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AUDITOR'S REPORT

GE T&D India Ltd.

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Market Cap. (₹) 3795.89 Cr. P/BV 2.66 Book Value (₹) 55.77
52 Week High/Low (₹) 333/138 FV/ML 2/1 P/E(X) 17.85
Bookclosure 24/07/2019 EPS (₹) 8.31 Div Yield (%) 1.21
Year End :2019-03 

Independent Auditor's Report

To the Members of GE T&D India Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of GE T&D India Limited ("the Company"), which comprise the balance sheet as at 31 March 2019, the statement of profit and loss (including other comprehensive income), statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2019, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our 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 ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Description of Key Audit Matter

The key audit matter

How the matter was addressed in our audit

Revenue recognition and related receivables

Our audit procedures included the following:

A significant portion of Company's business comprises long-term projects, including construction-type and fixed price projects. Revenue from these contracts is recognized in accordance with the principles laid down in Ind AS 115, Revenue from Contracts with Customers, and as detailed in "significant accounting policies" in the financial statements.

Obtaining an understanding of the processes adopted by management to carry out accounting for revenue from various projects and processes implemented in response to Ind AS 115 and review of the analysis carried out by management.

Inquiries of management to understand the process put in place for accounting for such contracts from initiation through recording. Obtaining an understanding of the Company's methods, processes and control mechanisms for project management in the bid and execution phase of contracts.

The first time application of Ind AS 115 with effect from 1 April 2018 was of relevance for our audit as it required the Company-wide assessment of contracts in relation to the new accounting criteria.

In accordance with this guidance, the Company classifies its various contracts with customers, whether revenue should be recognized at "point in time" or "over the time" basis.

Testing of key controls (both design and operating effectiveness) over project accounting from initiation to recording and evaluation of subsequent impact on readability of receivables .

There are various areas involving complexities, judgements and estimates involved in accounting for revenue recognized on "over the time" basis, including:

Selecting contracts by applying sampling methodology to various categories of contracts, considering size of contracts, quantum of changes in margins etc. For the selected contracts:

The key audit matter

How the matter was addressed in our audit

Evaluation of impact of application of new accounting standard, Ind AS 115 on Company's revenue recognition policy

Reading and analysing management's assessment of distinct performance obligations

Management assessment of alternative use of the products being manufactured which in turn determines the timing of commencement of revenue recognition

Evaluating management's estimates and assumptions (estimated contract revenue/ costs, risk provisions, contract variation claims etc) through discussions and inquiries with management including reading related documents evidencing management assessment

Estimation of total contract costs at inception and remaining costs to completion, which is a critical factor in measuring progress of a contract and amounts of revenue to be recognized

Review of contracts and significant terms and conditions, including termination rights, terms relating to penalties for delay and breach of contract as well as liquidated damages.

Assessment of various risks emanating from operational delays, contract terms, changes in estimations, technical, legal, external environment etc. This requires the Company to estimate various costs to capture such risks, including liquidated damages and warranties.

Inquiring and challenging management (project managers) on various aspects of contracts such as performance/ progress, key estimates and assumptions adopted in the forecast of contract revenue and contract costs, including estimated costs to completion, reasons for deviations, the recognition of variation orders, the adequacy of contingency provisions, assessment of potential liquidated and ascertained damages and assessment on probabilities that contract risks will materialize.

Accounting for variations and claims of / from customers, including timing of recognition.

Revenues, total estimated contract costs and resultant margin recognition may deviate significantly from original estimates based on new knowledge about cost overruns and changes in project scope over the terms of a contract.

In view of above, we determined this area to an area involving significant risk, an area of audit focus, and accordingly a key audit matter.

Obtaining and reading contract agreements and subcontracts, correspondence with customers regarding contract variations and considering historical outcomes for similar contracts and industry norms;

Obtaining a detailed breakdown of the total estimated costs to completion for all contracts in progress during the year, and comparing, on a sample basis, actual costs incurred at the reporting date and cost estimates with agreements with subcontractors and suppliers and other documentation referred to by management in its assessment of the estimated costs to completion.

Challenging the assumptions and critical judgements made by management which impacted their estimations of the liquidated and ascertained damages assessments by reading contractual key terms and conditions and periodic progress reports.

Performing a retrospective review for contracts completed during the current year by comparing the final outcome of the contracts with previous estimates made for those contracts to assess the reliability of the management's forecasting process.

Obtaining a listing of all contracts with details of contract revenue and total estimated costs to assess the need for making provision for loss contracts.

Obtaining and testing computations on a sample basis for unbilled revenues recognized by management, as a difference between revenues recognized and billings to customers in accordance with the contract.

Testing cost of sales by applying sampling methodology, including related balances such as Work-in-progress, trade receivables etc.

The key audit matter

How the matter was addressed in our audit

Effective 1 April 2018, the Company adopted Ind AS 115, "Revenue from contracts with customers" using the cumulative effect approach, as the transitional provision option available to the Company. The Company also assessed the revenue recognition method in respect of measuring percentage of completion for applicable products/ services projects. The key changes in accounting policies included non-discounting of retention money as it is considered to ensure Company's obligation rather than provision of finance to the customer and change in method of measuring percentage of completion, measured now by segmented portions of a contract, i.e. contract milestones achieved to actual costs incurred. As a result, the cumulative effect of Rs 817.1 million (net of tax impact of Rs 424.1 million) has been recognized as addition to retained earnings as at 1 April 2018.

As informed to us, it is impracticable to determine the adjustments/ impact of the above changes on the comparatives. Accordingly, the comparatives have not been retrospectively adjusted, i.e. it is presented, as per previously reported results in previous year.

Recoverability of trade receivables

Our audit procedures included the following:

Trade receivables, including retention money with customers, form a significant part of the financial statements.

Customer contracts typically involve time consuming and complex conditions around closure of contracts, including technical acceptances. Also, customers pay only on the basis of ongoing performance quality obligations. The above factors generally lead to longer and significant time for realization of receivables.

Obtaining an understanding of the processes implemented by management to estimate impairment provision against trade receivables

Testing of key controls (both design and operating effectiveness) over management's estimate of impairment loss

Obtaining and testing accuracy of ageing of trade receivables on a sample basis

As a result of above, management assessment of readability of trade receivables, involves critical evaluation of all factors impacting realisability, including impact of external environment such as capability of customers to pay. The Company's projects may take a significantly longer period of time to satisfy various technical and performance obligations and related customer complaints. The Company takes these considerations to assess realisability of its receivables.

Management makes an impairment allowance for trade receivables on the basis of assessment of realisability of specific customers and on the basis of expected credit loss model for the balance category of customers in accordance with Ind AS 109, Financial Instruments. For the purposes of impairment assessment, significant judgements and assumptions are made, including assessing credit risk, timing and amount of realization, etc.

In view of above, we determined this area to an area of audit focus, and accordingly a key audit matter.

Review of the model adopted by management to estimate the expected credit loss and testing related computations. Inquiring and discussing with management the various judgements and estimates made in the model.

Obtaining and discussing management assessment of impairment for specific customer balances and understanding reasons for the determination. Corroborating our understanding with externally available information and internally available information such as customer correspondences, management analysis notes etc

The key audit matter

How the matter was addressed in our audit

Provision for taxes and litigations

Our audit procedures included the following:

The Company carries a significant amount of provision towards various taxes and litigations, as a result of applicability of various laws and regulations relating to sales tax, goods and service tax, service tax, excise, customs etc (either past or present).

Obtaining an understanding of the processes implemented by management to estimate provision for various tax and other litigations

Testing of key controls (both design and operating effectiveness) over management's estimate of provisions

The above accruals require the management to make judgements and estimates. Determining the impact and likely outcome of any litigation matter requires judgement. The key requirements include sound judgement process, understanding of related laws and regulations, awareness of claims etc.

In particular, this affects the measurement and completeness of uncertain tax positions/ provision for litigations, and the related recoverability of deferred tax assets.

Selecting a sample of all accruals for the purposes of evaluation as mentioned below. Inquiring with management any other litigations/ tax laws not considered by management to arrive at their evaluation.

Assessing adequacy and management consideration of various litigations/ regulations on the basis of knowledge obtained by us through audit procedures carried out in other areas.

Due to above mentioned factors, we have determined this to be a key audit matter.

Involving subject matter experts to evaluate management estimates on the basis of the facts of the each case, internal evaluations, legal precedence, external legal opinions, if any.

Analysing and challenging various assumptions used by management to determine accruals based on our knowledge and experiences of the application of local legislations by the relevant authorities and courts.

Evaluate compliance with the relevant accounting guidance on valuation of above-mentioned provisions

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

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

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the state of affairs, profit and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management and Board of Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

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

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

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design 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 has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

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

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the 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's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be 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 the Order, to the extent applicable.

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 best of 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 the Company so far as it appears from our examination of those books.

c) The balance sheet, the statement of profit and loss (including other comprehensive income), the statement of changes in equity and the statement of cash flows dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Ind AS specified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31 March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of Section 164(2) of the Act.

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

(B) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 on its financial position in its financial statements - Refer Note 39 to the financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts- Refer Note 43 to the financial statements.

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

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

(C) With respect to the matter to be included in the Auditors' Report under section 197(16):

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

For B S R & Associates LLP

Chartered Accountants

ICAI Firm registration number: 116231W/W-100024

Manish Gupta

Place: Noida Partner

Date : 22 May 2019 Membership No.: 095037

ANNEXURE A referred in the Independent Auditor's Report to the Members of GE T&D India Limited on the financial statements for the year ended 31 March 2019

(i) (a) According to the information and explanations given to us, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, the fixed assets are physically verified by the management in accordance with a phased programme designed to cover all items of fixed assets over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and nature of its fixed assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year. As informed to us, no material discrepancies were observed on such verification.

(c) According the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of the immovable properties are held in the name of the Company.

(ii) According to the information and explanations given to us, the inventories (excluding stocks with third parties and goods-in-transit) have been physically verified during the year by the management. In respect of inventories lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. Further, as informed, the discrepancies noticed on verification between the physical inventory and the book records were not material.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraph 3(iii) of the Order is not applicable.

(iv) According to the information and explanations given to us, the Company has not given any loans, or made any investments, or provided any guarantee, or security as specified under Section 185 and 186 of the Companies Act, 2013. Accordingly, paragraph 3(iv) of the Order is not applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposits covered under Section 73 to 76 of the Act.

(vi) We have broadly reviewed the books of account maintained by the Company, pursuant to the rules made by the Central Government, the maintenance of cost records has been prescribed under sub section (1) of Section 148 of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of such records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees' State Insurance, Income tax, Cess, Goods and Service Tax and any other material statutory dues, to the extent applicable, have generally been regularly deposited with the appropriate authorities during the year.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income tax, Cess, Goods and Service Tax and other material statutory dues, to the extent applicable, were in arrears as at 31 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 the records of the Company examined by us, there are no dues of Income-tax, Sales-tax, Service tax, Duty of Customs, Duty of Excise and Value Added Tax which have not been deposited with the appropriate authorities on account of any dispute, except as mentioned below:-

Name of the Statue

Nature of dues

Amount of demand* (Rs millions)

Amount deposited against the demand (Rs millions)

Period to which the amount relates

Forum where dispute is pending

The Central Excise Act, 1944

Excise duty

16.3

0.6

1990-91,1996-97, 1998-99, 2003-04, 2008-09,2015-16, 2016-17 & 2018-19

Appellate Authority- upto Commissioner level

64.5

4.1

2009-10 to 2016-17 & 2018-19

Central Excise and Service Tax Appellate Tribunal

0.2

0.2

2008-09

Madras High court

Custom Act, 1962

Custom duty

439.9

-

2014-15

Madras High court

2.8

2008-09

Custom Excise and Service Tax Appellate Tribunal

0.1

2014-15

Appellate Authority- Upto Commissioner Level

The Finance Act, 1994

Service tax

2.1

0.4

2009-10, 2016-17 & 2018-19

High Court

62.7

0.9

2015-16, 2016-17 & 2018-19

Upto Commissioner Level

277.7

167.3

2008-09, 2010-11 to 2013-14, 2015-16 to 2017-18

Central Excise and Service Tax Appellate Tribunal

Central Sales Tax Act and Local Sales Tax Acts (including works contract tax)

Sales tax

6,923.7

1,301.2

1988 -89 to 1990-91, 1992-93,1993-94, 1998-99, 2000-01 to 2017-18

Appellate Authority- upto Commissioner level

211.8

205.6

1986-87, 2008-09 to 2012-13

Sales Tax Appellate Tribunal

Income Tax Act 1961

Income Tax

26.8

26.6

2006-07

Income Tax Appellate Tribunal

75.5

34.2

2007-08

100.8

-

2008-09

868.6

71.6

2009-10

573.8

61.6

2010-11

454.6

35.0

2011-12

Commissioner of Income Tax (Appeals)

277.3

32.5

2012-13

407.6

38.0

2013-14

218.1

15.0

2015-16

* Amount as per demand orders including interest and penalty, wherever indicated in the order

(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to any banks. Further, the Company does not have any loans or borrowings from any financial institution or government and the Company does not have any debentures issued / outstanding at any time during the year.

(ix) According to the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instrument) and any term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the managerial remuneration has been paid or provided by the Company in accordance with the provisions of Section 197 read for the period under audit with Schedule V to the Act.

(xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to information and explanations given to us and on the basis of our examination of the records of the Company, all transactions with the related parties are in compliance with

Section 177 and 188 of the Act, where applicable, and the details have been disclosed in the financial statements, as required by the applicable accounting standard.

(xiv) According to information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable.

(xv) According to information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) According to information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

For B S R & Associates LLP

Chartered Accountants

ICAI Firm registration number: 116231W/W-100024

Manish Gupta

Place: Noida Partner

Date : 22 May 2019 Membership No.: 095037

ANNEXURE B to the Independent Auditor's report on the financial statements of GE T&D India Limited for the year ended 31 March 2019.

Report on the internal financial controls with reference to the aforesaid financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013

(Referred to in paragraph 2(f) under' Report on Other Legal and Regulatory Requirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to financial statements of GET&D India Limited ("the Company") as of 31 March 2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2019, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued 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 establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (hereinafter referred to as "the Act").

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note

and the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls with reference 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 a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial controls with reference to financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Inherent Limitations of Internal Financial controls with Reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected.

For B S R & Associates LLP

Chartered Accountants

ICAI Firm registration number: 116231W/W-100024

Manish Gupta

Place: Noida Partner

Date : 22 May 2019 Membership No.: 095037

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