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Team Lease Services Ltd.

BSE: 539658 Sector: Others
NSE: TEAMLEASE ISIN Code: INE985S01024
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VOLUME 366
52-Week high 5544.10
52-Week low 2912.00
P/E 60.57
Mkt Cap.(Rs cr) 5,648
Buy Price 3302.15
Buy Qty 2.00
Sell Price 3305.85
Sell Qty 1.00
OPEN 3275.00
CLOSE 3274.95
VOLUME 366
52-Week high 5544.10
52-Week low 2912.00
P/E 60.57
Mkt Cap.(Rs cr) 5,648
Buy Price 3302.15
Buy Qty 2.00
Sell Price 3305.85
Sell Qty 1.00

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 statementsof TeamLease Services Limited ("the Company") which comprise the Balance Sheetas at March 31 2021 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the standalone Ind AS financial statements including asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us except for the effects of the matter described in the‘Basis for Qualified Opinion' section of our report the aforesaid standaloneInd AS financial statements give the information required by the Companies Act 2013 asamended ("the Act") in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2021 its profit including other comprehensiveincome its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

Attention is invited to Note 46 to the accompanying standalone Ind ASfinancial statements more fully explaining management's position in relation tonon-provision for possible shortfall in the value of the assets of the Provident FundTrust managing the Company's defined benefit plan ("Team Lease EmployeesProvident Fund Trust" or "PF Trust"). The PF Trust has made unsecuredinvestments of RS 17373.78 lakhs in bonds of certain non-banking financial companies("NBFC Companies") which are under severe liquidity stress. These bonds falldue for repayment between FY 2020-21 to FY 2026-27. In the absence of sufficient evidenceregarding eventual repayment of the bonds (including interest arrears) by the NBFCCompanies we are unable to comment on the appropriateness or otherwise ofmanagement's position regarding the non- provisioning of the possible shortfall inthe value of the assets of the PF Trust and the consequential impact on the standalone IndAS financial statements and financial position of the Company as at and for the year endedMarch 31 2021. Our audit report for the year ended March 31 2020 was also qualified inrespect of this matter.

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the‘Auditor's Responsibilities for the Audit of the Standalone Ind AS FinancialStatements' section of our report. We are independent of the Company in accordancewith the ‘Code of Ethics' issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualified audit opinion on the standalone Ind ASfinancial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone Ind AS financial statements forthe financial year ended March 31 2021. These matters were addressed in the context ofour audit of the standalone Ind AS financial statements as a whole and in forming ouropinion thereon and we do not provide a separate opinion on these matters. In addition tothe matter described in the ‘Basis for Qualified Opinion' section we havedetermined the matters described below to be the key audit matters to be communicated inour report. For each matter below our description of how our audit addressed the matteris provided in that context.

We have fulfilled the responsibilities described in the Auditor'sresponsibilities for the audit of the standalone Ind AS financial statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone Ind AS financial statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion 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 revenues for the financial year ended March 31 2021 is RS 446593.69 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 revenues and trade receivables processes.
Trade receivables of RS 21594.23 Lakhs represent significant portion of the total assets as at March 31 2021. The Company has adopted a provisioning policy in respect of trade receivables based on historical trends and available industry information. We selected samples from various types of customer contracts and tested the occurrence completeness and measurement of those transactions by inspecting the underlying documents.
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 receivables this matter is considered as a key audit matter. We performed audit procedures on existence of trade receivables which included obtaining and comparing balance confirmations with books testing of invoices and subsequent collections for audit samples selected.
Refer to Note 27 and Note 15 to the standalone Ind AS financial statements for the Company's disclosures on revenues and trade receivables respectively. We evaluated the assumptions used to calculate the provision for trade receivables through analysis of ageing historical collection and bad debts write-off trends 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.
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 2021 the Company has non-current investments in subsidiaries and joint venture of RS 31388.48 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. 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 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.
• Operating margins We obtained and read the audited financial statements of the subsidiaries and joint venture to understand the net worth cash flows and other financial information.
• Long-term growth rate We assessed the disclosures in the standalone Ind AS financial statements for compliance with the disclosure requirements.
• 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.
Refer to Note 7 and Note 9 to the standalone Ind AS financial statements.

 

Other Information

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the Board's Report Corporate GovernanceReport Business Responsibility Report and Report on Management Discussion and Analysisincluded in the Annual report but does not include the standalone Ind AS financialstatements and our auditor's report thereon.

Our opinion on the standalone Ind AS financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the standalone Ind AS financialstatements our responsibility is to read the other information and in doing so considerwhether such other information is materially inconsistent with the financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Responsibilities of the Management for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standaloneInd AS financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and the design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements management isresponsible 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 management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind ASFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance but is not a guarantee that anaudit conducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone Ind AS financialstatements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3) (i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's 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 thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind AS financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalone IndAS financial statements for the financial year ended March 31 2021 and are therefore thekey audit 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 (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the "Annexure 1" a statement on thematters specified in paragraphs 3 and 4 of the Order.

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

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

(b) Except for the matter described in the Basis for Qualified Opinionparagraph in our opinion proper books of account as required by law have been kept bythe Company so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash Flow Statement and Statement of Changesin Equity dealt with by this Report are in agreement with the books of account;

(d) Except for the effects of the matter described in the Basis forQualified Opinion paragraph above in our opinion the aforesaid standalone Ind ASfinancial statements comply with the Accounting Standards specified under Section 133 ofthe Act read with Companies (Indian Accounting Standards) Rules 2015 as amended;

(e) The matter described in the Basis for Qualified Opinion paragraphabove in our opinion may have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director in termsof Section 164 (2) of the Act;

(g) The qualification relating to the maintenance of accounts and othermatters connected therewith are as stated in the Basis for Qualified Opinion paragraphabove;

(Rs) With respect to the adequacy of the internal financial controlswith reference to standalone Ind AS financial statements and the operating effectivenessof such controls refer to our separate Report in "Annexure 2" to this report;

(i) In our opinion the managerial remuneration for the year endedMarch 31 2021 has been paid / provided by the Company to its directors in accordance withthe provisions of section 197 read with Schedule V to the Act.

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

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements – Refer Note 43 tothe standalone Ind AS financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to theInvestor Education 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: 21056102AAAABK5724

Place: Bengaluru

Date: June 9 2021

ANNEXURE 1

referred to in paragrapRs 1 under "Report on Other Legal andRegulatory Requirements" to the Independent Auditor's Report of even date on theStandalone Ind AS Financial statements of TeamLease Services Limited.

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

(b) All fixed assets have not been physically verified by themanagement during the year but there is a regular programme of verification which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by themanagement and audit procedures performed by us there are no immovable propertiesincluded in property plant and equipment of the Company and accordingly the requirementsunder paragrapRs 3(i) (c) of the Order are not applicable to the Company.

(ii) The Company's business does not involve inventories andaccordingly the requirements under paragrapRs 3(ii) of the Order are not applicable tothe Company.

(iii) (a) The Company has granted loan to one of its wholly ownedsubsidiary company covered in the register maintained under section 189 of the Act. In ouropinion and according to the information and explanations given to us the terms andconditions of the grant of such loan are not prejudicial to the Company's interest.

(b) The loan granted is re-payable on demand. We are informed that thecompany has not demanded repayment of any such loan during the year and thus there hasbeen no default on the part of the party to whom the money has been lent. The payment ofinterest has been regular.

(c) There are no amounts of loans granted to companies firms or otherparties listed in the register maintained under section 189 of the Act which are overduefor more than ninety days.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has not advanced loans to Directors / to a company in whichDirectors are interested to which provisions of section 185 of the Act apply and hence notcommented upon. In our opinion and according to the information and explanations given tous 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 ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). 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 notin the business of sale of any goods. Therefore in our opinion the provisions of clause3(vi) of the Order are not applicable to the Company.

(vii) (a) Undisputed statutory dues including income-tax duty ofcustom goods and service tax cess and other statutory dues have generally been regularlydeposited with the appropriate authorities though there have been slight delays inremittance of professional tax in few cases and serious delays in remittance of employeestate insurance and provident fund dues in many cases.

(b) According to the information and explanations given to us and auditprocedures performed by us no undisputed amounts payable in respect of provident fundemployees' state insurance income-tax duty of custom goods and service tax cessand other statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable.

(c) According to the records of the Company the dues of income-tax andservice tax on account 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

29.65

Assessment Year 2013-14 The Commissioner of Income Tax (Appeals)
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 explanationsgiven by the management the Company has not defaulted in repayment of loans or borrowingto a financial institution or banks. The Company did not have loans and borrowing inrespect of government or dues to debenture holders during the year.

(ix) In our opinion and according to the information and explanationsgiven by the management and audit procedures performed by us monies raised by the Companyby way of term loans were applied for the purposes for which those were raised. TheCompany has not raised any money by way of initial public offer / further public offer /debt instruments during the year.

(x) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management we report that no fraud by theCompany or no fraud on the Company by the officers and employees of the Company has beennoticed or reported during the year.

(xi) According to the information and explanations given by themanagement and audit procedures performed by us the managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

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

(xiii) According to the information and explanations given by themanagement and audit procedures performed by us transactions with the related parties arein compliance with section 177 and 188 of Act where applicable and the details have beendisclosed in the notes to the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations given to us and onan overall examination of the balance sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence reporting requirements under clause 3(xiv) of the Orderare not applicable to the Company and not commented upon.

(xv) According to the information and explanations given by themanagement and audit procedures performed by us the Company has not entered into anynon-cash transactions with directors or persons connected with him as referred to insection 192 of the Act.

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

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Navin Agrawal

Partner

Membership Number: 056102

UDIN: 21056102AAAABK5724

Place: Bengaluru

Date: June 9 2021

ANNEXURE 2

to the Independent Auditor's Report of even date on the StandaloneInd AS Financial Statements of TeamLease Services Limited

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference tostandalone Ind AS financial statements of TeamLease Services Limited ("theCompany") as of March 31 2021 in conjunction with our audit of the standalone IndAS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting 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 offrauds and 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'sinternal financial controls with reference to these standalone Ind AS financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing as specified under section 143(10) of the Act to theextent applicable to an audit of internal financial controls both issued by ICAI. 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 these standalone Ind AS financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

An audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to standalone Ind ASfinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to standalone Ind AS financial statements included obtaining anunderstanding of internal financial controls with reference to these standalone Ind ASfinancial statements 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 includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualified audit opinion on the Company'sinternal financial controls with reference to these standalone Ind AS financialstatements.

Meaning of Internal Financial Controls With Reference to Standalone IndAS Financial Statements

A Company's internal financial controls with reference tostandalone 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 with reference tostandalone 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 thefinancial statements.

Inherent Limitations of Internal Financial Controls With Reference toStandalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls withreference to standalone Ind AS financial statements including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls with reference to standalone Ind AS financial statements tofuture periods are subject to the risk that the internal financial control with referenceto standalone 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 onour audit a material weakness has been identified in the Company's internalfinancial controls as at March 31 2021 as regards non-provision of possible shortfall inthe value of the assets of the Provident Fund Trust managing the Company's definedbenefit plan for employees provident fund obligations. Our audit report for the year endedMarch 31 2020 was also qualified in respect of this matter.

A ‘material weakness' is a deficiency or a combination ofdeficiencies in internal financial control with reference to standalone Ind AS financialstatements such that there is a reasonable possibility that a material misstatement ofthe company's annual or interim financial statements will not be prevented ordetected on a timely basis.

In our opinion except for the possible effects of the materialweakness described above on the achievement of the objectives of the control criteria theCompany has maintained in all material respects adequate internal financial controlswith reference to these standalone Ind AS financial statements and such internal financialcontrols with reference to standalone Ind AS financial statements were operatingeffectively as of March 31 2021 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the ICAI.

Explanatory paragraph

We also have audited in accordance with the Standards on Auditingissued by ICAI as specified under Section 143(10) of the Act the standalone Ind ASfinancial statements of TeamLease Services Limited which comprise the Balance Sheet as atMarch 31 2021 and the related Statement of Profit and Loss including the statement ofOther Comprehensive Income the Cash Flow Statement and the Statement of Changes in Equityfor the year then ended and notes to the standalone Ind AS financial statementsincluding a summary of significant accounting policies and other explanatory information.This material weakness was considered in determining the nature timing and extent ofaudit tests applied in our audit of the March 31 2021 standalone Ind AS financialstatements of TeamLease Services Limited and this report affects our report dated June 92021 which expressed a qualified opinion on those financial statements.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Navin Agrawal

Partner

Membership Number: 056102

UDIN: 21056102AAAABK5724

Place: Bengaluru

Date: June 9 2021

.