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Thermax Ltd.

BSE: 500411 Sector: Engineering
NSE: THERMAX ISIN Code: INE152A01029
BSE 00:00 | 29 Jun 2017.20 -5.90
(-0.29%)
OPEN

2009.80

HIGH

2056.70

LOW

2009.00

NSE 00:00 | 29 Jun 2019.55 -7.55
(-0.37%)
OPEN

2020.90

HIGH

2057.75

LOW

2005.05

OPEN 2009.80
PREVIOUS CLOSE 2023.10
VOLUME 1387
52-Week high 2347.00
52-Week low 1288.35
P/E 113.52
Mkt Cap.(Rs cr) 24,035
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2009.80
CLOSE 2023.10
VOLUME 1387
52-Week high 2347.00
52-Week low 1288.35
P/E 113.52
Mkt Cap.(Rs cr) 24,035
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Thermax Ltd. (THERMAX) - Auditors Report

Company auditors report

To the Members of Thermax Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Thermax Limited("the Company") which comprise the Balance sheet as at March 31 2021 theStatement of Profit and Loss including the Statement of Other Comprehensive Income theCash Flow Statement and the Statement of Changes in Equity for the year then ended andnotes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2021 its profitincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act.

Our responsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the standalone Financial Statements' section of ourreport.

We are independent of the Company in accordance with the ‘Code of Ethics' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone financial statements.

Emphasis of Matters

We draw attention to note 41 to the standalone financial statements which describes themanagement's evaluation of impact of uncertainties related to COVID-19 and itsconsequential effects on the carrying value of its trade receivables contract balancesand inventories as at March 31 2021 and the operations of the Company. Our opinion is notmodified 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 financial statements for the financial yearended March 31 2021. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone 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 financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying standalone financial statements.

Key audit matter How our audit addressed the key audit matter
(a) Revenue recognition for Engineering. Procurement and Construction contracts (refer note 21(c) of the standalone financial statements)
Our audit procedures included the following:
The Company's significant portion of business is undertaken through Engineering Procurement and Construction (EPC) contracts. Revenue from these contracts is recognized over a period of time in accordance with the requirements of Ind AS 115 Revenue from Contracts with Customers. • We understood the Company's policies and processes control mechanisms and methods in relation to the revenue recognition for these contracts and evaluated the design and operative effectiveness of the financial controls from the above through our test of control procedures
We consider the accounting for such contracts to be an area posing a significant risk of material misstatement and accordingly a key audit matter as due to the nature of the contracts revenue is accounted over a period of time (using input method) which requires identification of contractual obligations significant judgement with regards to determining contract costs incurred till date compared to estimated total contract costs the Company's rights to receive payments for performance completed till date changes in scope and consequential revised contract price and recognition of the liability for loss making contracts/ onerous obligations. Revenues and profits for the year under audit may deviate significantly on account of changes in such judgements and estimates. • We evaluated management's estimates and assumptions for a selected (risk-based method) sample contracts (including contracts impacted by COVID-19) and inspected the underlying documents which form the basis of revenue recognition under the input method. We evaluated the management's process to recognize revenue over a period of time determine cost estimates status of the projects and tested the arithmetical accuracy of the same.
• Amongst others for a sample of contracts we performed the following procedures:
Furthermore for the financial year 2020-21 the effects of the coronavirus pandemic (COVID-19) on the project business such as delays in project execution due to access restrictions at customer sites including short-term interruptions to supply chains as well as the invocation of force majeure contractual penalties for delays in delivery or any material changes in such contracts and the underlying accounting treatment were of key significance for our audit. • Provision for liquidated damages: Our procedures involved discussions with management and project teams to understand the status of the project and on-going discussions with the customers in terms of likelihood of imposing any contractual penalties and analyzed the above through inspection of the relevant documents and correspondences
Revenue from such contracts amounted to Rs. 1600.31 crores for the year. • Contingency provisions: We understood the management's estimate and rationale for provision movement during the year. We analyzed the movement throughout the life of the contract and discussed progress to date with individual project teams to determine whether the remaining contingency was sufficient to cover residual risks of those projects
• Assessment of costs-to-complete: We performed procedures on balance cost estimation tested the historical accuracy of previous forecasts and discussed variances with project teams. We tested that the costs incurred were accrued at year-end and tested the assumptions for balance costs-to-complete
• We understood the management's assessment of the impact due to the lockdown and other restrictions caused by COVID-19 on project execution as well as the afore-mentioned procedures
• We performed analytical procedures and checked exceptions for contracts with low or negative margins loss making contracts/ onerous contracts contracts with significant changes in cost estimates and significant overdue net receivable positions for contracts with marginal or no movement to determine the level of provisioning required
• We read and tested the presentation and disclosure of such EPC contracts in the standalone financial statements
b) Impairment of investment in subsidiaries : (refer notes 5 6(a) and 40 of the standalone financial statements)
Our audit procedures for investment balances included the following:
During the current year impairment indicators were identified by the management for investments in certain subsidiaries. Management's assessment for impairment of investments in subsidiaries requires estimation and judgement around assumptions used including the recoverable value of underlying tangible assets. Furthermore the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows including impact due to uncertainties arising out of COVID-19. Changes to assumptions could lead to material changes in the estimated recoverable amount impacting both potential impairment charges and also potential reversals of impairment taken in prior years. Accordingly this is considered as a key audit matter. • We understood the management's process of evaluating the triggers for impairment forecasting the future cash flows evaluation of assumptions and comparison of estimates to externally available industry economic and financial data wherever available and necessary
• We assessed that the methodology used by management to estimate the recoverable value of each investment is consistent with accounting standards
• We assessed the assumptions used by the management to determine the recoverable amount of the investment in subsidiaries
• We compared the carrying values of the Company's investment in these subsidiaries for which audited financial statements were available with their respective net asset values and discussed with management about their performance and future outlook
• We considered the potential impact of reasonably possible downside changes in these key assumptions as part of sensitivity analysis
• We read and assessed the presentation and disclosure of such impairment in the standalone financial statements.
c) Impairment of trade receivables and contract assets: (refer note 7 and note 9(b) of the standalone financial statements)
Our audit procedures included the following:
Impairment of financial assets and contract assets is covered through Expected Credit Losses (ECL) method under Ind AS 109 and is expected is to reflect the general pattern of deterioration or improvement in the credit quality of financial instruments. Impairment of financial assets is a key audit matter as the Company has devised a model to recognize impairment through ECL using individual receivables or for homogeneous group of receivables with similar credit risk characteristics. The calculation of the impairment allowance under expected credit losses is highly judgmental as it requires management to make significant assumptions on customer payment behaviour and other relevant risk characteristics when assessing the Company's statistics of historical information and estimating the level and timing of expected future cash flows. The timing of future cash flows may also vary to some extent due to COVID-19. As at the March 31 2021 the Company recorded an impairment provision of Rs 287.17 crores for its receivables and unbilled revenue. • We evaluated the management's key data sources and assumptions used in the ECL model to determine impairment provisions including any updates to such assumptions due to COVID-19
• We understood the management's basis to consider the associated risks for identifying homogeneous group of receivables
• We evaluated the process followed by the Company's for determination of credit risk and the resultant basis for classification of receivables into various stages
• For a sample of receivables we tested the ageing of the receivables considered for impairment calculations
• We assessed the completeness of financial assets included in the ECL calculations as of the reporting date
• We considered the consistency of various inputs and assumptions used by the Company's management to determine impairment provisions
• We read and tested the disclosures in the notes to standalone financial statements are as per the relevant accounting standards

We have determined that there are no other key audit matters to communicate in ourreport.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Chairman's statement ManagingDirector's statement Business Responsibility Report and Director's Report includingannexure to the Director's Report of the Annual Report of the Company but does notinclude the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above 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 Management and Those Charged with Governance for the StandaloneFinancial 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 financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.

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

In preparing the standalone financial statements 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 Charged With Governance are also responsible for overseeing the Company'sfinancial reporting process.

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

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

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

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion.

The risk of not detecting a material misstatement resulting from fraud is higher thanfor one resulting from error as fraud may involve collusion forgery intentionalomissions 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 Companyhas adequate internal financial controls with reference to financial statements in placeand the 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 standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsfor the financial year ended March 31 2021 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) The matter described in ‘Emphasis of Matter' paragraph above in our opinionmay not 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 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct;

(g) With respect to the adequacy of the internal financial controls with reference tostandalone financial statements and the operating effectiveness of such controls refer toour separate report in "Annexure 2" to this Report;

(h) In our opinion the managerial remuneration for the year ended March 31 2021 hasbeen paid/ provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(i) 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 financial statements - refer note 32(A) to the standalonefinancial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - refer note 17(b) to the standalone financial statements;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/ E300003

per Tridevlal Khandelwal

Partner

Membership Number: 501160

UDIN: 21501160AAAABN1384

Place: Pune

Date: May 25 2021

Annexure 1 as referred to in paragraph 1 under the heading 'Report on Other Legal andRegulatory Requirements' of our report of even date

Re: Thermax Limited ("the Company")

(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 the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company.

(ii) The inventories have been physically verified by the management during the year.In our opinion the frequency of verification is reasonable. No material discrepancieswere noticed on such physical verification. Inventories lying with third parties have beenconfirmed by them as at March 31 2021 and no material discrepancies were noticed inrespect of such confirmations.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013 (‘the Act'). Accordingly the provisions of clause 3(iii)(a) (b)and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Act in respect of loans to directors includingentities in which they are interested and in respect of loans and advances giveninvestments made and guarantees and securities given have been complied with by theCompany.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits within the meaning of Sections 73 to 76 of the Actand the Companies (Acceptance of Deposits) Rules 2014 as amended. Accordingly theprovisions of clause 3(v) of the Order are not applicable to the Company and hence notcommented upon.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Act related to the manufacture of ‘chemicals' and ‘othermachinery' and are of the opinion that prima facie the specified accounts and recordshave been made and maintained. We have not however made a detailed examination of thesame.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax duty of custom goods and services tax cess and other statutory dues applicable toit.

(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 services tax cess and other statutory dues were outstanding at theyear end 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 sales-tax servicetax duty of custom duty

Name of the statute Nature of dues Forum where the dispute is pending Period to which amount related Disputed dues not deposited**
Central Excise Act 1944 Excise Duty Excise Duty Supreme Court FY 1991-99 [net of deposit Rs 5.31]
Appellate Tribunal FY 2006-07 to 2012-13 2017-18 144.06 [net of deposit Rs 5.65]
Income Tax Act 1961 Income tax High Court AY 2005-06 [net of advance Rs 3.30]
Commissioner of Income Tax (Appeals) AY 2014-15 AY 2015-16 and AY 2016-17 8.28 [net of advance Rs 24.03]
Central Sales Tax and Local Sales tax Sales tax and Value Added Tax High Court FY 2000-01 2001-02 2010-11 to 2014-15 43.47 [net of deposit Rs 0.20]
Appellate Tribunal FY 2006- 07 2013- 14 0.01
Appellate Authority upto Commissioner Level FY 2004 -05 2006 - 07 2007 - 08 2009- 10 to 2016-17 18.60 [net of deposit Rs 0.37]
Finance Act 1994 Service Tax Appellate Tribunal FY 2012-13 to 2017-18 2.66 [net of deposit Rs 0.16]
Custom Act 1962 Custom duty Supreme Court FY 2005-06 [net of deposit Rs 0.56]
Appellate Authority upto Commissioner Level FY 2005-06 0.60 [net of deposit Rs 0.02]

*net of advances/ deposits paid under protest Excluding the interest and penaltythereon of excise value added tax and cess on account of any dispute are as follows:

(ix) According to the information and explanations given by the management the Companyhas not raised any money way of initial public offer/ further public offer/ debtinstruments and term loans hence reporting under clause (ix) is not applicable to theCompany and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the standalone financial statements and according to the information andexplanations given by the management we report that no fraud by the Company or 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 requisite approvalsmandated 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 section 188of the Act where applicable and the details have been disclosed in the notes to thestandalone financial statements 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 therefore reporting requirements under clause 3(xiv) are not applicableto the Company and hence 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 and hence reporting requirements underclause 3(xv) are not applicable to the Company.

(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 andhence reporting requirements under clause 3(xvi) are not applicable to the Company.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/ E300003

per Tridevlal Khandelwal

Partner

Membership Number: 501160

UDIN: 21501160AAAABN1384

Place: Pune Date: May 25 2021

Annexure 2 as referred to in paragraph 2(g) under the heading 'Report on Other Legaland Regulatory Requirements' of our report of even date

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 with reference to standalone financialstatements of Thermax Limited ("the Company") as of March 31 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that 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 Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to these standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditing asspecified under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both issued by ICAI. 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 tothese standalone financial statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to these standalone financial statementsand their operating effectiveness. Our audit of internal financial controls with referenceto standalone financial statements included obtaining an understanding of internalfinancial controls with reference to these standalone financial statements assessing therisk that a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement 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 controls withreference to these standalone financial statements.

Meaning of Internal Financial Controls with Reference to these Standalone FinancialStatements

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

Inherent Limitations of Internal Financial Controls with Reference to StandaloneFinancial Statements

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

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols with reference to standalone financial statements were operating effectively asat March 31 2021 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by the ICAI.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/ E300003

per Tridevlal Khandelwal

Partner

Membership Number: 501160

UDIN: 21501160AAAABM8088

Place: Pune

Date: May 25 2021

.