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Team Lease Services Ltd.

BSE: 539658 Sector: Others
NSE: TEAMLEASE ISIN Code: INE985S01024
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NSE 14:39 | 21 Jun 3543.65 18.55
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OPEN 3490.30
PREVIOUS CLOSE 3516.40
VOLUME 456
52-Week high 4064.95
52-Week low 1630.30
P/E 72.06
Mkt Cap.(Rs cr) 6,059
Buy Price 3539.40
Buy Qty 1.00
Sell Price 3543.30
Sell Qty 14.00
OPEN 3490.30
CLOSE 3516.40
VOLUME 456
52-Week high 4064.95
52-Week low 1630.30
P/E 72.06
Mkt Cap.(Rs cr) 6,059
Buy Price 3539.40
Buy Qty 1.00
Sell Price 3543.30
Sell Qty 14.00

Team Lease Services Ltd. (TEAMLEASE) - Auditors Report

Company auditors report

To the Members of TeamLease Services Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Qualified Opinion

We have audited the accompanying standalone Ind AS financial statements of TeamLeaseServices Limited ("the Company") which comprise the Balance sheet as at March31 2020 the Statement of Profit and Loss including the statement of Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and notes to the standalone Ind AS financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the ‘Basis forQualified Opinion' section of our report the aforesaid standalone Ind AS financialstatements give the information required by the Companies Act 2013 as amended ("theAct") in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2020 its profit including other comprehensive income its cash flows andthe changes in equity for the year ended on that date.

Basis for Qualified Opinion

Attention is invited to Note 44 to the accompanying standalone Ind AS financialstatements more fully explaining management's position in relation to non-provision forpossible shortfall in the value of the assets of the Provident Fund Trust managing theCompany's defined benefit plan ("Team Lease Employees Provident Fund Trust" or"PF Trust"). The PF Trust has made unsecured investments of Rs 17373.78 lakhsin bonds of certain non-banking financial companies ("NBFC Companies") whichare under severe liquidity stress. These bonds fall due for repayment between FY 2020-21to FY 2026-27. In the absence of sufficient evidence regarding eventual repayment of thebonds (including interest arrears) by the NBFC Companies we are unable to comment on theappropriateness or otherwise of management's position regarding the non- provisioning ofthe possible shortfall in the value of the assets of the PF Trust and the consequentialimpact on the standalone Ind AS financial statements and financial position of the Companyas at and for the year ended March 31 2020.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India 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 qualified audit opinion on the standalone Ind AS financial statements.

Emphasis of Matter

We draw attention to Note 45 of the standalone Ind AS financial statements as regardsthe management's evaluation of uncertainties related to COVID-19 and its consequentialeffects on the carrying value of its assets as at March 31 2020 and the operations of theCompany. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 31 2020. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. In addition to the matter describedin the ‘Basis for Qualified Opinion' section we have determined the matters describedbelow to be the key audit matters to be communicated in our report. For each matter belowour description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor's responsibilities forthe audit of the standalone Ind AS financial statements section of our report includingin relation to these matters. Accordingly our audit included the performance ofprocedures designed to respond to our assessment of the risks of material misstatement ofthe standalone Ind AS financial statements. The results of our audit procedures includingthe procedures performed to address the matters below provide the basis for our auditopinion on the accompanying standalone Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
A. Revenue recognition and recoverability of trade receivables
The Company's revenue for the financial year ended March 31 2020 amounts to H 478337.68 Lakhs majority of which are from General staffing and allied services. The Company has various streams of revenue with multiple types of customer contracts characterized by a large volume of transactions. We understood evaluated and tested the operating effectiveness of internal controls over revenue and trade receivables processes.
We selected samples from various types of customer contracts and tested the occurrence completeness and measurement of those transactions by inspecting the underlying documents.
Trade receivables of Rs 23975.66 Lakhs represent significant portion of the total assets as at March 31 2020. The Company has adopted a provisioning policy in respect of trade receivables based on historical trends and available industry information. We performed audit procedures on existence of trade receivables which included obtaining and comparing balance confirmations with books testing of invoices and subsequent receipts for audit samples.
Due to the multiple types of revenue contracts with large volume of transactions and significant judgement required by the management to estimate provision for trade receivable this matter is considered as a key audit matter. We evaluated the assumptions used to calculate the provision for trade receivables through analysis of ageing historical collection and bad debts write-off specific individual circumstances of the customers and forward-looking estimates taking into account the possible effect of current economic environment arising from COVID-19 situation.
Refer to Note 25 and Note 13 to the standalone Ind AS financial statements for the Company's disclosure on revenue and trade receivables respectively. We assessed the disclosures in the standalone Ind AS financial statements for compliance with the disclosure requirements.
B. Investments/ Loans and advances to group companies
As at March 31 2020 the Company has non-current investments in subsidiaries associate and joint venture of Rs 28694.42 Lakhs which are carried at cost. In accordance with Ind AS these investments are tested for impairment using discounted cash-flow models i.e. the recoverable value of each investment is compared to the respective carrying value as at the balance sheet date. A deficit if any between the recoverable value and the carrying value results in an impairment provision. We assessed and tested the operating effectiveness of the internal controls over preparation of annual budgets and future forecasts for various business reporting units including impairment assessment for investments and loans.
We compared the future operating cash flow forecasts considered for impairment assessment with the business plan and budgets duly approved by the Board of Directors of the Company.
The key inputs and assumptions used in the aforesaid model are following: We involved our valuation specialists to perform an evaluation of the Company's valuation model and the underlying key assumptions including long-term growth and discount rates taking into account the possible effect of COVID-19 situation.
- Revenue growth rate
- Operating margins We evaluated sensitivity of the valuation to changes in key assumptions and compared the assumptions to corroborating information including industry reports and competitor's information historic performance of the Company economic developments and industry outlook.
- Long-term growth rate
- Discount rate
Further the Company has granted interest bearing long-term loans to group companies. Management assesses the recoverability of such loans after taking into account the future cash flow surpluses expected to be generated by the respective borrower entities.
Due to the significant carrying values of these investments and loans to group companies; and significant management judgments and estimates involved in performing assessment of impairment and recoverability of loans this matter is considered as a key audit matter. We obtained and read the audited financial statements of the subsidiaries associate and joint venture to understand the net worth cash flows and other financial information.
Refer to Note 6 and Note 8 to the standalone Ind AS financial statements. We assessed the disclosures in the standalone Ind AS financial statements for compliance with the disclosure requirements.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Board's Report Corporate Governance Report BusinessResponsibility Report and Report on Management Discussion and Analysis included in theAnnual report but does not include the standalone Ind AS financial statements and ourauditor's report thereon.

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

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of the Management for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section133oftheActreadwiththeCompanies(IndianAccounting Standards) Rules 2015 as amended. 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; andthe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

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

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith 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 Ind AS financial statements.

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

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

• 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 reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

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

We communicate with those charged with governance 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 Ind AS financialstatements for the financial year ended March 31 2020 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on Other Legal and Regulatory Requirements

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

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

(a) We have sought and except for the matter described in the Basis for QualifiedOpinion paragraph obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit;

(b) Except for the matter described in the Basis for Qualified Opinion paragraph inour opinion proper books of account as required by law have been kept by the Company sofar as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profitand Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;

(d) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph above in our opinion the aforesaid standalone Ind AS financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withCompanies (Indian Accounting Standards) Rules 2015 as amended;

(e) The matter described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct;

(g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above;

(h) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure 1" to this report;

(i) In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act.

(j) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements

– Refer Note 41 to the standalone Ind AS financial statements;

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

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

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Navin Agrawal
Partner
Membership Number: 056102
UDIN: 20056102AAAABE1080
Place: Bengaluru
Date: June 9 2020

Annexure 1

referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" to the Independent Auditor's Report of even date on the Standalone IndAS Financial statements of TeamLease Services Limited.

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

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

(c) According to the information and explanations given by the management there are noimmovable properties included in property plant and equipment of the Company andaccordingly the requirements under paragraph 3(i)(c) of the Order are not applicable tothe Company.

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

(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 theAct. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of the Order are notapplicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us theCompany has not advanced loans to directors / to a company in which the Director isinterested to which provisions of section 185 of the Companies Act 2013 apply and hencenot commented upon. In our opinion and according to the information and explanations givento us provisions of section 186 of the Act in respect of loans and advances giveninvestments made guarantees and securities given to the extent applicable have beencomplied with by the Company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and as explained the Company is not in the businessof sale of any goods. Therefore in our opinion the provisions of clause 3(vi) of theOrder are not applicable to the Company.

(vii) (a) Undisputed statutory dues including income-tax duty of custom goods andservice tax cess and other statutory dues have generally been regularly deposited withthe appropriate authorities though there have been slight delays in remittance of employeestate insurance and provident fund dues in many cases.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax duty ofcustom goods and service tax cess and other statutory dues were outstanding at the yearend for a period of more than six months from the date they became payable.

(c) According to the records of the Company the dues of income-tax and service tax onaccount of any dispute are as follows:

Name of the statute Nature of dues Amount (Rs. in lakhs) Period to which the amount relates Forum where the dispute is pending
Finance Act 1994 Service Tax 445.35# April 2006 to December 2008 The Custom Excise and Service Tax Appellate Tribunal
Finance Act 1994 Service Tax 463.03 October 2010 to July 2017 The Commissioner of Service Tax Bengaluru
Income Tax Act 1961 Income Tax 60.42 Assessment Year 2017-18 The Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 48.85* Assessment Year 2018-19 The Assistant Commissioner of Income Tax

# net of amount paid Rs 442.46 lakhs

*net of amount paid Rs 12.21 lakhs

(viii)In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to afinancial institution or banks. The Company did not have loans and borrowing in respect ofgovernment or dues to debenture holders during the year.

(ix) In our opinion and according to the information and explanations given by themanagement monies raised by the Company by way of term loans were applied for thepurposes for which those were raised. The Company has not raised any money by way ofinitial public offer / further public offer / debt instruments during the year.

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

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

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

(xiv)According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) of the Order are notapplicable to the Company and not commented upon.

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

(xvi)According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Navin Agrawal
Partner
Membership Number: 056102
UDIN: 20056102AAAABE1080
Place: Bengaluru
Date: June 9 2020

Annexure 2 to the Independent Auditor's Report

of even date on the Standalone Ind AS Financial Statements of TeamLease ServicesLimited

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

We have audited the internal financial controls over financial reporting of TeamLeaseServices Limited ("the Company") as of March 31 2020 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements based on our audit. We conducted our audit in accordance with the Guidance Noteand the Standards on Auditing as specified under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls and both issuedby the ICAI. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting with reference to thesestandalone Ind AS financial statements was established and maintained and if such controlsoperated effectively in all material respects.

An audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to thesestandalone Ind AS financial statements and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the internal financial controls overfinancial reporting with reference to these standalone Ind AS financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to theseStandalone Ind AS Financial Statements

A company's internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles.

A company's internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts 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 financialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting WithReference to these Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone Ind AS financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone Ind AS financial statements to future periods are subject to the riskthat the internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our audit amaterial weakness has been identified in the Company's internal financial controls overfinancial reporting as at March 31 2020 as regards non-provision of possible shortfall inthe value of the assets of the Provident Fund Trust managing the Company's defined benefitplan for employees provident fund obligations.

A ‘material weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.

In our opinion except for the possible effects of the material weakness describedabove on the achievement of the objectives of the control criteria the Company hasmaintained in all material respects adequate internal financial controls over financialreporting with reference to these standalone Ind AS financial statements and such internalfinancial controls over financial reporting with reference to these standalone Ind ASfinancial statements were operating effectively as of March 31 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.

Explanatory paragraph

We also have audited in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct the standalone Ind AS financial statements of TeamLease Services Limited whichcomprise the Balance Sheet as at March 31 2020 and the related Statement of Profit andLoss Cash Flow Statement and Statement of Changes in Equity for the year then ended anda summary of significant accounting policies and other explanatory information and ourreport dated June 9 2020 expressed a qualified opinion.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Navin Agrawal
Partner
Membership Number: 056102
UDIN: 20056102AAAABE1080
Place: Bengaluru
Date: June 9 2020