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Syngene International Ltd.

BSE: 539268 Sector: Health care
NSE: SYNGENE ISIN Code: INE398R01022
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OPEN 560.10
PREVIOUS CLOSE 558.85
VOLUME 17898
52-Week high 644.65
52-Week low 201.65
P/E 61.41
Mkt Cap.(Rs cr) 22,304
Buy Price 557.50
Buy Qty 65.00
Sell Price 567.00
Sell Qty 36.00
OPEN 560.10
CLOSE 558.85
VOLUME 17898
52-Week high 644.65
52-Week low 201.65
P/E 61.41
Mkt Cap.(Rs cr) 22,304
Buy Price 557.50
Buy Qty 65.00
Sell Price 567.00
Sell Qty 36.00

Syngene International Ltd. (SYNGENE) - Auditors Report

Company auditors report

To the Members of Syngene International Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the Standalone Financial Statements of Syngene International Limited("the Company") which comprise the standalone balance sheet as at 31 March2020 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the Standalone Financial Statements including asummary of the significant 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 Financial Statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31_March_2020 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the Standalone FinancialStatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the Standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements of the current period.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon. We therefore do not provide aseparate opinion on these matters.

Financial instruments – Hedge accounting

[Refer Note 2(a) and 28 to the Standalone Financial Statements]

The Key Audit Matter

The Company enters into forward option and interest rate swap contracts to hedge itsforeign exchange and interest rate risks. Foreign exchange risks arise from sales tocustomers as significant part of its revenues are denominated in foreign currency withmost of the costs denominated in Indian Rupees (INR). The interest rate risks arises fromthe variable rate of interest on its foreign currency borrowings.

The Company designates a significant portion of its derivatives as cash flow hedges ofhighly probable forecasted transactions. Derivative financial instruments are recognizedat their fair value as of the balance sheet date on the basis of valuation report obtainedfrom third party specialists. Basis such valuations effective portion of derivativemovements are recognized within equity.

These matters are of importance to our audit due to complexity in the valuation ofderivative contracts and complex accounting and documentation requirements under Ind AS109: "Financial Instruments". Lockdowns because of COVID-19 had an impact on itsoperations and thereby impacted Company's estimates relating to occurrence of the highlyprobable forecasted transactions. A_hedging relationship can no longer be continued if theCompany concludes forecasted transactions are not likely to occur. Given the uncertaintiesrelating to COVID-19 judgments and estimates relating to hedge accounting were inherentlycomplex.

How the matter was addressed in our audit

Our audit procedures in relation to hedge accounting include the following amongstothers:

We involved our internal valuation specialists to assess the fair value of thederivatives by testing sample contracts. We analyzed critical terms (such as nominalamount maturity and underlying) of the hedging instrument and the hedged item to assessthey are closely aligned. We analysed the revised estimate of highly probable forecastedtransactions and tested the impact of ineffective hedges. We challenged Company'sassertion relating to its ability to meet its forecasts to be able to assert that hedgeaccounting can be continued by analysing various scenarios to conclude there was nosignificant impact on the year-end financial statements.

Taxation

[Refer Note 2(l) and 30 to the Standalone Financial Statements]

The Key Audit Matter

The Company's operations are majorly based out of units registered as Special EconomicZone (SEZ) and Export Oriented Unit (EOU). Accordingly the Company enjoys certaindeductions/benefits with respect to payment of income-tax and other indirect taxes someof which are subject matters of dispute with tax authorities. The Company periodicallyassesses its tax positions which include examination by the external tax consultant andtax counsels appointed by the Company. Judgment is required in assessing the range ofpossible outcomes for some of these tax matters. The possible outcomes could changesignificantly over time as each of the matter progresses depending on experience on actualassessment proceedings by tax authorities and other judicial precedents. Where the amountof tax liabilities is uncertain the Company recognises accruals/contingent liabilitywhich reflect the Company's best estimate of the outcome based on the facts as at thereporting date. Thus there is a risk of incorrect accounting of accruals and disclosureof contingent liability for tax.

The Company also has significant amount of deferred tax assets primarily comprising ofMinimum Alternate Tax (‘MAT') entitlement credits. These are on account of taxholiday benefits enjoyed by the Company which would expire over a period of 15 years asstipulated under present income tax law. Assessment of recoverability of such MAT creditsrequire the Company to prepare forecasts for future profitability and potential taxliabilities which involves significant judgment and accordingly this is an area of focusfor us.

How the matter was addressed in our audit

Our audit procedures in relation to taxation include the following amongst others:

We obtained an understanding of the key uncertain tax positions based on list ofongoing litigations and tax computations for the current year;

We analysed select key correspondences with the tax authorities to identify anyadditional uncertain tax positions;

We analysed Company's judgment regarding the eventual resolution of matters withvarious tax authorities. In this regard we understood how Company has considered pastexperience where available with the tax authorities in the respective jurisdictions;

We also considered external legal opinions and consultations made by the Company forsignificant matters;

We used our own tax specialists' expertise to assess the key assumptions made byCompany

With respect to our assessment of recoverability of MAT our audit procedures included:

- Assessing the revenue and profit forecast against the historical performance andassessing the Company's plans with respect to new undertakings being setup having taxholiday benefits; and

- We assessed the sensitivity of key assumptions. The growth rate and the impact of taxholiday benefit for future years on the Company's ability to utilize MAT credits includingsensitivity of any of these assumptions because of impact of COVID-19 that has beenconsidered by the Company.

Ind AS 116 - Leases

[Refer Note 2(n) and 34 to the Standalone Financial Statements]

The Key Audit Matter

Ind AS 116 introduces a new lease accounting model where the lessees are required torecognize a Right-Of-Use (ROU) asset and a lease liability arising from a lease on itsbalance sheet. The Company has adopted Ind AS 116 with effect from 1 April 2019 using themodified retrospective approach. Therefore the cumulative effect of adopting Ind AS 116is recognized as an adjustment to the opening balances of the retained earnings as at thedate of transition with no restatement of comparative information.

Lease arrangements in the Company which were previously classified as operating leasesunder Ind AS 17 ‘Leases' and held off balance sheet will need to be recognised withinassets and liabilities under Ind AS 116.

Significant judgements are required in the assumptions and estimates made in order todetermine the ROU asset and lease liability. The assumptions and estimates includeapplication of practical expedients selection of accounting policy choices assessment oflease term determination of applicable incremental borrowing rate among others.

Additionally there is a risk the lease data which is underlying the Ind AS 116computations is incomplete or inaccurate.

As at 31 March 2020 the carrying amount of ROU asset was INR 864 million and leaseliability was INR 873 million.

How the matter was addressed in our audit

Our audit procedures on adoption of Ind AS 116 include the following:

We assessed the selection of accounting policies and practical expedients applied bythe Company. We evaluated the design and implementation of key controls and operatingeffectiveness of the relevant key controls with respect to the Ind AS 116. Based on ourevaluation of the contractual agreements entered into and our understanding of thebusiness assessed the appropriateness of the leases identified by the Company.

On transition to Ind AS 116 with effect from 1 April 2019 we have evaluated the methodof transition and related adjustments. We tested the completeness of the lease data byreconciling the Company's existing lease commitments to the lease data underpinning theInd AS 116 computations. We obtained the Company's quantification of ROU assets and leasesliabilities. We assessed the accuracy of the lease data captured by the Company for asample of leases through inspection of lease contracts. We assessed the accounting policyand disclosures provided under the new lease standard. We also assessed the completenessand mathematical accuracy of the relevant disclosures including those related totransition.

Information Other than the Standalone Financial Statements and Auditor's Report thereon

The Company's Management and Board of Directors are responsible for the otherinformation. The other information comprises of Management Reports such as Board's ReportManagement Discussion and Analysis Corporate Governance Report and BusinessResponsibility Report (but does not include the Standalone Financial Statements and ourAuditor's Report thereon) which we obtained prior to the date of this Auditor's Reportand the remaining sections of Annual Report which are expected to be made available to usafter that date.

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 on the other information that we have obtainedprior to the date of this Auditor's Report 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.

When we read the other sections of Annual Report (other than those mentioned above) ifwe conclude that there is a material misstatement therein we are required to communicatethe matter to those charged with governance and take necessary actions as applicableunder the applicable laws and regulations.

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these Standalone FinancialStatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act.

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

In preparing the Standalone Financial Statements the Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors 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 these Standalone Financial Statements.

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

• Identify and assess the risks of material misstatement of the StandaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to Standalone Financial Statements inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the Standalone Financial Statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of Management and Board of Directors use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the Standalone Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies 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 significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (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 A" a statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable.

2. (A) 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with the Ind ASspecified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 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 toStandalone Financial Statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the 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 as at 31 March 2020 onits financial position in its Standalone Financial Statements - Refer Note 31 to theStandalone 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 28 to the Standalone Financial Statements.

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

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2020.

(C) With respect to the matter to be included in the Auditor's 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
Sampad Guha Thakurta
Partner
Membership Number: 060573
UDIN: 20060573AAAABG1141
Bengaluru
12 May 2020

Annexure A to the Independent Auditor's Report

With reference to the Annexure A referred to in the Independent Auditor's Report to themembers of the Company on the Standalone Financial Statements for the year ended 31 March2020 we report the following:

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. In accordance with this programmecertain fixed assets were verified during the year and no material discrepancies werenoticed on such verification.

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

ii. Inventories apart from goods in transit have been physically verified by theManagement at reasonable intervals during the year and the discrepancies noticed on suchverification between the physical stock and book records were not material.

iii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theCompanies Act 2013 (‘the Act'). Accordingly the provisions of clause 3(iii) (a)(b) and (c) of the Companies (Auditor's Report) Order 2016 ("the Order") arenot applicable to the Company and hence not commented upon.

iv. According to the information and explanations given to us there are no loansguarantees and securities granted in respect of which provisions of Section 185 and 186of the Act are applicable. However the Company has complied with the provisions ofSection 186 of the Act with respect to investments made.

v. According to information and explanations given to us the Company has not acceptedany deposits. Accordingly paragraph 3(v) of the Order is not applicable to the Company.

vi. We have broadly reviewed the books of accounts maintained by the Company pursuantto the Companies (Cost Records and Audit) Rules 2014 as amended prescribed by theCentral Government under Section 148 of the Act and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. However we have notmade a detailed examination of such 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 Employees' State InsuranceIncome-tax Goods and Services tax duty of customs and other material statutory dues havebeen regularly deposited during the year with the appropriate authorities. Howeverregarding the deposit of provident fund dues there have been delays due to timelyavailability of Universal Account Number/ Aadhar Number in respect officertain employees.As explained to us the Company did not have any dues on account of Sales tax duty ofexcise and_cess.

According to the information and explanations given to us no undisputed amountspayable in respect of Employees' State Insurance Provident fund Income-tax Goods andServices tax duty of customs and other material statutory dues were in arrears as at 31March 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 there are no dues ofincome-tax sales tax value added tax service tax duty of customs duty of excisegoods and services tax which have not been deposited with the appropriate authorities onaccount of any disputes other than mentioned below:

Name of the statute Nature of dues Amount disputed (INR in million) Amount paid under protest (INR in million) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 660 - 2002-03 to 2007-08 High Court of Karnataka
Income Tax Act 1961 Income Tax 292 273 2009-10 to 2010-11 Income Tax Appellant Tribunal_(ITAT)
Income Tax Act 1961 Income Tax 3269 394 2008-09 2011-12 to 2016-17 Commissioner of Income Tax (Appeals)

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowings to banks. The Company didnot have any borrowings during the year by way of debentures loans from financialinstitutions or loan from the Government.

ix. According to the information and explanations given to us and based on ourexamination of the records of the Company no monies were raised during the year by theCompany by way of initial public issue or further public offer (including debtinstruments) and term loans.

x. According to the information and explanations given to us no material fraud by theCompany or any fraud on the Company by its officers or employees has been noticed orreported during the year.

xi. According to the information and explanations given to us and based on examinationof the records of the Company the Company has paid/provided managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

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 all transactions with the related parties arein compliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Standalone Financial Statements as required by theapplicable 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 to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable to the Company.

xvi. According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

for B S R & Co. LLP
Chartered Accountants
Firm's Registration Number: 101248W/W-100022
Sampad Guha Thakurta
Partner
Membership Number: 060573
UDIN: 20060573AAAABG1141
Bengaluru
12 May 2020

Annexure B to the Independent Auditor's Report on the Standalone Financial Statementsof Syngene International Limited for the year ended 31 March 2020

Report on the Internal Financial Controls with reference to the aforesaid StandaloneFinancial Statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

(Referred to in paragraph 2(A)(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to Financial Statementsof Syngene International Limited ("the Company") as of 31 March 2020 inconjunction with our audit of the Standalone Financial Statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to Standalone Financial Statements and such internal financialcontrols were operating effectively as at 31 March 2020 based on the internal financialcontrols with reference to Standalone Financial Statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's Management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to Standalone Financial Statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to Standalone Financial Statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to Standalone Financial Statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to Financial Statements were established and maintainedand whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to Standalone Financial Statements andtheir operating effectiveness. Our audit of internal financial controls with reference toStandalone Financial Statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the Standalone Financial Statementswhether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to Standalone Financial Statements.

Meaning of Internal Financial Controls with reference to Standalone FinancialStatements

A company's internal financial controls with reference to Standalone FinancialStatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of Standalone Financial Statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to Standalone Financial Statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the Financial Statements.

Inherent Limitations of Internal Financial Controls with reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference toStandalone Financial Statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to Standalone Financial Statements to future periods are subjectto the risk that the internal financial controls with reference to Standalone FinancialStatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

for B S R & Co. LLP
Chartered Accountants
Firm's Registration Number: 101248W/W-100022
Sampad Guha Thakurta
Partner
Membership Number: 060573
UDIN: 20060573AAAABG1141
Bengaluru
12 May 2020

   

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