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UltraTech Cement Ltd.

BSE: 532538 Sector: Industrials
NSE: ULTRACEMCO ISIN Code: INE481G01011
BSE 00:00 | 10 Jul 3800.45 -41.70
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NSE 00:00 | 10 Jul 3798.50 -44.95
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OPEN 3842.15
PREVIOUS CLOSE 3842.15
VOLUME 49257
52-Week high 4753.35
52-Week low 2913.15
P/E 20.11
Mkt Cap.(Rs cr) 109,692
Buy Price 3800.45
Buy Qty 29.00
Sell Price 3805.00
Sell Qty 3.00
OPEN 3842.15
CLOSE 3842.15
VOLUME 49257
52-Week high 4753.35
52-Week low 2913.15
P/E 20.11
Mkt Cap.(Rs cr) 109,692
Buy Price 3800.45
Buy Qty 29.00
Sell Price 3805.00
Sell Qty 3.00

UltraTech Cement Ltd. (ULTRACEMCO) - Auditors Report

Company auditors report

To the Members of

UltraTech Cement Limited

Report on the Audit of the standalone Ind AS Financial Statements Opinion

We have audited the standalone Ind AS financial statements of UltraTech Cement Limited(‘the Company') which comprise the balance sheet as at 31 March 2019 and thestatement of profit and loss (including other comprehensive income) the statement ofchanges in equity and the cash flow statement for the year then ended and notes to thestandalone Ind AS financial statements including a summary of the significant accountingpolicies and other explanatory information (herein after referred to as ‘standaloneInd AS financial statements').

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 (‘the Act') in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at 31 March 2019 its profit (includingother comprehensive income) changes in equity and its cash flows for the year ended onthat 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 Ind ASfinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone Ind AS financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter

We draw attention to Note 32 (b) of the standalone Ind AS financial statements whichdescribes the following matters:-

(a) In terms of order dated 31 August 2016 the Competition Commission of India(‘CCI') has imposed penalty of Rs.1175.49 crore for alleged contravention of theprovisions of the Competition Act 2002 by the Company. The Company had filed an appealagainst CCI Order before the Competition Appellate Tribunal (‘COMPAT'). Consequent toreconstitution of Tribunals by the Government this matter was transferred to the NationalCompany Law Appellate Tribunal (‘NCLAT'). NCLAT completed its hearing on the matterand disallowed the appeal filed by the Company against the CCI order. Aggrieved by theorder of NCLAT the Company has filed an appeal before the Honorable Supreme Court whichhas granted a stay against the NCLAT order on the condition that the Company deposits 10%of the penalty amounting to Rs.117.55 crore which has been deposited. Based on a legalopinion the Company believes that it has a good case in this matter. Considering theuncertainty relating to the outcome of this matter no provision has been considered inthe books of account. Our opinion is not modified in respect of this matter.

(b) In terms of order dated 19 January 2017 the CCI had imposed penalty of Rs.68.30crore pursuant to a reference filed by the Government of Haryana for alleged contraventionof the provisions of the Competition Act 2002 in August 2012 by the Company. The Companyhad filed an appeal before COMPAT and received the stay order dated 10 April 2017.Consequent to reconstitution of Tribunals by the Government this matter was transferredto the NCLAT for which hearing is pending. Based on legal opinion the Company believesthat it has a good case in this matter. Considering the uncertainty relating to theoutcome of this matter no provision has been considered in the books of account. 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 of the currentyear. These matters were addressed in the context of our audit of the standalone Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Description of Key Audit Matters:

Key Audit Matters How the matter was addressed in our audit
Revenue recognition – Discounts incentives rebates etc. Our procedures included:
Revenue is measured net of discounts incentives rebates etc. earned by customers on the Company's sales. Assessing the appropriateness of the Company's accounting policies relating to discounts incentives rebates etc by comparing with applicable accounting standards.
Due to the Company's presence across different marketing regions within the country and the competitive business environment the estimation of the various types of discounts incentives and rebate schemes to be recognised based on sales made during the year is material and considered to be complex and judgmental. Assessing the design and testing the implementation and operating effectiveness of Company's internal controls over the approvals calculation provision and disbursement of discounts incentives and rebates.
Therefore there is a risk of revenue being misstated as a result of faulty estimations over discounts incentives and rebates. Obtaining management's calculations for discounts incentives and rebates accruals under applicable schemes on a sample basis and comparing the accruals made with the approved schemes.
Given the judgement required to estimate the amount of provisions this is a key audit matter. Obtaining and inspecting on a sample basis supporting documentation for discounts incentives and rebates recorded and disbursed during the year as well as credit notes issued after the year end date to determine whether these were recorded appropriately.
Comparing the historical trend of payments and reversal of discounts incentives and rebates to provisions made to determine the appropriateness of current year provisions.
Examining manual journals posted to discounts rebates and incentives to identify unusual or irregular items.
Regulations - Litigations and claims Our procedures included:
The Company operates in various States within India exposing it to a variety of different Central and State/Local laws regulations and interpretations thereof. In this regulatory environment there is an inherent risk of litigations and claims. Review the outstanding litigations against the Company for consistency with the previous years. Enquire and obtain explanations for movement during the year.
Consequently provisions and contingent liability disclosures may arise from direct and indirect tax proceedings legal proceedings including regulatory and other government/department proceedings as well as investigations by authorities and commercial claims. Reading the latest correspondence between the Company and the various tax/legal authorities and review of correspondence with / legal opinions obtained by the management from external legal advisors where applicable for significant matters.
At 31 March 2019 the Company's contingent liabilities were Rs. 4646.73 crore (refer note 32 to the standalone Ind AS financial statements). Discussing the status of significant litigation with the Company's in-house Legal Counsel and other senior management personnel and assessing their responses.
Management applies significant judgement in estimating the likelihood of the future outcome in each case when considering whether and how much to provide or in determining the required disclosure for the potential exposure of each matter. This is due to the highly complex nature and magnitude of the legal matters involved along with the fact that resolution of tax and legal proceedings may span over multiple years and may involve protracted negotiation or litigation. On sample basis examine the Company's legal expenses and read the minutes of the board meetings in order to ensure all cases have been identified.
With respect to tax matters involving our tax specialists and discussing with the Company's tax officers their views and strategies on significant cases as well as the related technical grounds relating to their conclusions based on applicable tax laws.
These estimates could change substantially over time as new facts emerge and each legal case progresses. Assessing the decisions and rationale for provisions held or for decisions not to record provisions or make disclosures.
Given the inherent complexity and magnitude of potential exposures across the Company and the judgement necessary to estimate the amount of provisions required or to determine required disclosures this is a key audit matter. For those matters where management concluded that no provisions should be recorded considering the adequacy and completeness of the Company's disclosures.

Other Information

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 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 theother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Ind AS Financial Statements

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 Ind ASfinancial statements that give a true and fair view of the state of affairs profit andother comprehensive income changes in equity and cash flows 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. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the 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 designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone Ind AS financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the standalone Ind AS financial statements management and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto 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 Ind AS financial statements

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

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

We also:

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

Obtain an understanding of internal control relevant to the audit in order 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 with reference to financial statements in place andthe operating effectiveness of such 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 standalone Ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a 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 deficiencies in internal control that we identify during our audit.

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditors' report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As r equired 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 the Orderto the extent applicable.

(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 balance Sheet the statement of profit and loss (including other comprehensiveincome) the statement of changes in equity and the cash flow statement dealt with by thisreport are in agreement with the books of account;

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theInd AS specified under Section 133 of the Act;

e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164(2) of the Act; and

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 March 2019 onits financial position in its standalone Ind AS financial statements - Refer Note 32 tothe standalone Ind 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 47 to the standalone Ind AS financial statements;

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

iv The disclosures in the standalone Ind AS financial statements regarding holdings aswell as dealings. in specified bank notes during the period from 8 November 2016 to 30December 2016 have not been made in these financial statements since they do not pertainto the financial year ended 31 March 2019.

(C With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act in our) opinion and according to the information and explanationsgiven to us the remuneration paid by the Company to its directors during the current yearis in accordance with the provisions of Section 197 of the Act. The remuneration paid toany director is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

For B S R & Co. LLP For Khimji Kunverji & Co.
Chartered Accountants Chartered Accountants
Firm's Registration No: 101248W/W-100022 Firm's Registration No: 105146W
Vijay Mathur Ketan Vikamsey
Partner Partner
Membership No: 046476 Membership No: 044000
Mumbai Mumbai
24 April 2019 24 April 2019

Annexure A to the Independent Auditors' Report – 31 March 2019

(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 all fixed assets aReverified in a phased manner over a period of three years. In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets. Pursuant to the programme certain fixedassets were physically verified by the Management during the year. In our opinion andaccording to the information and explanations given to us no material discrepancies werenoticed on such verification.

(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company except for the following which are not heldin the name of the Company:

Particulars Leasehold Land Freehold Land Buildings
Gross block as at 31 March 2019 (Rs. in Crore) 696.88 2125.24 43.34
Net block as at 31 March 2019 (Rs. in Crore) 627.65 2125.24 33.35
Total number of cases 424 2890 48

ii. The inventory except for goods-in-transit and stocks lying with third parties hasbeen physically verified by the management at reasonable intervals during the year. In ouropinion the frequency of such verification is reasonable. For stocks lying with thirdparties at the year-end written confirmations have been obtained and in respect ofgoods-in-transit subsequent goods receipts have been verified or confirmations have beenobtained from the parties. The discrepancies noticed on verification between the physicalstocks and the book records were not material.

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 paragraph 3(iii) of the Order is not applicable to theCompany.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act with respectto the loans given investments made guarantees given and security provided.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public during the year in terms of theprovisions of Sections 73 to 76 or any other relevant provisions of the Act and the rulesframed there under. Accordingly paragraph 3(v) of the Order is not applicable to theCompany.

vi. W e have broadly reviewed the books of account maintained by the Company asspecified under Section 148(1) of the Act for maintenance of cost records in respect ofproducts manufactured by the Company 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 cost records with a view to determine whether they areaccurate or complete.

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 have been regularly deposited during the year by the Company with theappropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-tax Goods andService Tax Duty of Customs Cess and other material statutory dues were in arrears as at31 March 2019 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company details of dues of Income-tax Sales-taxService tax Duty of Customs Duty of Excise and Value added tax which have not beendeposited as at 31 March 2019 on account of disputes are given below:

Name of the Statute Nature of the Dues Forum where dispute is pending Period to which amount relates (Assessment Year) Amount* Rs. in Crore)
Sales Tax/ Value Added Tax (VAT) Sales Tax VAT Interest and Penalty Supreme Court 2000 to 2006 214.61
High Court 1988 to 2017 20.00
Tribunal(s) 1985 to 2017 136.68
Appellate Authorities 1990 to 2016 197.95
Assessing Officers 1997 to 2014 4.42
Customs Act 1962 Customs Duty Interest and Penalty High Court 2002 to 2006 48.86
Tribunal(s) 2000 to 2014 206.89
Appellate Authorities 2003 to 2015 0.11
Central Excise Act 1944 Excise Duty Interest and Penalty Supreme Court 1999 to 2011 98.97
High Court 1998 to 2013 71.27
Tribunal(s) 1994 to 2017 989.93
Appellate Authorities 2003 to 2017 39.56
Finance Act 1994 Service Tax Interest and Penalty Supreme Court 2004 to 2012 20.80
High Court 2004 to 2010 19.00
Tribunal(s) 2005 to 2019 486.23
Appellate Authorities 2006 to 2017 34.56
Income Tax Act 1961 Income Tax Interest and Penalty High Court 2001 to 2006 1.32

* net of amounts paid under protest.

viii. According to the information and explanations given to us and based on therecords of the Company the Company has not defaulted in the repayment of loans orborrowings to financial institutions banks government and dues to debenture holders.

ix. According to the information and explanations given to us the term loans have beenapplied by the Company during the year for the purposes for which they were obtained. TheCompany did not raise money by way of initial public offer or further public offer(including debt instruments) during the year.

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi. According to the information and explanations give 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. Accordingly paragraph 3(xii) of the Order is notapplicable 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 Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone Ind AS financial statements as requiredby the applicable 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 non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable to the Company.

xvi. According to the information and explanations given to us the Company is notrequired to be registered under Section 45 - IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP For Khimji Kunverji & Co.
Chartered Accountants Chartered Accountants
Firm's Registration No: 101248W/W-100022 Firm's Registration No: 105146W
Vijay Mathur Ketan Vikamsey
Partner Partner
Membership No: 046476 Membership No: 044000
Mumbai Mumbai
24 April 2019 24 April 2019

Annexure B to the Independent Auditors' Report - 31 March 2019

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

Opinion

In conjunction with our audit of the standalone Ind AS financial statements of theCompany as of and for the year ended 31 March 2019we have audited the internal financialcontrols with reference to standalone Ind AS financial statements of UltraTech CementLimited (‘the Company') as of that date.

In our opinion the Company has in all material respects adequate internal financialcontrols system with reference to standalone Ind AS financial statements and such internalfinancial controls were operating effectively as at 31 March 2019 based on the internalfinancial controls with reference to standalone Ind AS financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants 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 standalone Ind AS financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as ‘the Act').

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone Ind AS financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone Ind AS financial statements.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone Ind AS financial statements wereestablished and maintained and whether such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to standalone Ind AS financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone Ind AS financial statements included obtaining anunderstanding of such internal financial controls assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thestandalone Ind AS 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 standalone Ind AS financial statements.

Meaning of Internal Financial controls with Reference to standalone Ind AS financialstatements

A company's internal financial controls with reference to standalone Ind AS financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone Ind AS financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial controls with reference to standalone Ind AS financial statementsinclude those policies and procedures that (1) pertain to the maintenance of records thatin reasonable detail accurately and fairly reflect the transactions and dispositions ofthe assets of the company; (2) provide reasonable assurance that transactions are recordedas necessary to permit preparation of standalone Ind AS financial statements in accordancewith generally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the standalone Ind AS financial statements.

Inherent Limitations of Internal Financial controls with Reference to standalone Ind ASfinancial statements

Because of the inherent limitations of internal financial controls with reference tostandalone Ind AS 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 Ind AS financial statements to future periods aresubject to the risk that the internal financial controls with reference to standalone IndAS financial statements may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

For B S R & Co. LLP For Khimji Kunverji & Co.
Chartered Accountants Chartered Accountants
Firm's Registration No: 101248W/W-100022 Firm's Registration No: 105146W
Vijay Mathur Ketan Vikamsey
Partner Partner
Membership No: 046476 Membership No: 044000
Mumbai Mumbai
24 April 2019 24 April 2019