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Thermax Ltd.

BSE: 500411 Sector: Engineering
NSE: THERMAX ISIN Code: INE152A01029
BSE 00:00 | 26 Feb 1358.70 67.60
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NSE 00:00 | 26 Feb 1359.35 63.45
(4.90%)
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OPEN 1262.95
PREVIOUS CLOSE 1291.10
VOLUME 12229
52-Week high 1435.00
52-Week low 644.00
P/E 240.05
Mkt Cap.(Rs cr) 16,189
Buy Price 1336.50
Buy Qty 2.00
Sell Price 1360.00
Sell Qty 64.00
OPEN 1262.95
CLOSE 1291.10
VOLUME 12229
52-Week high 1435.00
52-Week low 644.00
P/E 240.05
Mkt Cap.(Rs cr) 16,189
Buy Price 1336.50
Buy Qty 2.00
Sell Price 1360.00
Sell Qty 64.00

Thermax Ltd. (THERMAX) - Auditors Report

Company auditors report

To the Members of

Thermax Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of ThermaxLimited ("the Company") which comprise the Balance sheet as at March 31 2020the Statement of Profit and Loss including the statement of Other Comprehensive Incomethe Cash Flow Statement and the Statement of Changes in Equity for the year then endedand 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 the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020its Profit including other comprehensive income its Cash flows and the changes in equityfor the year ended on that date.

Basis for Opinion

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 ful lled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is suficient and appropriate to provide a basisfor our audit opinion on the standalone Ind AS financial statements.

Emphasis of Matter

We draw attention to note 41 of the accompanying standalone Ind AS financial statementswhich describes the management's evaluation of impact of uncertainties related to COVID-I9and its consequential effects on the carrying value of its trade receivables contractbalances and inventories as at March 31 2020 and the operations of the Company. Ouropinion 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. For each matter below ourdescription of how 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 ful lled the responsibilities described in theAuditor's responsibilities for the audit of the standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key audit matters How our audit addressed the key audit matter
(a) Revenue recognition for Engineering Procurement and Constructions contracts
(refer note 21(c) of the standalone Ind AS financial statements)
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. 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 to 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 change in such judgements and estimates. Our audit procedures included the following
Revenue from such contracts amounted to Rs. 2590.29 crores (including Rs. 873.48 crores pertaining to discontinued operations). • 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 evaluated management's estimates and assumptions for a selected (risk-based method) sample contracts 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 total cost estimates status of the projects and re-calculated the arithmetical accuracy of the same.
• Amongst others for a sample of contracts we performed the following procedures:
• 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.
• 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 also 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 in relation to the above
• 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 Ind AS financial statements.
(b) Impairment of investment in subsidiaries
(Refer note 5 note 6 (a) and 40 note of the standalone Ind AS financial statements)
During the current year impairment indicators were identified by the management on the investments of Rs 930.19 crores. Management's assessment for impairment of investments in subsidiaries requires estimation and judgement around assumptions used including the recoverable value of underlying tangible assets. Our audit procedures for investment balances included the following:
Furthermore the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash ows. 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 forecasting the future Cash flows evaluated the assumptions and compared the 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 Ind AS financial statements.
c) Impairment of financial and contract assets:
(refer note 7 and note 9(b) of the standalone Ind AS Financial Statements)
Impairment of financial assets and contract assets is covered through Expected Credit Losses (ECL) method under Ind AS 109 and is expected to re ect 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 method using individual receivables or 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 2020 the Company recorded an impairment provision of Rs 286.68 crores for its receivables and unbilled revenue. Our audit procedures included the following:
• We evaluated the management's key data sources and assumptions used in the Expected Credit Loss (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 calculation;
• 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 assessed the adequacy of related disclosures in the notes to standalone Ind AS financial statements.

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 Annual report such as the managementreport and chairman's statement 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 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 Management and Those Charged with Governance for the Standalone IndAS 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 section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating 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 Charged With Governance are also responsible for overseeing the Company'sfinancial reporting 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 suficient 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 to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 Ind ASfinancial 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 de ciencies 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 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 Ind AS financial statements comply withthe Accounting Standards specified under section 133 of the Act read with Companies(Indian Accounting 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 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) 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 2" to this report;

(h) 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;

(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 Ind AS financial statements refer note 32(A) to the standaloneInd AS financial statements;

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

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

Annexure 1 as referred to in paragraph 1 under the heading ‘Report on Other Legaland Regulatory Requirements' of our report of even date Re: Thermax Limited ("theCompany")

(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 yearexcept for one factory where physical verification of inventories was conductedsubsequent to the year end due to the lockdown on account of COVID-19. No materialdiscrepancies were noticed on such physical verification. Inventories lying with thirdparties have been confirmed by them as at March 31 2020 and no material discrepancieswere noticed in respect 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 are of the opinionthat prima facie the specified accounts and records have been made and maintained. Wehave not however made a detailed examination of the same.

(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 of excise value added tax and cess on account of any disputeare as follows:

Name of the Statute Nature of Dues Forum where the dispute is pending Period to which amount related Disputed dues not deposited*^ (Rs. in crores)
Central Excise Act 1944 Excise Duty Supreme Court FY 1997 - 98 - [net of deposit Rs 5.31]
Appellate Tribunal** FY 2000-01 to 2015-16 144.01 [net of deposit Rs 5.65]
Income Tax Act 1961 Income Tax High Court AY 1993-94 AY 1996-97 - [net of advance Rs 2.28]
AY 1997-98 AY 2004-05 and AY 2005-06
Appellate Tribunal AY 2003-2004 AY 2005-06 and AY 2009-10 2.66
Appellate Authority upto Commissioner Level AY 2014-15 AY 2015-16 and AY 2016-17 19.33
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 2003- 04 2006- 07 2008- 09 2013- 14 0.08
Appellate Authority upto Commissioner Level** FY 2004 -05 2006 - 07 to 2014 - 15 17.60 [net of deposit Rs 0.25]
Fifinance Act 1994 Service Tax Appellate Tribunal FY 2012-13 to 2015-16 2.66 [net of deposit Rs 0.16]
Customs Act 1962 Custom duty Supreme Court FY 2005-06 - [net of deposit Rs 0.56]
Appellate Authority upto Commissioner Level FY 2005-06 0.59 [net of deposit Rs 0.02]

*net of advances / deposits paid under protest

**excluding cases transferred to wholly owned subsidiary under slump sale. Also refernote 32 of the financial statements ^excluding the interest and penalty thereon

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

(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 Ind AS financial statements and according to the informationand explanations given by the management we report that no fraud by the Company ormaterial 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 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 Ind AS financial statements as required by the applicable accountingstandards.

(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) are not applicable tothe 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.

(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.

Annexure 2 as referred to in paragraph 2(g) under the heading ‘Report on OtherLegal and Regulatory Requirements' of our report of even date Report on the InternalFinancial Controls under clause (i) of sub-section 3 of section 143 of the Companies Act2013 ("the Act")

We have audited the internal financial controls over financial reporting of ThermaxLimited ("the Company") as of March 31 2020 in conjunction with our audit ofthe standalone Ind AS 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 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 and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and ef cient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors 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 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 Act to the extentapplicable to an audit of internal financial controls and both issued by the 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 over financial reporting with reference to these standalone Ind ASfinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

Our 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 ofinternal financial controls over financial reporting included obtaining an understandingof internal financial controls over financial reporting with reference to these standaloneInd AS financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed 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 sufficientand appropriate to provide a basis for our audit opinion on the internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements.

Meaning of Internal Financial Controls Over Financial Reporting with reference to theseFinancial 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 reportingwith reference to these standalone financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit 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 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 financial statements to future periods are subject to the risk thatthe internal financial control over financial reporting with reference to these standaloneInd AS financial statements may become inadequate because of changes in conditions orthat the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements and such internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements were operating effectively as at March 312020 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote 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: 20501160AAAABO4329
Place of Signature: Pune
Date: June 18 2020

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