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Sundram Fasteners Ltd.

BSE: 500403 Sector: Engineering
NSE: SUNDRMFAST ISIN Code: INE387A01021
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NSE 13:59 | 14 Jun 832.60 2.90
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OPEN 839.90
PREVIOUS CLOSE 829.70
VOLUME 6245
52-Week high 867.05
52-Week low 300.00
P/E 53.07
Mkt Cap.(Rs cr) 17,416
Buy Price 828.20
Buy Qty 1.00
Sell Price 829.95
Sell Qty 13.00
OPEN 839.90
CLOSE 829.70
VOLUME 6245
52-Week high 867.05
52-Week low 300.00
P/E 53.07
Mkt Cap.(Rs cr) 17,416
Buy Price 828.20
Buy Qty 1.00
Sell Price 829.95
Sell Qty 13.00

Sundram Fasteners Ltd. (SUNDRMFAST) - Auditors Report

Company auditors report

To the Members of Sundram Fasteners Limited

Report on the Audit of the Standalone Ind AS fi nancial statements Opinion

We have audited the Standalone Ind AS fi nancial statements of Sundram FastenersLimited ("the Company") which comprise the standalone balance sheet as at March31 2020 and the standalone statement of profi t and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash fl owsfor the year then ended and notes to the Standalone Ind AS fi nancial statementsincluding a summary of the signifi cant accounting policies and other explanatoryinformation (hereinafter referred to as "the Standalone Ind AS fi nancialstatements"). In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Ind AS fi nancial statements give theinformation required by the Companies Act 2013 ("Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020and profi t and other comprehensive income changes in equity and its cash fl ows for theyear ended on that date

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifi edunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone Ind AS financial statements section of our report. We are independent of the Company in accordancewith the Code of Ethics issued by the Institute of Chartered Accountants of India togetherwith the ethical requirements that are relevant to our audit of the Standalone Ind AS financial statements under the provisions of the Act and the Rules thereunder and we havefulfi lled our other ethical responsibilities in accordance with these requirements andthe Code of Ethics. We believe that the audit evidence we have obtained is suffi cient andappropriate to provide a basis for our opinion on the Standalone Ind AS fi nancialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignifi cance in our audit of the Standalone Ind AS fi nancial statements of the currentperiod. These matters were addressed in the context of our audit of the Standalone Ind ASfi nancial statements as a whole and in forming our opinion thereon and we do notprovide a separate opinion on these matters.

Description of Key Audit Matter

Impairment assessment of long-term investments in subsidiaries

The key audit matter How the matter was addressed in our audit
The Company has long-term investments in subsidiaries as at March 31 2020. The Company assesses investment in subsidiaries at each reporting date for any impairment indicators based on internal or external sources of information. Where such indicators exist the Company performs impairment testing. In view of the signifi cance of the matter we performed the following
key audit procedures:
The changes in business environment including impact of COVID-19 pandemic on budgets and forecasts and uncertainties caused by external factors affecting estimated performance of subsidiaries has triggered impairment testing in respect of certain subsidiaries. • Assessed the design implementation and operating effectiveness of key controls in respect of the Company's impairment analysis process including evaluation and approval of forecasts and the valuation model used;
• Examined the valuation reports of the independent third-party specialists as engaged by the Company;
• Evaluated and challenged the key assumptions considered in cash fl ow forecasts for assessing the recoverable amount such as growth rates profi tability discount rates etc. with reference to our understanding of the business and historical trends;
As impairment assessment involves signifi cant estimates and judgements it is a key area of focus in our audit. • Involved our valuation specialists to examine the valuation methodology and key assumptions;
Refer Notes 3 and 6 to the standalone fi nancial statements. • Performed sensitivity analysis considering possible changes in key assumptions used;
• Evaluated the adequacy of disclosures made in the standalone fi nancial statements.
Taxation and contingent liability related matters
The key audit matter How the matter was addressed in our audit
Determination of tax provisions and assessment of contingent liabilities involves judgment with respect to various tax positions on deductibility of transactions tax incentives/ exemptions interpretation of laws and regulations etc. Judgment is also required in assessing the range of possible outcomes for these matters. In view of the signifi cance of the matter we applied the following key audit procedures:
• Involved our tax specialists and evaluated and challenged the underlying judgements used in respect of estimation of provisions exposures and contingencies including Company's assessment of impact of Taxation Laws (Amendment)
The Company makes an assessment to determine the outcome of these matters and records an accrual or discloses this as a contingent liability in accordance with applicable accounting standards. Ordinance 2019 on current and deferred taxes.
Further the change in tax rates pursuant to the Taxation Laws • Considered third party advice received by the Company where applicable status of recent and current tax assessments outcome of previous claims judgmental positions taken in tax returns and developments in tax environment.
(Amendment) Ordinance 2019 has had signifi cant current and deferred tax implications during the current year. • Evaluated the adequacy of disclosures on tax provisions and contingent liabilities made in the standalone fi nancial statements.
Accordingly taxation and contingent liability related matters are areas of focus in the audit. Refer Notes 3 and 35 to the standalone fi nancial statements.
Revenue recognition and trade receivables
The key audit matter How the matter was addressed in our audit
The Company's revenue is derived primarily from sale of automobile spare parts and components ("goods"). Revenue from the sale of goods is recognised upon the transfer of control of the goods to the customer. In view of the signifi cance of the matter we applied the following key audit procedures in this area:
• Assessed the Company's accounting policy for revenue recognition as per applicable accounting standards.
The Company and its external stakeholders focus on revenue as a key performance metric and the Company uses various shipment terms across its operating markets. • Tested the design implementation and operating effectiveness of key controls relating to revenue recognition.
Revenue recognition has been identifi ed as a key audit matter as there could be an incentive or external pressures to meet expectations resulting in revenue being overstated or recognized before control has been transferred. • Performed substantive testing of revenue transactions recorded during the year on a sample basis by verifying the underlying documents.
Further the Company has signifi cant trade receivables as at the year end. Considering the size of the balances and the risk of some of the trade receivables not being recoverable due to the current COVID-19 situation judgement is required to evaluate the adequacy of allowance recorded to refl ect the credit risk. • Tested samples of revenue transactions recorded closer to the year-end by verifying underlying documents to assess the accuracy of the period in which revenue was recognized.
• Tested manual journal entries posted to revenue.
Refer 3 and 23 to the standalone fi nancial statements. • Circularised balance confi rmations for the trade receivable balances on a sample basis and verified reconciliations / performed alternate procedures as applicable.
• Evaluated the Company's assessment of the recoverability of receivable balances and the judgements considered in the expected credit loss allowance including for possible effects from the COVID-19 pandemic.

Information Other than the Standalone Ind AS fi nancial statements and Auditors' ReportThereon

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

Our opinion on the Standalone Ind AS fi nancial 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 fi nancial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Ind AS fi nancialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. 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.

Management's and Board of Directors' Responsibility for the Standalone Ind AS financial statements

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the state of affairs profi t/lossand other comprehensive income changes in equity and cash fl ows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specifi ed under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal fi nancial controls that wereoperating effectively for ensuring accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the Standalone Ind AS fi nancialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Standalone Ind AS fi nancial statements the Management and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

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

Auditor's Responsibilities for the Audit of the Standalone Ind AS fi nancial statements

Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfi nancial 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 infl uence the economic decisions of userstaken on the basis of these Standalone Ind AS fi nancial statements. As part of an auditin accordance 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 Ind ASfi nancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is suffi cient and appropriateto provide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal fi nancial controls with reference to fi nancial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the Standalone Ind AS fi nancialstatements made by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast signifi cantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the Standalone Ind AS fi nancial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the Standalone IndAS fi nancial statements including the disclosures and whether the Standalone Ind AS financial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and signifi cant audit fi ndings including anysignifi cant defi ciencies in internal control that we identify during our audit.

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

From the matters communicated with those charged with governance we determine thosematters that were of most signifi cance in the audit of the Standalone Ind AS fi nancialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditors' report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefi ts of suchcommunication.

Other matter

The comparative fi nancial information for the year ended March 31 2019 presented inthe Standalone Ind AS fi nancial statements have been adjusted to include the fi nancialinformation of an erstwhile wholly owned subsidiary Sundram Precision Components Limited(‘SPCL') which merged with the Company pursuant to the order of National Company LawTribunal (NCLT) and made effective on April 11 2019. The merger being a common controlbusiness combination the comparative fi nancial information in the Standalone Ind AS financial statements of the Company have been restated to record the merger from April 12018. Adjustment for the merger for the year ended March 31 2019 is based on the financial statements of SPCL for the year ended March 31 2019 that were audited by theerstwhile auditors of SPCL (vide their unmodifi ed annual audit report dated April 192019) and approved by the board of directors and has not been subjected to audit.According to the information and explanations given to us by the management these financial information are not material to the Company. Our conclusion on the Standalone IndAS fi nancial statements is not modifi ed in respect of the above matter.

Report on Other Legal and Regulatory Requirements

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

2. (A) As required by Section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; c) The standalone balance sheet the standalone statement ofprofi t and loss (including other comprehensive income) the standalone statement ofchanges in equity and the standalone statement of cash fl ows dealt with by this Reportare in agreement with the books of account. d) In our opinion the aforesaid StandaloneInd AS fi nancial statements comply with the Ind AS specifi ed under section 133 of theAct. e) On the basis of the written representations received from the directors as onMarch 31 2020 taken on record by the Board of Directors none of the directors isdisqualifi ed 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 fi nancial controlswith reference to fi nancial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us: i. TheCompany has disclosed the impact of pending litigations as at March 31 2020 on its financial position in its Standalone Ind AS fi nancial statements - Refer Note 35 to theStandalone Ind AS fi nancial statements; ii. The Company did not have any long-termcontracts including derivative contracts for which there were any material foreseeablelosses; iii. There has been no delay in transferring amounts required to be transferredto the Investor Education and Protection Fund by the Company; iv. The disclosures in theStandalone Ind AS fi nancial statements regarding holdings as well as dealings in specified bank notes during the period from November 8 2016 to December 30 2016 have not beenmade in these fi nancial statements since they do not pertain to the fi nancial year endedMarch 31 2020.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

for B S R & Co. LLP
Chartered Accountants
Firm's Registration number: 101248W/W-100022
S Sethuraman
Partner
Membership No.: 203491
ICAI UDIN: 20203491AAABO2908
Place : Chennai
Date : June 11 2020

Annexure A to the Independent Auditor's Report

To the Members of Sundram Fasteners Limited on the Standalone Ind AS fi nancialstatements for the year ended March 31 2020 (Referred to in paragraph 1 under‘Report on Other Legal and Regulatory Requirements' section of our report of evendate)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fi xed assets. (b) The Company has a regularprogramme of physical verifi cation of its fi xed assets by which all fi xed assets areverifi ed in a phased manner. In our opinion this periodicity of physical verifi cationis reasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) The inventory except goods in transit and certain stocks lying with thirdparties has been physically verified by the management during the year. In our opinionthe frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material. For stock lyingwith third parties at the year end written confi rmations have been obtained by themanagement.

(iii) (a) According to the information and explanations given to us during the yearthe Company has not granted any loans secured or unsecured to companies fi rms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Act. Accordingly the provisions of clause (iii) (a) of the Order are notapplicable to the Company.

(b) The Company has granted loans in the earlier years to companies covered in theregister maintained under section 189 of the Act. The schedule of repayment of principaland payment of interest has been stipulated for the loans granted and borrowers have beenregular in payment of principal and interest as applicable.

(c) There are no amounts overdue for more than ninety days in respect of loans grantedto companies listed in the register maintained under section 189 of the Act.

(iv) According to the information and explanations given to us the Company hascomplied with the provisions of sections 185 and 186 of the Act with respect to loansinvestments guarantees and security as applicable.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits. Accordingly paragraph 3(v) of the Order is notapplicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersubsection (1) of Section 148 of the Act in respect of products manufactured and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the records. .

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees stateinsurance income tax goods and services tax duty of customs and other materialstatutory dues have generally been regularly deposited by the Company with the appropriateauthorities. As explained to us the Company did not have any dues on account of cesssales tax service tax duty of excise value added tax.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees state insurance income tax goods andservices tax duty of customs and other material statutory dues were in arrears as atMarch 31 2020 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us the dues set out inAppendix I in respect of income tax sales tax service tax duty of customs duty ofexcise value added tax and Goods and Service tax have not been deposited by the Companyon account of disputes.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to banks or fi nancial institutions.The Company has not taken any loans or borrowings from government and have not issued anydebentures.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. According to information andexplanations given to us money raised through term loans during the year has beenutilised for the purpose for which there were raised.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its offi cers or employees has been noticed or reportedduring the course of our audit.

(xi) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the managerial remuneration for the year endedMarch 31 2020 has been paid or provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Act and rules framedthereunder.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable. The details of suchrelated party transactions have been disclosed in the Standalone Ind AS fi nancialstatements as required under applicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable (xv) According tothe information and explanations given to us and based on our examination of the recordsof the Company the Company has not entered into any non-cash transactions with directorsor persons connected with them. Accordingly paragraph 3(xv) of the Order is notapplicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable.

for B S R & Co. LLP
Chartered Accountants
Firm's Registration number: 101248W/W-100022
S Sethuraman
Partner
Membership No.: 203491
ICAI UDIN: 20203491AAABO2908
Place : Chennai
Date : June 11 2020

Appendix I as referred to under para (vii)(b) of Annexure A to the IndependentAuditor's Report

To the Members of Sundram Fasteners Limited on the Standalone Ind AS fi nancialstatements for the year ended March 31 2020

Name of the Statute Nature of the Dues Amount* ` ( in crores) Period to which the amount relates Forum where the dispute is pending
Central Excise Act 1944 Excise duty 2.26 FY 2004-16 Customs Excise and Service tax Appellate Tribunal
0.01 FY 2005-17 Commissioner - Appeals
0.21 FY 2009-18 Adjudicating authority/ Assessing Offi cer/ Division
Finance Act 1994 Service tax 0.22 FY 2004-18 Customs Excise and Service tax Appellate Tribunal
0.06 FY 2008-16 Commissioner – Appeals
0.34 FY 2008-17 Joint / Deputy / Assistant / Additional Commissioner
Income Tax Act 1961 Income-tax dues 1.31 AY 2012-13 The Income tax Appellate Tribunal
Income Tax Act 1961 Income-tax dues 1.27 AY 2013-14 The Income tax Appellate Tribunal
Income Tax Act 1961 Income-tax dues 15.05 AY 2014-15 The Commissioner of Income-tax (Appeals)
Tamil Nadu Value Added Tax Act Sales tax 0.58 FY 2006-17 Joint/Deputy/Assistant/
2006 Telangana Value Added Tax Additional Commissioner
Act 2005 Central Sales Tax Act 1956 0.34 FY 2014-17 High Court of Madras
Customs Act 1962 Customs duty 0.69 FY 2014-15 Customs Excise and Service tax Appellate Tribunal
0.65 FY 2014-15 High Court of Madras

* net of amount paid under protest

Annexure B to the Independent Auditor's Report

To the Members of Sundram Fasteners Limited on the Standalone Ind AS fi nancialstatements for the year ended March 31 2020 Report on the Internal Financial Controlswith reference to fi nancial statements under clause (i) of sub-section 3 of section 143of the Companies Act 2013 ("the Act") (Referred to in paragraph B (f) under‘Report on Other Legal and Regulatory Requirements' section of our report of evendate)

Opinion

We have audited the internal fi nancial controls with reference to fi nancialstatements of Sundram Fasteners Limited ("the Company") as of March 312020 in conjunction with our audit of the Standalone Ind AS fi nancial statements of theCompany for the year ended on that date.

In our opinion the Company has in all material respects an adequate internal financial controls with reference to fi nancial statements and such internal fi nancialcontrols were operating effectively as at March 31 2020 based on the internal fi nancialcontrols with reference to fi nancial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting (the "GuidanceNote") issued by the Institute of Chartered Accountants of India (‘ICAI').

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal fi nancial controls based on the internal fi nancial controlswith reference to fi nancial statements established by the Company considering theessential components of internal control stated in the Guidance Note issued by ICAI. Theseresponsibilities include the design implementation and maintenance of adequate internalfi nancial controls that were operating effectively as at March 31 2020 for ensuring theorderly and effi cient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable fi nancial information as required under the Act.

Auditor's 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 issued by ICAI anddeemed to be prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal fi nancial controls with reference to fi nancial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to fi nancial statements was established and maintainedand if such controls operated effectively in all material respects. Our audit involvesperforming procedures to obtain audit evidence about the adequacy of the internalfinancial controls system with reference to fi nancial statements and their operatingeffectiveness. Our audit of internal fi nancial controls with reference to fi nancialstatements included obtaining an understanding of internal fi nancial controls withreference to fi nancial statements assessing the risk that a material weakness existsand testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk. The procedures selected depend on the auditor's judgmentincluding the assessment of the risks of material misstatement of these standalone financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is suffi cient and appropriate toprovide a basis for our audit opinion on the Company's internal fi nancial controls systemwith reference to fi nancial statements.

Meaning of Internal fi nancial controls with reference to fi nancial statements

A company's internal financial controls with reference to fi nancial statements is aprocess designed to provide reasonable assurance regarding the reliability of fi nancialreporting and the preparation of fi nancial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal fi nancial controlswith reference to fi nancial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyrefl ect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offi nancial statements in accordance with generally accepted accounting principles andthat receipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the fi nancialstatements.

Inherent limitations of internal fi nancial controls with reference to fi nancialstatements

Because of the inherent limitations of internal fi nancial controls with reference tofi nancial 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 fi nancial controls withreference to fi nancial statements to future periods are subject to the risk that theinternal fi nancial controls with reference to fi nancial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

for B S R & Co. LLP
Chartered Accountants
Firm's Registration number: 101248W/W-100022
S Sethuraman
Partner
Membership No.: 203491
ICAI UDIN: 20203491AAABO2908
Place : Chennai
Date : June 11 2020

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