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Tata Elxsi Ltd.

BSE: 500408 Sector: IT
NSE: TATAELXSI ISIN Code: INE670A01012
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OPEN 10643.90
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VOLUME 23686
52-Week high 10760.40
52-Week low 4440.00
P/E 107.17
Mkt Cap.(Rs cr) 66,561
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 10643.90
CLOSE 10576.90
VOLUME 23686
52-Week high 10760.40
52-Week low 4440.00
P/E 107.17
Mkt Cap.(Rs cr) 66,561
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tata Elxsi Ltd. (TATAELXSI) - Auditors Report

Company auditors report

To the Members of Tata Elxsi Limited

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the financial statements of Tata Elxsi Limited ("theCompany") which comprise the balance sheet as at 31 March 2022 and the statement ofprofit and loss (including other comprehensive income) statement of changes in equity andstatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2022 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 Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our Key audit matters are those mattersthat in our professional judgment were of most significance in our audit of thefinancial statements of the current period. These matters were addressed in the context ofour audit of the financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters.

The key audit matter How the matter was addressed in our audit
Amount of revenue recognition in respect of fixed price contracts (Refer Note 2.4 to the financial statements)
The Company engages in fixed price contracts with its customers where revenue from each contract is recognized based on percentage of completion. This involves computation of actual cost incurred and estimation of total cost on each contract to measure progress towards completion (the input method). In view of its significance we applied the following audit procedures in this matter among others to obtain sufficient appropriate audit evidence:
Amount of revenue recognition in respect of fixed price contracts has been identified as a Key Audit Matter considering that: Obtaining an understanding the systems processes and controls implemented by the Company with respect to recognition of actual cost incurred on each contract (including allocation and apportionment) estimation of future cost to completion estimation of provision for onerous contract measurement of unbilled revenue unearned revenue and the total contract revenue on its completion.
these contracts involve identification of actual cost incurred on each contract including allocation and apportionment; Involving Information technology (‘IT’) specialists to assess the design and operating effectiveness of key IT controls relating to revenue recognition and in particular:
these contracts require estimation of future cost- to completion of each contract as well as critical estimates to make provision for onerous contract; IT environment in which the business systems operate including access controls program change controls program development controls and IT operation controls;
at year-end a significant amount of contract assets (unbilled revenue) and contract liabilities (unearned revenue) related to each contract is to be identified Access and application controls pertaining to time recording and allocation systems which prevent unauthorised changes to recording of costs and revenue.
For selected samples of fixed contracts –
Evaluated the contractual terms to identify the performance obligation and assessed the basis of revenue recognition;Checked the approval for estimates of cost to completion by authorised personnel of the Company;
Carried out a retrospective assessment of costs incurred with estimated costs to identify any significant variation and checked whether those variations have been considered in estimating the remaining costs to complete the contract;
Verified the contract assets and contract liabilities on balance sheet by evaluating the underlying documentation to identify possible delays in achieving milestones which require change in estimated costs to complete the remaining performance obligations; and
Checked journal entries impacting the revenue recognition for the period selected based on specified risk-based criteria.
Checked the adequacy of provision in respect of onerous contracts.

Other Information

The Company’s management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in theCompany’s annual report but does not include the financial statements and ourAuditor’s report thereon. The other information is expected to be made available tous after the date of the Auditor’s report.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

Management’s and Board of Directors’ Responsibility for the FinancialStatements

The Company’s Management and Board of Directors are responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these 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 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 designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.

In preparing the financial statements the Management and Board of Directors areresponsible 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 is also responsible for overseeing the Company’s financialreporting process

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs 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 financial statements. As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also: Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

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 financial statements in place andthe operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures in the financial statements made by theManagement and Board of Directors.

Conclude on the appropriateness of the 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’sreport to the related disclosures in the 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 conditionsmay cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies 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 withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor’s report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) Order 2020 ("theOrder") issued by the Central Government in terms of section 143 (11) of the Act wegive in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order 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 balance sheet the statement of profit and loss (including other comprehensiveincome) the statement of changes in equity and the statement of cash flows dealt with bythis Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2022 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2022 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure 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 Auditor’s) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations as at 31 March 2022 onits financial position in its financial statements - Refer Note 33 to the financialstatements.

b) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

d) (i) The management has represented that to the best of its knowledge and belief nofunds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the Company to or in any other personsor entities including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shall: directlyor indirectly lend or invest in other persons or entities identified in any mannerwhatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or provideany guarantee security or the like to or on behalf of the Ultimate Beneficiaries.

(ii) The management has represented that to the best of its knowledge and belief nofunds have been received by the Company from any persons or entities including foreignentities ("Funding Parties") with the understanding whether recorded inwriting or otherwise that the Company shall: directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever ("UltimateBeneficiaries") by or on behalf of the Funding Party or provide any guaranteesecurity or the like from or on behalf of the Ultimate Beneficiaries.

(iii) Based on such audit procedures as considered reasonable and appropriate in thecircumstances nothing has come to our notice that has caused us to believe that therepresentations under subclause (d) (i) and (d) (ii) contain any material mis-statement.

e) The dividend declared or paid during the year by the Company is in compliance withSection 123 of the Act.

(C) With respect to the matter to be included in the Auditor’s Report undersection 197(16) of the Act: In our opinion and according to the information andexplanations given to us the remuneration paid by the Company to its directors during thecurrent year is in accordance with the provisions of Section 197 of the Act. Theremuneration paid to any director is not in excess of the limit laid down under Section197 of the Act. The Ministry of Corporate Affairs has not prescribed other details underSection 197(16) which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm’s Registration No. 101248W/W-100022
Sanjay Sharma
Partner
Place: Bengaluru Membership Number : 063980
Date: 20 April 2022 UDIN: 22063980AHLHBM1662

ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT

With reference to the Annexure A referred to in the paragraph 1 in Report on OtherLegal and Regulatory Requirements of the Independent Auditor’s Report to the membersof Tata Elxsi Limited (‘the Company’) on the Ind AS financial statements for theyear ended 31 March 2022 we report the following:

(i) (a) (A) The Company has maintained proper records showing full particularsincluding quantitative details and situation of Property plant and equipment.

(B) The Company has maintained proper records showing full particulars of Intangibleassets.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has a regular programme of physicalverification of its Property plant and equipment by which all Property plant andequipment are verified in a phased manner over a period of two years. In accordance withthis programme certain Property plant and equipment were verified during the year. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. No material discrepancies were noticedon such verification.

(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 (otherthan immovable properties where the Company is the lessee and the lease agreements areduly executed in favour of the lessee) disclosed in the financial statements are held inthe name of the Company.

(d) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not revalued its Propertyplant and equipment (including Right-of-use assets) or Intangible assets or both duringthe year.

(e) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no proceedings initiated or pendingagainst the Company for holding any benami property under the Prohibition of BenamiProperty Transactions Act 1988 and rules made thereunder.

(ii) (a) The inventory has been physically verified by the management during the year.In our opinion the frequency of such verification is reasonable and procedures andcoverage as followed by management were appropriate. The discrepancies noticed onverification between the physical stock and the book records were not material.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not been sanctioned workingcapital limits in excess of five crore rupees in aggregate from banks on the basis ofsecurity of current assets.

Accordingly clause 3(ii)(b) of the Order is not applicable.

(iii) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not made any investmentsprovided guarantee or security or granted any loans or advances in the nature of loanssecured or unsecured to companies firms limited liability partnerships or any otherparties during the year. Accordingly clause 3(iii) of the Order is not applicable. –

(iv) According to the information and explanations given to us and on the basis of ourexamination of the records the Company has not made any investments given any loansguarantees or security which attracts compliance of section 185 and section 186 ofCompanies act. Accordingly Clause 3(iv) of the Order is not applicable to the Company.

(v) The Company has not accepted any deposits or amounts which are deemed to bedeposits from the public. Accordingly clause 3(v) of the Order is not applicable.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under Section 148(1) of the CompaniesAct 2013 for the products manufactured by it (and/or services provided by it).Accordingly clause 3(vi) of the Order is not applicable.

(vii) (a) The Company does not have liability in respect of Sales tax Service taxDuty of excise and Value added tax during the year since effective 1 July 2017 thesestatutory dues has been subsumed into Goods and Service Tax (‘GST’).

According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including GST Provident fundEmployees’ State Insurance Income-tax Duty of Customs Cess and other materialstatutory dues have generally been regularly deposited with the appropriate authorities.According to the information and explanations given to us no undisputed amounts payablein respect of GST Provident fund Employees’ State Insurance Income-tax Duty ofCustoms Cess and other material statutory dues were in arrears as at 31 March 2022 for aperiod 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 ofGST Provident fund Employees’ State Insurance Income-tax Sales tax Service taxDuty of Customs Value added tax Cess or other statutory dues which have not beendeposited by the Company on account of disputes except for the following:

Name of the Statute Nature of the Dues Amount (Rs. lakhs)* Period to which amount relates (FY) Forum where dispute is pending
The Income Tax Act 1961 Income Tax 67.29 2008-09 Income Tax Appellate Tribunal - Bengaluru
The Income Tax Act 1961 Income Tax 2930.13 2012-13 Commissioner of Income-tax (Appeals) - Bengaluru
The Income Tax Act 1961 Income Tax 40.00 2015-16 Commissioner of Income-tax (Appeals) - Bengaluru
The Income Tax Act 1961 Income Tax 92.26 2016-17 Commissioner of Income-tax (Appeals) - Bengaluru
The Income Tax Act 1961 Income Tax 291.86 2017-18 Commissioner of Income-tax (Appeals) - Bengaluru
The Income Tax Act 1961 Income Tax 6991.05 2019-20 Commissioner of Income-tax (Appeals) - Bengaluru

* These amounts are net of amount paid/ adjusted under protest Rs. 938.14 lakhs.

(viii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company has not surrendered ordisclosed any transactions previously unrecorded as income in the books of account inthe tax assessments under the Income-tax Act 1961 as income during the year.

(ix) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company did not have any loans orborrowings from any lender during the year. Accordingly clause 3(ix)(a) of the Order isnot applicable.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not been declared a wilfuldefaulter by any bank or financial institution or government or government authority.

(c) According to the information and explanations given to us by the management theCompany has not obtained any term loans. Accordingly clause 3(ix)(c) of the Order is notapplicable.

(d) According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company we report that no funds have been raisedon short-term basis by the Company.

Accordingly clause 3(ix)(d) of the Order is not applicable.

(e) According to the information and explanations given to us and on an overallexamination of the financial statements of the Company we report that the Company doesnot have any subsidiaries as defined under the Companies Act 2013. Accordingly clause3(ix)(e) of the Order is not applicable.

(f) According to the information and explanations given to us and procedures performedby us we report that the Company does not have any subsidiaries as defined under theCompanies Act 2013. Accordingly clause 3(ix)(f) of the Order is not applicable.

(x) (a) The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments). Accordingly clause 3(x)(a) of the Order is notapplicable.

(b) According to the information and explanations given to us and on the basis of 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 clause 3(x)(b) of the Order is not applicable.

(xi) (a) Based on examination of the books and records of the Company and according tothe information and explanations given to us considering the principles of materialityoutlined in Standards on Auditing we report that no fraud by the Company or on theCompany has been noticed or reported during the course of the audit.

(b) According to the information and explanations given to us no report undersubsection (12) of Section 143 of the Companies Act 2013 has been filed by the auditorsin Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014with the Central Government.

(c) As represented to us by the management there are no whistle blower complaintsreceived by the Company during the year.

(xii) According to the information and explanations given to us the Company is not aNidhi Company.

Accordingly clause 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe transactions with related parties are in compliance with Sections 177 and 188 of theCompanies Act 2013 where applicable and the details of the related party transactionshave been disclosed in the standalone financial statements as required by the applicableIndian Accounting Standards.

(xiv) (a) Based on information and explanations provided to us and our auditprocedures in our opinion the Company has an internal audit system commensurate with thesize and nature of its business.

(b) We have considered the internal audit reports of the Company issued till date forthe period under audit.

(xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with its directors or personsconnected to its directors and hence provisions of Section 192 of the Companies Act 2013are not applicable to the Company.

(xvi) (a) T he Company is not required to be under Section 45-IA of the Reserve Bank ofIndia Act 1934. Accordingly clause 3(xvi)(a) of the Order is not applicable.

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

(c) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India.

Accordingly clause 3(xvi)(c) of the Order is not applicable.

(d) According to the information and explanations provided to us during the course ofaudit the Company does not have any CIC. Accordingly the requirements of clause3(xvi)(d) are not applicable.

(xvii) The Company has not incurred cash losses in the current and in the immediatelypreceding financial year.

(xviii) T here has been no resignation of the statutory auditors during the year.Accordingly clause 3(xviii) of the Order is not applicable.

(xix) A ccording to the information and explanations given to us and on the basis ofthe financial ratios ageing and expected dates of realisation of financial assets andpayment of financial liabilities other information accompanying the financial statementsour knowledge of the Board of Directors and management plans and based on our examinationof the evidence supporting the assumptions nothing has come to our attention whichcauses us to believe that any material uncertainty exists as on the date of the auditreport that the Company is not capable of meeting its liabilities existing at the date ofbalance sheet as and when they fall due within a period of one year from the balance sheetdate.

We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.

(xx) (a) In our opinion and according to the information and explanations given to usin respect of other than ongoing projects there is no unspent amount under sub-section(5) of Section 135 of the Companies Act 2013 pursuant to any project. Accordinglyclauses 3(xx)(a) of the Order are not applicable.

(b) In our opinion and according to the information and explanations given to us theCompany has not transferred the amount remaining unspent in respect of ongoing projectsto a Special Account till the date of our report. However the time period for suchtransfer i.e. thirty days from the end of the financial year as permitted under thesubsection (6) of section 135 of the Act has not elapsed till the date of our report.

ANNEXURE B

TO THE INDEPENDENT AUDITOR’S REPORT ON THE FINANCIAL STATEMENTS OF TATA ELXSILIMITED FOR THE PERIOD ENDED 31 MARCH 2022.

Report on the internal financial controls with reference to the aforesaid financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 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 Tata Elxsi Limited ("the Company") as of 31 March 2022 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2022 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

Management’s Responsibility for Internal Financial Controls

The Company’s management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to 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 financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 Company’s internal financial controlswith reference to financial statements.

Meaning of Internal Financial controls with Reference to Financial Statements

A company’s internal financial controls with reference to financial statements isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles.

A company’s internal financial controls with reference to financial statementsinclude those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial controls with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm’s Registration No. 101248W/W-100022
Sanjay Sharma
Partner
Place: Bengaluru Membership Number : 063980
Date: 20 April 2022 UDIN: 22063980AHLHBM1662

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