making investments and providing guarantees and securities asapplicable. Further the provisions of Section 186 except for Section 186(1) of the Actare not applicable to the Company as it is engaged in the business of financing.
(v) In our opinion the Company has complied with the directives issued by Reserve Bankof India the provisions of sections 73 to 76 of the Act and the rules framed there underwith regard to the acceptance of deposits. Further no Order has been passed by theCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any Courtor any other Tribunal on the Company in respect of the aforesaid deposits.
(vi) Central Government has not prescribed the maintenance of cost records for any ofthe products of the Company under sub-section (1) of section 148 of the Act and the rulesframed there under.
(vii) (a) Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income tax goods andservices tax (GST) cess and any other material statutory dues applicable to it. Duringthe year 2017-18 sales tax value added tax service tax and duty of excise subsumed inGST and are accordingly reported under GST.
No undisputed amounts payable in respect of provident fund employees' state insuranceincome tax GST cess and any other material statutory dues applicable to it wereoutstanding at the year end for a period of more than six months from the date theybecame payable.
(b) As informed the provisions of customs duty and excise duty is not applicable tothe Company. dues outstanding with respect to income tax sales tax service tax valueadded tax and GST on account of any dispute are as follows:
|Name of the statute ||Nature of dues ||Amount* (Rs. In crores) ||Period to which the amount relates ||Forum where dispute is pending |
|Income Tax Act1961 ||Income Tax demands ||13.44 ||A.Y. 2017-18 ||Assessing Officer |
|Income Tax Act1961 ||Income Tax demands ||26.10 ||A.Y. 2016-17 ||Assessing Officer |
|Income Tax Act1961 ||Income Tax demands ||5.46 ||A.Y. 2014-15 ||Madras High Court |
|Income Tax Act1961 ||Income Tax demands ||5.79 ||A.Y. 2014-15 ||Assessing Officer |
|Income Tax Act1961 ||Income Tax demands ||1.80 ||A.Y. 2014-15 ||CIT (Appeals) |
|Income Tax Act1961 ||Income Tax demands ||1.53 ||A.Y. 2013-14 ||Madras High Court |
|Income Tax Act1961 ||Income Tax demands ||5.02 ||A.Y. 2013-14 ||Assessing Officer |
|zIncome Tax Act1961 ||Income Tax demands ||0.47 ||A.Y. 2012-13 ||Madras High Court |
|Income Tax Act1961 ||Income Tax demands ||5.27 ||A.Y. 2012-13 ||Assessing Officer |
|Income Tax Act1961 ||Income Tax demands ||10.00 ||A.Y. 2011-12 ||Assessing Officer |
|Income Tax Act1961 ||Income Tax demands ||9.21 ||A.Y. 2010-11 ||Assessing Officer |
|Income Tax Act1961 ||Income Tax demands ||10.26 ||A.Y. 2009-10 ||Madras High Court |
|Income Tax Act1961 ||Income Tax demands ||1.84 ||A.Y. 2008-09 ||Madras High Court |
|Income Tax Act1961 ||Income Tax demands ||0.27 ||A.Y. 2007-08 ||Madras High Court |
|Income Tax Act1961 ||Income Tax demands ||0.08 ||A.Y. 2006-07 ||Assessing Officer |
|Finance Act 1994 (Service tax) ||Service tax on hire purchase and lease transaction ||204.89 ||1st April 2003 to 28th February 2006 ||Commissioner of CGST & Central Excise |
|Finance Act 1994 (Service tax) ||Service tax on hire purchase and lease transaction ||5.72 ||1st March 2006 to 31st March 2010 ||Supreme Court |
|Finance Act 1994 (Service tax) ||Service tax demand on securitisation collection commission ||192.88 ||F.Y. 2008-09 to 2014-2015 ||CESTAT (Custom Excise and Service tax appellate tribunal) |
|Finance Act 1994 (Service tax) ||Service tax on interest on hypothecation loans ||1392.72 ||F.Y. 2005-06 to 2015-16 ||Mumbai High Court |
|Finance Act 1994 (Service tax) ||Service tax on interest on hypothecation loans ||375.94 ||F.Y. 2016-17 and April 01 2017 to June 30 2017 ||Company is in the process of _ling an appeal with Mumbai High Court. |
|Maharashtra Value Added Tax ||Value added tax ||0.00# ||F.Y. 2005-06 ||Maharashtra Sales Tax Tribunal |
|Maharashtra Value Added Tax ||Value added tax ||0.00# ||F.Y. 2006-07 ||Deputy Commissioner of Sales Tax - Appeals Mumbai |
|Maharashtra Value Added Tax ||Value added tax ||5.40 ||F.Y. 2007-08 to 2013-14 ||Maharashtra Sales Tax Tribunal |
|Maharashtra Value Added Tax ||Value added tax ||0.79 ||F.Y. 2014-15 ||Joint Commissioner of Sales tax |
|Maharashtra Value Added Tax ||Value added tax ||0.21 ||F.Y. 2012-13 to 2013-14 ||Deputy Commissioner of Sales Tax - Appeals - Mumbai |
|Maharashtra Value Added Tax ||Value added tax ||0.01 ||F.Y. 2014-15 ||Joint Commissioner of Sales tax |
|Maharashtra Value Added Tax ||Value added tax ||0.02 ||F.Y. 2015-16 ||Joint Commissioner of Sales tax |
|Maharashtra Value Added Tax ||Value added tax ||0.29 ||F.Y. 2016-17 ||Joint Commissioner of Sales tax |
|Andhra Pradesh Value Added Tax ||Value added tax ||3.48 ||F.Y. 2005-06 to 2008-09 ||High court of Telangana |
|Andhra Pradesh Value Added Tax ||Value added tax ||3.27 ||F.Y 2009-10 to 2010-11 and 1st April 2011 to 31st August 2012 ||High court of Telangana |
|Andhra Pradesh Value Added Tax ||Value added tax ||0.12 ||F.Y. 2010-11 to 2012-13 ||High court of Telangana |
|Rajasthan Value Added Tax ||Value added tax ||1.16 ||F.Y. 2006-07 to 2011-12 ||High Court of Rajasthan |
|Rajasthan Value Added Tax ||Value added tax ||1.59 ||F.Y. 2012-13 to 2015-16 And 1st April 2016 to 4th Nov 2016 ||Rajasthan Tax Tribunal Ajmer |
|Karnataka Value Added Tax ||Value added tax ||8.07 ||F.Y. 2010-11 to 2016-17 ||High court of Karnataka |
|Orissa Value Added Tax ||Value added tax ||0.09 ||F.Y. 2008-09 to 2012-13 ||Orissa Tax Tribunal |
|Telangana Value Added Tax ||Value added tax ||9.81 ||F.Y. 2013-14 to 2016-17 and April 17 to June 17 ||High Court of Telangana |
*Above amounts are net of amount paid under protest wherever paid. # Amounts less thanRs. 1.00 lac are presented as Rs. 0.00 crores
(viii) During the year the Company has not defaulted in repayment of loans orborrowings to financial institutions banks or dues to debenture holders. Company has nottaken any loan or borrowing from government.
(ix) Company has prima facie utilized the moneys raised by way of further public offer(Rights issue) for the purpose for which they were raised. In our opinion monies raisedby the Company by way of debt instruments and term loans were applied for the purposes forwhich those were obtained though idle/surplus funds which were not required for immediateutilisation were gainfully invested in liquid assets payable on demand.
(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 fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by themanagement.
(xi) Managerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion the Company is not a Nidhi Company. erefore clause 3(xii) of theOrder is not applicable to the Company. (xiii) All transactions entered into by theCompany with the related parties are in compliance with sections 177 and 188 of Act whereapplicable and the details have been disclosed in the standalone Ind AS financialstatements as required by the applicable accounting standards.
(xiv) Company has not made any preferential allotment or private placement of shares orfully or partly convertible debentures during the year. erefore clause 3(xiv) of theOrder is not applicable to the Company.
(xv) Company has not entered into any non-cash transactions with directors or personsconnected with them during the year and hence provisions of section 192 of the Act are notapplicable.
(xvi) Company is required to be registered under section 45-IA of the Reserve Bank ofIndia Act 1934 and the registration has been obtained by the Company.
[Referred to in paragraph 2(f) under Report on Other Legal and RegulatoryRequirements' section in our Independent Auditor's Report of even date to the members ofShriram Transport Finance Company Limited on the standalone financial statements for theyear ended March 31 2021]
Report on the Internal Financial Controls with reference to Financial Statements underclause (i) of sub-section 3 of section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls with reference to financial statementsof Shriram Transport Finance Company Limited ("the Company") as of March 312021 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
Company's management is responsible for establishing and maintaining internal financialcontrols based on the internal control with reference to financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") 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 toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness.
Our audit of internal financial controls with reference to financial statementsincluded obtaining an understanding of internal financial controls with reference tofinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal controls based on theassessed risk. procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols with reference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A company's internal financial control 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 control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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 to FinancialStatements
Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at March 31 2021 basedon the internal control with reference to financial statements criteria established by theCompany considering the essential components of internal controls stated in the GuidanceNote issued by the ICAI.
|For Haribhakti & Co. LLP |
|Chartered Accountants |
|ICAI Firm Registration No : 103523W/W100048 |
|Sumant Sakhardande |
|Membership Number: 034828 |
|UDIN: 21034828AAAACL9851 |
|Place: Mumbai |
|Date: April 29 2021 |
|For Pijush Gupta & Co. |
|Chartered Accountants |
|ICAI Firm Registration No: 309015E |
|Pijush Kumar Gupta |
|Membership Number: 015139 |
|UDIN: 21015139AAAAAT4693 |
|Place: Gurugram |
|Date: April 29 2021 |