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Shriram Transport Finance Company Ltd.

BSE: 511218 Sector: Financials
NSE: SRTRANSFIN ISIN Code: INE721A01013
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NSE 00:00 | 09 Apr 1469.60 -24.60
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OPEN 1485.40
PREVIOUS CLOSE 1494.40
VOLUME 74648
52-Week high 1534.90
52-Week low 489.07
P/E 19.05
Mkt Cap.(Rs cr) 37,253
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1485.40
CLOSE 1494.40
VOLUME 74648
52-Week high 1534.90
52-Week low 489.07
P/E 19.05
Mkt Cap.(Rs cr) 37,253
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shriram Transport Finance Company Ltd. (SRTRANSFIN) - Auditors Report

Company auditors report

To the Members of

Shriram Transport Finance Company Limited

REPORTO N THE AUDITOF T HE STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying standalone financial statements of Shriram TransportFinance Company Limited (“the Company”) which comprise the Balance Sheet as atMarch 31 2020 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year thenended and 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 2020 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.

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. esematters were addressed in the context of our audit of the standalone financial statementsas a whole and in forming our opinion thereon and we do not provide a separate opinionon these matters. We have determined the matters described below to be the key auditmatters 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 thebalance sheet is significant and there is a high degree of complexity and judgmentinvolved in estimating individual and collective credit impairment provisions write-o_sagainst these loans and to additionally determine the potential impact of unprecedentedCOVID 19 pandemic on asset quality and provision of the Company. The Company's model tocalculate expected credit loss (“ECL”) is inherently complex and judgment isapplied in determining the correct construction of the three-stage impairment model(“ECL Model”) including the selection and input of forward looking information.ECL provision calculation require the use of large volumes of data. The completeness andreliability of data can significantly impact accuracy of the modeled impairmentprovisions. The accuracy of data flows and the implementation of related controls arecritical for the integrity of the estimated impairment 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 “FinancialInstruments”. Particularly we assessed the approach of the Company regardingdefinition of Default Probability of Default Loss Given Default and incorporation offorward-looking information for the calculation of ECL. For loans and advances which areassessed for impairment on a portfolio basis we performed particularly the followingprocedures:

• We tested the reliability of key data inputs and related management controls;

• We checked the stage classification as at the balance sheet date as per thedefinition of Default of the Company;

• We validated the ECL Model and its calculation by involving our InformationTechnology Expert;

• We have also calculated the ECL provision manually for selected samples; and

• We have assessed the assumptions made by the Company in making acceleratedprovision considering forward looking information and based on an event in a particulargeographical range.

• We have reviewed the process of the Company to grant moratorium to the borrowersas per the Regulatory Package announced by the Reserve Bank of India (RBI). Further wehave relied on the assumption of the management that there will be no significant increasein the credit risk in the cases where moratorium is given and that the staging based onthe days past due (DPD) will be considered as per the RBI COVID-19 Regulatory Package. Wehave tested on samples basis the DPD freeze for cases where moratorium is provided and notprovided in accordance with RBI COVID-19 Regulatory Package;

• With respect to additional provision made by the Company on account of theimpact of COVID-19 pandemic we broadly reviewed the underlying assumptions and estimatesused by the management for the same but as the extent of impact is dependent on futuredevelopments which are highly uncertain we have primarily relied on those assumptions andestimates. ese assumptions and estimates are a subject matter of periodic review by theCompany and.

• We have checked the provision on Loan Assets as per IRACP norms as requiredunder RBI circular dated March 13 2020. We have checked the DPD and provision inaccordance with the RBI regulations in that regard further considering the RegulatoryPackages issued by RBI dated March 27 2020 and May 23 2020 and RBI circular dated April17 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.

Emphasis of Matter

We draw attention to Note 62 to the standalone financial statements which describes theclassification of accounts as on March 31 2020 with respect to the accounts which wereoverdue but standard as on February 29 2020 and to whom moratorium benefit has beengranted. The staging of those accounts under Ind AS as on March 31 2020 is based on thedays past due status as on February 29 2020 in accordancewiththeReserveBankofIndiaCOVID-19regulatorypackage.

Further the extent to which the COVID-19 pandemic will impact the Company's financialperformance is dependent on future developments which are highly uncertain. Our opinionis not modified in respect of this matter.

Other Information

The Company's Board of Directors is responsible for the other information. The 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 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 the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

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

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance(includingother comprehensive income) changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including Ind AS prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended. is responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and 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 management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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 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 Companyhas adequate internal financial controls with reference to financial statements in placeand the 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 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 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 to the bestof our knowledge and belief were necessary for the 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 Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis report are in agreement with the books of account;

d. In our opinion the aforesaid standalone financial statements comply with the Ind ASprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended;

e. On the basis of the written representations received from the directors as on March31 2020 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2020 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 tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate report in “Annexure 2”;

g. With respect to the other matter to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid/ provided by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act;

h. With respect to the other matters to be included in the Auditor's 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 on its financialposition in its standalone financial statements – Refer Note 49 on ContingentLiabilities to the standalone financial statements;

(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 10 to the standalone financial statements;

(iii) ere has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

For Haribhakti & Co. LLP For Pijush Gupta & Co.
Chartered Accountants Chartered Accountants
ICAI Firm Registration No. 103523W/W100048 ICAI Firm Registration No. 309015E
Sumant Sakhardande Sangeeta Gupta
Partner Partner
Membership No. 034828 Membership No. 064225
UDIN: 20034828AAAACL9811 UDIN: 20064225AAAAAX2386
Place: Mumbai Place: Gurugram
Date: June 10 2020 Date: June 10 2020

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 ofShriram Transport Finance Company Limited on the standalone financial statements for theyear ended March 31 2020

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit we report that:

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

(b) During the year the fixed assets of the Company have been physically verified bythe management and no material discrepancies were noticed on such verification. In ouropinion the frequency of verification is reasonable having regard to the size of theCompany and the nature of its assets.

(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 held inthe name of the Company as at the balance sheet date.

(ii) The Company is in the business of providing services and does not have anyinventory. Accordingly clause 3(ii) of the Order is not applicable.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Act. Accordingly clause 3(iii) of the Order is not applicable to theCompany.

(iv) The Company has complied with the provisions of sections 185 and 186(1) of the Actin respect of grant of loans making investments and providing guarantees and securitiesas applicable. Further the provisions of section 186 except for section 186(1) of theAct are 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) The Central Government has not prescribed the maintenance of cost records for anyof the products of the Company under sub-section (1) of section 148 of the Act and therules framed there under.

(vii) (a) The 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. Asinformed provisions of Custom Duty are not applicable to the Company. During the year2017-18 sales tax value added tax service tax and duty of excise subsumed in GST andare accordingly reported under GST.

(b) No undisputed amounts payable in respect of provident fund employees' stateinsurance income tax GST customs duty cess and any other material statutory duesapplicable to it were outstanding at the year end for a period of more than six monthsfrom the date they became payable.

(c) As informed the provisions of customs duty and excise duty is not applicable tothe Company. The dues outstanding with respect to income tax sales tax service taxvalue added tax and GST on account of any dispute are as follows:

Name of the statute Nature of dues Amount Period to which the amount relates Forum where dispute is pending
(Rs. In crores)
Income Tax Act1961 Income Tax demands 13.44 A.Y. 2017-18 CIT (Appeals)
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
Income 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 212.30 F.Y. 2003-04 to 2009-10 CESTAT (Custom Excise and Service tax appellate tribunal)
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)
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 Commercial Tax officer Secunderabad

*Above amounts are net of amount paid under protest wherever paid.

# Amounts less than Rs. 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. The Company hasnot taken any loan or borrowing from government.

(ix) The Company did not raise moneys by way of initial public offer or further publicoffer of equity shares during the year. In our opinion monies raised by the Company byway of debt instruments and term loans were applied for the purposes for which those wereobtained though idle/surplus funds which were not required for immediate utilisation weregainfully 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 we haveneither come across any instance of fraud by the Company or any fraud on the Company byits officers or employees noticed or reported during the year nor have we been informedof any such instance by the management except three fraud cases amounting to Rs. 0.18Crores where employees of the Company has conducted Cheating and Forgery.

(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 the Company with the related parties are incompliance with sections 177 and 188 of Act where applicable and the details have beendisclosed in the standalone Ind AS financial statements as required by the applicableaccounting standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. erefore clause 3(xiv)of the Order is not applicable to the Company.

(xv) The Company has not entered into any non-cash transactions with directors orpersons connected with them during the year and hence provisions of section 192 of the Actare not applicable.

(xvi) The Company is required to be registered under section 45-IA of the Reserve Bankof India Act 1934 and the registration has been obtained by the Company.

For Haribhakti & Co. LLP For Pijush Gupta & Co.
Chartered Accountants Chartered Accountants
ICAI Firm Registration No. 103523W/W100048 ICAI Firm Registration No. 309015E
Sumant Sakhardande Sangeeta Gupta
Partner Partner
Membership No. 034828 Membership No. 064225
UDIN: 20034828AAAACL9811 UDIN: 20064225AAAAAX2386
Place: Mumbai Place: Gurugram
Date: June 10 2020 Date: June 10 2020

ANNEXURE 2

TOTHE INDEPENDENT AUDITOR 'SREPORT

[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 2020]

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 312020 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

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the “Guidance Note”) issued by the Institute of Chartered Accountantsof India (“ICAI”). ese 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.

Auditors' Responsibility

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. ose 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. The 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.

Opinion

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 2020 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 For Pijush Gupta & Co.
Chartered Accountants Chartered Accountants
ICAI Firm Registration No. 103523W/W100048 ICAI Firm Registration No. 309015E
Sumant Sakhardande Sangeeta Gupta
Partner Partner
Membership No. 034828 Membership No. 064225
UDIN: 20034828AAAACL9811 UDIN: 20064225AAAAAX2386
Place: Mumbai Place: Gurugram
Date: June 10 2020 Date: June 10 2020

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