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Torrent Pharmaceuticals Ltd.

BSE: 500420 Sector: Health care
NSE: TORNTPHARM ISIN Code: INE685A01028
BSE 12:14 | 23 Sep 3057.55 -29.80
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NSE 12:04 | 23 Sep 3054.00 -31.50
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OPEN 3108.60
PREVIOUS CLOSE 3087.35
VOLUME 49188
52-Week high 3226.05
52-Week low 2311.30
P/E 46.45
Mkt Cap.(Rs cr) 51,740
Buy Price 3054.50
Buy Qty 5.00
Sell Price 3057.25
Sell Qty 10.00
OPEN 3108.60
CLOSE 3087.35
VOLUME 49188
52-Week high 3226.05
52-Week low 2311.30
P/E 46.45
Mkt Cap.(Rs cr) 51,740
Buy Price 3054.50
Buy Qty 5.00
Sell Price 3057.25
Sell Qty 10.00

Torrent Pharmaceuticals Ltd. (TORNTPHARM) - Auditors Report

Company auditors report

To the Members of

Torrent Pharmaceuticals Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Torrent Pharmaceuticals Limited("the Company") which comprise the standalone balance sheet as at 31stMarch 2021 and the standalone statement of profit and loss (including othercomprehensive income) standalone statement of changes in equity and standalone statementof cash flows for the year then ended and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation. In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("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 31st March2021 and profit and other comprehensive income changes in equity and its cash flows forthe year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Description of Key Audit Matters

1. Impairment testing of goodwill [Refer Note 4.8.2 8 and 9 to the StandaloneFinancial Statements]

The Key Audit Matter How the matter was addressed in our audit
As disclosed in Note 4.8.2 to the standalone financial statements the Company tests goodwill for impairment annually or more frequently when there is an indication that the cash generating unit to which goodwill has been allocated may be impaired. Our audit procedures in respect of impairment testing of goodwill included the following:
We identified the annual impairment assessment of goodwill as a key audit matter because the assessment process is complex and judgemental by nature and is based on assumptions on: • Testing operating effectiveness of controls over determination of the recoverable amounts of cash generating units. Cash generating units for this purpose are those to which the goodwill is allocated;
• Evaluating the model used in determining the value in use of the cash generating units;
- projected future cash inflows; • Assessing the accuracy of prior period cash flow forecasts of the Company by reference to actual performance to assess forecast accuracy;
- expected growth rate and profitability; • Challenging the significant assumptions and judgements used in impairment analysis such as forecast revenue margins long-term growth and discount rates in comparison to economic and industry forecasts with the assistance of our valuations specialist especially in light of the existing economic situation due to COVID-19;
- discount rate; • Performing sensitivity analysis of the key assumptions such as future revenue growth rates future gross margins and the discount rate used in determining the recoverable value;
- perpetuity value based on long-term growth rate; • Evaluating the adequacy of disclosures including disclosures of key assumptions judgements and sensitivities.
- sensitivity analyses;

2. Recognition and measurement of Minimum Alternate Tax (MAT) Credit Entitlement– Deferred tax assets (Refer Note 4.13 and 22 to the Standalone FinancialStatements):

The Key Audit Matter How the matter was addressed in our audit
The Company pays minimum alternate tax (MAT) under Section 115JB of the Income Tax Act 1961. The MAT paid would be available as an offset over a period of 15 years. As disclosed in Note 22 to the Standalone Financial Statements the MAT credit is recognised as a deferred tax asset. The utilisation of this asset will be through offsetting it when the Company pays taxes under the provision of Income Tax Act 1961. The Company is required to reassess recognition of MAT credit asset at each reporting date. In respect of MAT credit assets we assessed recognition and measurement by performing the following procedures:
• Evaluating the design implementation and operating effectiveness of the relevant internal controls over recognition and measurement of MAT credit assets and underlying data;
The Company has recognised MAT credit assets based on the probability of income tax payable on future taxable profits against which such MAT credit assets can be offset before they expire. The recognition is based on the projected profitability. This is determined based on approved business plans. • Obtaining the approved business plans projected profitability statements;
Recognition and measurement of such deferred tax assets has been identified as a key audit matter because the assessment process involves significant judgement regarding the forecasts of future income tax. The realisation of these assets will be through such income tax within the time limits available under the applicable Income tax laws. The assessment process is based on assumptions affected by expected future market or economic conditions. • Challenging the assumptions used regarding future business plans and taxable profit in light of fiscal developments current economic environment in light of COVID-19 related situation and prior performance in determining the recoverability of MAT credit assets recognised within the period available under applicable Income tax laws;
• Performing sensitivity analysis;
• Testing the computation of amounts recognised as deferred tax assets on MAT credit;
• Focusing on the disclosures on MAT credit assets and assumptions used.

Information Other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

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 and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error. Inpreparing the standalone financial statements the Management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the 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 judgement 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 misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going 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's report tothe related disclosures in the standalone 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 conditions maycause the Company to cease to continue as a 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 statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. (A) 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31 stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31 st March 2021on its financial position in its standalone financial statements-Refer Note 41 to thestandalone financial statements;

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

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

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8th November 2016 to 30thDecember 2016 have not been made in these financial statements since they do not pertainto the financial year ended 31st March 2021.

(C) With respect to the matter to be included in the Auditors' Report under Section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W/W-100022
Jamil Khatri
Partner
Mumbai Membership Number: 102527
18th May 2021 UDIN: 21102527AAAAAQ5110

Annexure - A to the Independent Auditors' Report

31st March 2021 (Referred to in our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified by the management in a phased manner over a period ofthree years. In accordance with this programme certain fixed assets were verified duringthe year and no material discrepancies were noticed on such verification. In our opinionthis periodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed / transfer deed /conveyance deed provided to us we report that the title deeds of immovable propertiesare held in the name of the Company. Immovable properties of land and building whose titlehave been pledged as security for loans are held in the name of the Company. In respect ofimmovable properties of land and buildings that have been taken on lease and disclosed asfixed asset (right-of-use assets) in the financial statements the lease agreements are inthe name of the Company where the Company is the lessee in the agreement.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of such verification is reasonable. The discrepancies noticedon verification between the physical stocks and the book records were not material andhave been appropriately dealt with in the books of account.

(iii) In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Act. Accordingly paragraphs 3 (iii) (a) (b) and (c) of the Order are notapplicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any guarantees or security to the partiescovered under Section 185 of the Act during the year. The Company has complied with theprovisions of Section 186 of the Act in respect of investments made or guaranteesprovided to the parties covered under Section 186 of the Act. The Company has not grantedany loans or provided any security to the parties covered under Section 186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public in accordance with the provisions ofsection 73 to 76 or any other relevant provisions of the Act and the rules framedthereunder. Accordingly paragraph 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the records maintained by the Company pursuant to therules prescribed by the Central Government for maintenance of cost records undersub-section 1 of Section 148 of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the records with a view to determine whether they are accurate orcomplete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income-Tax Goods and Service Tax Duty of Customs Cess and other materialstatutory dues as applicable have been generally regularly deposited during the year bythe Company with the appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income-Tax Goods and Service Tax Duty of Customs Cess andother material statutory dues were in arrears as at 31st March 2021 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome-tax Sales Tax Service Tax Goods and Service Tax Duty of customs Duty ofExcise Value Added Tax as at 31st March 2021 which have not been deposited with theappropriate authorities on account of any dispute other than those mentioned in EnclosureI to this report. (viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of dues to its bankers financialinstitutions government and its debenture holders.

(ix) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not raised any money by way ofinitial public offer further public offer (including debt instruments) during the year.In our opinion and according to information and explanations given to us the term loanshave been applied by the Company during the year for the purposes for which they wereraised.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers year nor havewe been informed of any such case by the management.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company as prescribed under Section 406 of the Act. Accordinglyparagraph 3(xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with the provisions of Sections 177 and 188 of the Act where applicable. Thedetails of such related party transactions have been disclosed in the standaloneapplicable Indian Accounting Standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W/W-100022
Jamil Khatri
Partner
Mumbai Membership Number: 102527
18th May 2021 UDIN: 21102527AAAAAQ5110

Enclosure I

Name of the Statute Nature of Dues Forum where dispute is pending Period to which the amount relates Amount demanded Amount unpaid
(Rs in crores) (Rs in crores)
The Central Excise Act 1944 Demand of Excise duty / Interest / Penalty Additional Commissioner of CGST & Central Excise- Gandhinagar 2008-09 & 2009-10 0.17 0.16
The Central Excise Act 1944 Cenvat Credit / Input service tax/ demand of duty & penalty CESTAT-Kolkata 2011-12 2.58 2.53
Finance Act 1994 Demand of Service Tax / Interest/ Penalty CESTAT-Ahmedabad 2013-14 to 2015-16 6.19 6.19
Finance Act 1994 Demand of Service Tax / Interest/ Penalty Supreme Court of India 2007-08 to June 2012 57.50 57.50
Finance Act 1994 Demand of Service Tax / Interest/ Penalty Commissioner of CGST & Central Excise- Ahmedabad July -2012 to Sept 2013 October -2013 to March -2015 10.73 10.73
The Central Excise Act 1944 Cenvat Credit/ Input service tax / demand of duty & penalty CESTAT-Ahmedabad 2012-13 and 2013-14 11.79 11.49
The Central Goods & Services Tax Act 2017 Interest on Input tax credit refund recovery Gujarat High Court July & August 2017 3.07 3.07
The Central Excise Act 1944 Cenvat Credit / Input service tax/ demand of duty & penalty Dy. Commr. of CGST & Central ExciseKalol 2005-06 and 2013-14 & 2014-15 0.22 0.21
The Central Excise Act 1944 Cenvat Credit / Input service tax/ demand of duty & penalty CESTAT-Chandigarh 2015-16 0.21 0.20
The Central Excise Act 1944 Cenvat Credit / Interest & penalty Joint Commissioner of CGST-Audit Durgapur FY 2016-17 to June-2017 3.64 3.47
The Central Goods & Services Tax Act 2017 Input Tax Credit Joint Commissioner (Appeals)CGST FY 2017-18 0.63 0.60
Madhya Pradesh Vat Act 2002 Demand of Tax Assistant Commissioner of Commercial Tax Madhya Pradesh 2014-15 2015-16 and 2016-17 5.55 5.55
Uttar Pradesh Trade Tax Act 1948 Demand of Tax Joint Commissioner Commercial Tax Uttar Pradesh 2017-18 0.60 0.60
Bihar Value Added Tax Act 2005 Demand of Tax Assistant Commissioner of Commercial Tax Bihar 2015-16 0.69 0.69
Madhya Pradesh Vat Act 2002 Demand of Entry Tax Assistant Commissioner of Commercial Tax Madhya Pradesh 2015-16 and 2016-17 14.66 12.70
Uttar Pradesh Trade Tax Act 1948 Demand of Tax Joint Commissioner Commercial Tax Uttar Pradesh 2003-04 and 2005-06 0.41 0.03
Uttar Pradesh Trade Tax Act 1948 Demand of Tax Joint Commissioner Commercial Tax Uttar Pradesh 2017-18 0.06 0.06
West Bengal Value Added Tax Act 2003 Demand of Tax West Bengal Taxation Tribunal 2015-16 1.20 1.20
Andhra Pradesh Value Added Tax Act 2005 Demand of Tax Commercial Tax Officer 2015-16 0.08 0.08
Kerala Value Added Tax Act 2003 Demand of Tax Asst Commissioner of Commercial Tax 2007-08 0.16 0.08

Annexure - B to the Independent Auditors' Report

on Standalone financial statements of Torrent Pharmaceuticals Limited for the yearended 31 st March 2021

Report on the Internal Financial Controls with reference to the aforesaid standalonefinancial statements under Clause (i) of sub-Section 3 of Section 143 of the CompaniesAct 2013.

(Referred to in paragraph 1(A)(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to financial statementsof Torrent Pharmaceuticals Limited (‘the Company') as of 31st March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31st March 2021 based on the internal financial controlswith reference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (‘the Act').

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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 financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the standalonefinancial statements.

Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to standalone financial statements to future periods are subject to the riskthat the internal financial controls with reference to standalone financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W/W-100022
Jamil Khatri
Partner
Mumbai Membership Number: 102527
18th May 2021 UDIN: 21102527AAAAAQ5110

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