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Spandana Sphoorty Financial Ltd.

BSE: 542759 Sector: Financials
NSE: SPANDANA ISIN Code: INE572J01011
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OPEN 595.80
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VOLUME 2972
52-Week high 830.00
52-Week low 403.50
P/E 23.34
Mkt Cap.(Rs cr) 3,847
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 595.80
CLOSE 607.95
VOLUME 2972
52-Week high 830.00
52-Week low 403.50
P/E 23.34
Mkt Cap.(Rs cr) 3,847
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Spandana Sphoorty Financial Ltd. (SPANDANA) - Auditors Report

Company auditors report

To the Members of Spandana Sphoorty Financial Limited

 

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion:

We have audited the accompanying Standalone Ind AS financial statements of SpandanaSphoorty Financial Limited ("the Company") which comprise the Balance sheet asat March 312019 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2019 its profitincluding other comprehensive income its cash flows and the changes in equity for the yearended on that date.

 

Basis for Opinion:

We conducted our audit of the Standalone Ind AS financial statements in accordance withthe Standards on Auditing (SA)as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India ("ICAI") together withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Standalone Ind AS financial statements.

 

Emphasis of Matter:

We draw attention to Note 33 (b) of the Standalone Ind AS financial statements whichdescribes an uncertainty arising from an observation made by the Reserve Bank of India(RBI) with regards to adherence to the pricing guidelines issued under RBI MasterDirections DNBR. PD. 008/03.10.119/2016-17 dated September 1 2016 as amended("Master Directions") and management's response thereto supported by externallegal advice confirming compliance with the Master Directions. Pending outcome of themanagement's response to the RBI no provision has been made in these Standalone Ind ASfinancial statements.

Our opinion is not modified in respect of this matter.

 

Key Audit Matters:

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind AS financial statements for the year endedMarch 31 2019. These matters were addressed in the context of our audit of theStand-alone Ind AS financial statements as a whole and in forming our opinion thereonand we do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements'section of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the Standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying Standalone Ind AS financialstatements.

Key audit matters How our audit addressed the key audit matter
(a) Transition to Ind AS accounting framework
(as described in note 37 of the Standalone Ind AS financial statements)
In accordance wit h the roadmap for impelmentation of India n Accounting Standards (Ind AS) for non- banking financial companies as announced by the Ministry of Corporate Affair s the Company has adopted Ind AS from April 1 2018 with an effective date of April 1 2017 for such transition For periods up to and including the year ended March 31 2018 the Comp any had prepared and presented it s financial statements in accordance wit h in accordance with accounting standards notified under the section 133 of the Companies Act 2013 read wit h Rule 7 of the Companies (Accounts) Rules 2014 ("India n GAAP" or "previous GAAP"). In order to give effect of the transition to Ind AS these financial statements for the year ended March 31 2019 together wit h the comparative financial information for the previous year ended March 31 2018 and the transition date balance sheet as at April 1 2017 have been prepared under Ind AS. Our audit procedures included considering the processes laid down by the management to implement such transition combined with procedures performed as follows:
The transition has involved significant changes in the Company's financial reporting policies and processes including generation of reliable and supportable financial information. It has also required management to exercise significant judgement for giving an appropriate effect of principles of First-time Adoption of Indian Accounting Standards (Ind AS 101) as at transition date and for determining impact of Ind AS on certain accounting and disclosure requirements prescribed under previous GAAP such as: • Considered the Ind AS impact assessment performed by management to identify area s to be impacted on account of Ind AS transition and read the changes made to the accounting policies inlight of the requirements of the new framework.
• Recognition of deferred tax asset on deductible temporary differences existing at transition date (not recognized in accordance with erstwhile Indian GAAP) • Understood the financial statement closure process (including disclosures in notes to accounts) and the controls established by the Company for transition to Ind AS.
• Treatment of specific disclosure requirements prescribed under extant Reserve Bank of India (RBI) directions in view of the differences between certain provision of Financial Instruments (Ind AS 109) and RBI directions • Tested the des i g n and operating effectiveness of key controls for processes implemented by the Company for preparing and presenting Ind AS financial statements.
In view of the material impact and complexities and significant judgement involved in implementing Ind AS we have focused on this area in our audit. • Performed test of details in respect of the Ind AS adjustments made by the Company in the equity reconciliation and the reconciliation of the statement of profit and loss reported under erstwhile Indian GAAP to Ind AS.
• Evaluated management's assessment performed as at transition date of the availability of future taxable profits (included in the plan approved by the Board of Directors) against which deductible temporary differences and unabsorbed tax losses can be utilized. Tested computation of deferred tax asset recognized as at transition date.
• Understood the judgements applied by the Company in respect of areas where the accounting treatment adopted or the disclosures made under the new accounting framework were different from the extant RBI directions.
• Read the disclosures with respect to the transition in accordance with the requirements of Ind AS 101 in respect of the previous period.
(b) Impairment of financial instruments (including provision for expected credit losses)
(as described in note 41. 1 of the Standalone Ind AS financial statements)
The Company's impairment provision for financial assets (designated at amortised cost and fair value through other comprehensive income) is based on the expected credit loss approach laid down under ‘Ind AS 109 Financial instruments'. Ind AS 109 requires the Company to exercise significant judgement while applying principles and other requirements of the standard in addition to the identification and adequacy of provision for impairment of its financial instruments using the expected credit loss (ECL) approach which involves an estimation of probability-weighted loss on the financial instruments over their life considering reasonable and supportable information about past events current conditions and forecasts of future economic conditions which could impact the credit quality of its loans and advances. In the process a significant degree of judgement has been applied by the management in respect of following matters: • Our audit procedures included considering the Company's accounting policies for impairment of financial instruments and assessing compliance with the policies in terms of Ind AS 109.
a. Defining thresholds for ‘significant increase in credit risk' and ‘default'. • Evaluated the management's approach of ECL estimation including the assumptions used for grouping and staging of loan portfolio for determination of probability of default (PD) and loss given default (LGD).
b. Grouping of loans under homogenous pools to determine probability of default on a collective basis and calculation of past default rates. • Tested the operating effectiveness of the controls for staging of loans based on their past-due status. Tested a sample of performing (stage 1) loans to assess whether any loss indicators were present requiring them to be classified under stage 2 or 3.
c. Determining effect of less frequent past events on future probability of default. • Compared input data used for determining PD and LGD rates with the underlying books of accounts and records and tested the arithmetical accuracy of the computation.
d. Estimation of management overlay for macro-economic factors which could impact the credit quality of the loans. • Compared the disclosures included in the Ind AS financial statements in respect of expected credit losses with the requirements of Ind AS 107 and 109.
Given the complexity and high degree of judgement involved in the estimation of expected credit losses we have considered this area as a key audit matter.
(c) IT systems and controls
The financial accounting and reporting systems of the Company are fundamentally reliant on IT systems and IT controls to process significant transaction volumes. Automated accounting procedures and IT environment controls which include IT governance general IT controls over program development and changes access to programs and data and IT operations are required to be designed and to operate effectively to ensure accurate financial reporting. We performed the following procedures for testing IT general controls and for assessing the reliability of electronic data processing assisted by specialized IT auditors:
Any gaps in the IT control environment could result in a material misstatement of the financial accounting and reporting records. • Tested the design and operating effectiveness of IT access controls over the information systems that are critical to financial reporting.
Therefore due to the pervasive nature and complexity of the IT environment the assessment of the general IT controls and the application controls specific to the accounting and preparation of the financial information is considered to be a key audit matter. • Tested IT general controls (logical access changes management and aspects of IT operational controls). This included testing that requests for access to systems were appropriately reviewed and authorized.
• Tested the Company's periodic review of access rights. We inspected requests of changes to systems for appropriate approval and authorization.
• In addition to the above we tested the design and operating effectiveness of certain automated and IT dependent manual controls that were considered as key internal controls over financial reporting.
Where deficiencies were identified we tested compensating controls or performed alternate

 

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 Analysisand Board's Report including Annexures to Board's Report but does not include thestandalone Ind AS financial statements and our auditor's report thereon. The otherinformation is expected to be made available to us after the date of this auditor'sreport.

Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether such other information is materially inconsistent withthe standalone Ind AS financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.

When we read such other information if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and to comply with the relevant applicable requirements of the standard onauditing for auditor's responsibility in relation to other information in documentscontaining audited financial statements.

 

Responsibilities of Management and Those Charged with Governance for the Standalone IndAS Financial 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 Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Standalone Ind AS 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.

Those Charged with Governance are also responsible for overseeing the Company'sfinancial reporting process.

 

Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfinancial 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 SA will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Standalone Ind AS financial statements.

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

1. Identify and assess the risks of material misstatement of the Standalone Ind ASfinancial 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.

2. 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 theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

4. 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

5. Evaluate the overall presentation structure and content of the Standalone Ind ASfinancial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance of the Holding Company and such otherentities included in the consolidated Ind AS financial statements of which we are theindependent auditors regarding among other matters the planned scope and timing of theaudit and significant audit findings including any significant deficiencies in internalcontrol that we identify during our audit.

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Ind AS financialstatements for the financial year ended March 31 2019 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

 

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure 1"a statement on the mattersspecified in paragraphs 3 and 4 of the Order.

 

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

(a)We have sought and obtained all the information and 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 the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d)In our opinion the aforesaid Standalone Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct;

With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in "Annexure2" to this report;

(g)In our opinion the managerial remuneration for the year ended March 31 2019 hasbeen paid/provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS financial statements – Refer Note 48 to theStandalone Ind AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Com pany.

For S. R. BATLIBOI & CO. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Shrawan Jalan

Partner

Membership No. 102102

Mumbai

May 24 2019

 

Annexure 1 referred to in paragraph 1 under the heading "Report on other legal andregulatory requirements" of our report of even date

Re: Spandana Sphoorty Financial Limited

 

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

(b)All fixed assets have not been physically verified by the management during the yearbut there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company.

 

(ii) The Company's business does not involve inventories and accordingly therequirements under clause 3(ii) of the Order are not applicable to the Company and hencenot commented upon.

 

(iii) (a)The Company has granted loans to two companies covered in the registermaintained under section 189 of the Act. In our opinion and according to the informationand explanations given to us the terms and conditions of the grant of such loans are notprejudicial to the Company's interest.

(b)The Company has granted loans that are re-payable on demand to companies covered inthe register maintained under section 189 of the Act. We are informed that the Company hasnot demanded repayment of any such loan during the year and thus there has been nodefault on the part of the parties to whom the money has been lent. The payment ofinterest has been regular.

(c) There are no amounts of loans granted to companies firms or other parties listedin the register maintained under section 189 of the Act which are overdue for more thanninety days.

 

(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities given in respect of whichprovisions of section 185 and 186 of the Act are applicable and hence not commented upon.

 

(v) The Company has not accepted any deposits within the meaning of Sections 73 to76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.

 

(vi) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under section 148(1) of the Act for theservices of the Company.

 

(vii) (a)Undisputed statutory dues including provident fund employees' stateinsurance income tax sales tax service tax duty of custom duty of excise value addedtax goods and service tax cess and other statutory dues have not generally beenregularly deposited with the appropriate authorities though the delays in deposit have notbeen serious.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax goods and services tax cessand other statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable.

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

Name of the Statute Nature of dues Amount under dispute (Rs.)* Amount paid (Rs.)** Period to which its relates Forum where dispute is pending
Act 1994 Service Tax 56852171 9926956 Financial year from 2006-07 to 2014-15 Customs Excise & Service Tax Appellate Tribunal

* Excluding interest and penalty as applicable ** Paid under protest

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowings to afinancial institution or bank or dues to debenture holders.

(ix) According to the information and explanations given by the management the Companyhas not raised any money by way of initial public offer or further public offer.

Further monies raised by the Company by way of term loans were applied for the purposefor which those were raised though idle/surplus funds which were not required forimmediate utilization were gainfully invested in liquid assets payable on demand.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or no material fraud onthe Company by the officers and employees of the Company has been noticed or reportedduring the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid and 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. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 of theAct where applicable and the details have been disclosed in the notes to the financialstatements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has complied with provisions of section 42of the Act in respect of the private placement of equity shares during the year. Accordingto the information and explanations given by the management we report that the amountsraised have been used for the purposes for which the funds were raised.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withthe directors as referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us we report that theCompany has registered as required under section 45-IA of the Reserve Bank of India Act1934.

For S. R. BATLIBOI & CO. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Shrawan Jalan

Partner

Membership No. 102102

Mumbai

May 24 2019

 

Annexure 2 referred to in paragraph 2 (f) under the heading "Report on other legaland regulatory requirements" of our report of even date

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SpandanaSphoorty Financial Limited ("the Company") as of March 31 2019 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended 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 over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

 

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting.

 

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

 

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S. R. BATLIBOI & CO. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Shrawan Jalan

Partner

Membership No. 102102

Mumbai

May 24 2019

.