air india charters ltd Auditors report

To the Members of Air India Express Limited

Report on the Audit of Financial Statements

1. Qualified Opinion

We have audited the accompanying Ind AS financial statements of Air India Express Limited ("the Company") which comprises the Balance Sheet as at 31^st March, 2020, 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 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, except for the effects/possible effects of the matters described in the Basis for Qualified Opinion section of our report, the aforesaid Ind AS financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (Ind AS) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2020, and profit including (including other comprehensive income), the changes in equity and its cash flows for the year ended on that date.

2. Basis for Qualified Opinion

In respect of non-compliance with certain provisions of the Act to the extent stated below:

i. Non-Appointment of Independent Directors as required under the provisions of Section 149(4) of the Companies Act,2013 read with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 for the period from 1st April,2019 till 26th March,2020 and consequent noncompliance relating to composition of Corporate Social Responsibility Committee under section 135(1); Audit Committee under section 177 (2) and Nomination and Remuneration Committee under section 178 of the Companies Act,2013. Upon redemption of Listed Unsecured Nonconvertible Debentures on 26th March, 2020, the status of the Company has changed to Unlisted Public Company being a wholly owned subsidiary of a Public Company, covered under the exemption granted under Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

ii. Non-appointment of woman director for the period 6^th November, 2018 to 19th January, 2020 as required under section 149(1) of the Companies Act, 2013 read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

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

3. Emphasis of Matter

We invite attention to the following:

i. In respect of non-compliance with Regulation 52 of Listing Obligation and Disclosures Requirements (Amendment) Regulation, 2017 (LODR) regarding delay in submission of Half yearly Financial Results to Bombay Stock Exchange.

ii. Note No. 47(B) regarding penal interest amounting to Rs. 832.47 Million for delayed payment of Guarantee Commission to Government of India.

iii. Non-filling of form 3CEB from F. Y. 2012-13 to F.Y. 2015-16 (Refer note no. 57).

iv. Flight Interruption Manifest and Code-Share revenue are considered as "Interline Transactions" and hence, GST liability in respect of the same is not charged and paid by the Company for the reason refer to in note no. 40.

v. Reconciliation / rectification: The Company has made provision for repairs expenditure of Rs. 293.84 Million as referred to in note no. 41(d).

vi. The Company has not deducted income tax at source while making provision for expenses but has deducted the same and paid to the government at the time of making payment of expenses, the impact of such non-compliance will be accounted for in the year in which it is paid.

vii. Note no.45 regarding write off out of opening balance of insurance claim receivable. We are informed that out of total write off, amount of Rs. 196.02 Million is on account of rejection of the claim by the insurance agency and insurance claim receivable of Rs. 30.17 Million is reversed as at year end as the same is not confirmed by the insurance agency.

viii. Note no.46 regarding additional charge of Rs. 345.81 Million for insurance cost allocated by Holding Company for the year on account of increase in insurance premium for FY 2019-20 attributable to Companys high claim ratio for the damages claim from the insurance company during prior years. This being the technical matter, we have relied on the representation provided to us in respect of the basis of allocation between the Holding Company and the Company.

ix. Note No. 34 in respect of various disputes for demands raised against the Company by Service tax and Customs authorities and its financial impact on the financial statements of the Company. Total amount of disputed taxes in respect of Service tax and Customs duty as disclosed in contingent liabilities is Rs.1,172.98 Million. In the opinion of the management, these matters are pending outcome of the appeals and involves peculiar issues of aviation industry which are not yet resolved. In the opinion of the management there are valid technical grounds based on which demands are disputed and hence, no provision is considered necessary and disclosure as contingent liability is appropriate.

x. Note no. 60 regarding unreconciled Airport Tax payable of Rs. 176.88 Million.

xi. Note No. 36 in respect of adoption of threshold level for retrospective restatement for prior period items during the year. We are informed that the Company has adopted the threshold level for retrospective restatement of prior period item in line with the criteria followed by the Holding Company. Consequently, prior period expense (net) of Rs. 117.75 Million pertaining to FY 201819 and prior period expenses (net) of Rs. 83.68 pertaining to period prior to FY 2018-19 are accounted for in current year.

xii. In respect of delay in filing of form MSME-1 for the half year ended 30^th September, 2019.

Our opinion is not qualified in respect of above matters. Para nos. i to vi were also reported under emphasis of matter in previous year and our opinion was not qualified for those matters.

4. Information Other than the Financial Statements and Auditors Report Thereon

The other information obtained at the date of this auditors report in Directors report including annexures thereon, is prepared by the Board of Directors and 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 identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this report, 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.

5. Responsibilities of Management and those charged with governance for the Ind AS financial statements

The Companys 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 financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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, the Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so

The Board of Directors are also responsible for overseeing the Companys financial reporting process.

6. Auditors Responsibilities for the Audit of Ind AS Financial Statement

1. 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 auditors 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 Companies Act, 2013, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system 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 managements 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 Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors 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 auditors 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.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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 all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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.

7. Other Matters

i. The Company conducted physical verification of part of inventories at Mumbai location subsequent to year end. We have relied on the physical verification of inventories carried out by the management and independent firm of chartered accountants and the report of the said firm.

ii. Due to Covid-19 and consequent lockdown, we were unable to visit the business area located outside Mumbai and hence we had rely upon the documents / returns provided to us for our verification by the said business areas.

8. Report on Other Legal and Regulatory Requirements

A. As required by the Companies (Auditors Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 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.

B. As required under Section 143(5) of the Act, we enclose herewith, as per Annexure "B", our report on the directions issued by the Comptroller & Auditor General of India.

C. 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 and proper returns adequate for the purpose of our audit have been received from Business Areas which were not visited by us.

c) The Balance Sheet, the Statement of Profit and Loss (Including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in equity read with Notes to Accounts dealt with by this Report are in agreement with the books of account and with the returns received from Business Areas which were not visited by us.

d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

e) The Company being a Government Company as defined in section 2(45) of the Companies Act, 2013 is exempted from the applicability of the provision of the section 164(2) of the said Act, vide Circular No.G.S.R.463(E) dated 5^th June 2015 issued by the Ministry of Corporate Affairs.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure "C" and

g) The Company being a Government Company as defined in section 2(45) of the Companies Act, 2013 is exempted from the applicability of the provision of the section 197 of the said Act, vide Circular No.G.S.R.463(E) dated 5^th June 2015 issued by the Ministry of Corporate

Affairs.

h) 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 (as amended), in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us

i. The Company has disclosed the impact of pending litigation on its financial position in its financial statement - Refer to Note No.34.

ii. The Company does not have any long-term contracts including derivative contracts for which there could be any material foreseeable losses and hence, the question of making provision for such losses does not arise.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

		For M.A. Parikh & Co
		Chartered Accountants
		Firm Registration No: 107556W
		Sd/-
		Mukul Patel
Place	: Mumbai	Partner
Date :	28 October 2020	Membership No.: 032489
		UDIN : 20032489AAAABW3597

ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT FOR THE YEAR ENDED

31^st MARCH 2020

The Annexure referred to in paragraph 8(A) under the heading ‘Report on other legal and regulatory requirements of our Independent Auditors Report to the members of Air India Express Limited (‘the Company) on financial statements for the year ended 31^st March 2020. We report that:

i. In respect of the Property, Plant and Equipment

a. The Company is in the process of updating its Property, Plant and Equipment register with respect to quantitative details and location thereof.

b. The Company has a program of Physical Verification of Property, Plant and Equipment on rotational basis biennially so that every asset is verified once every four years which in our opinion is adequate. Company has conducted physical verification of Property, Plant and Equipment during the financial year ended 31^st March, 2019 and as per the program assets were not due for physical verification during the financial year ended 31^st March, 2020 and hence question of our comment on discrepancies not arise.

c. According to the information and explanation given to us, the Company does not own any immovable property. Therefore, clause (i) (c) of para 3 of the Order is not applicable to the Company.

ii. According to the information and explanations given to us, on account of lockdown, the Company has conducted physical verification of only part of the inventory at the Mumbai location subsequent to the year end and Trivandrum location during the financial year 2019-20. In our opinion, for the inventories verified, frequency of physical verification is reasonable. The verification has been conducted by the Management and an independent agency and discrepancies noticed during the verification were material and have been properly dealt with in the books of account (Refer Note No. 41). However, with respect to the balance part of inventories at Mumbai and Trivandrum location and all the inventories at other locations (including inventory lying with third parties), in absence of physical verification, we cannot comment on the reasonableness of frequency and discrepancies, if any, which may have remained undetected & unadjusted.

iii. According to the information and explanation given to us, the Company has not granted any loans, secured or unsecured to companies, firms / LLPs or other parties covered in the register maintained under section 189 of the Act. Therefore, the requirements of clause (iii)(a), (iii)(b) and (iii)(c) of paragraph 3 of the Order are not applicable to the Company.

iv. As per information and explanation given to me, the Company has not granted any loans or made any investments, given any guarantee or provided security in connection with any loan for which compliance under section 185 or 186 of the Act is required. Therefore, question of our comment on compliance with section 185 and 186 of the Act does not arise.

v. In our opinion and according to the explanations given to me, the Company has not accepted any deposits. Therefore, question of reporting compliance with directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and rules framed thereunder does not arise. We are informed that no order relating to the Company in this regard has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vi. Based on the information & explanation provided to us by the management, maintenance of cost records

has not been prescribed by the Central Government under sub-section (1) of section 148 of the Act in respect of the Companys services. Accordingly, clause (vi) of paragraph 3 of the Order is not applicable to the Company.

vii. In respect of statutory dues:

According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues and there were no dues in arrears, as at 31^st March, 2020 for a period of more than six months from the date on which they became payable, except the following:

a. Profession Tax: Rs. 1.11 Million on account of pendency of determination of jurisdiction by the concerned authority.

b. Provident Fund: Rs. 0.18 Million.

c. Payment of Tax Deducted at Source (TDS) u/s 194 C, 194 H, 194 J & 1941 of the Income Tax Act, in respect of:

i. As the Company makes adhoc TDS payments for expenses other than salary every month which are pending reconciliation in absence of proper linkage between deduction and deposit of TDS, we are not in a position to offer any comments, as regards delay if any.

ii. Unascertained amount towards interest and penalty, if any, in respect of delayed/unpaid TDS on account of Companys policy of not deducting tax at source while providing for expenses but deducting and paying while payment of expenses.

d. Statutory dues, if any, in respect of foreign Business Areas not covered during our audit, since the records are maintained at the respective Business Areas which were not available for verification, we are unable to comment whether the dues have been deposited on a timely basis.

1. According to the records of the Company and information and explanations given to us, there are no dues outstanding in respect of Income Tax, Wealth Tax, Service Tax, Good and Service Tax, Cess or other statutory dues on account of any dispute except as mentioned below:

Sr. No.	Name of the Statute	Gross Demand	Amount Deposited	Unpaid Demand	Nature and forum where the dispute is pending
1	Service Tax for Financial Year 2005-06 to 2016- 17	1,126.99	-	1,126.99	Commissioner of GST and Central Excise
2	Customs Duty	45.99	0.20	45.79	Commissioner of Central Excise, Customs & Service Tax
3	Employees State Insurance Corporation June 2003- July 2012	21.63	2.0	19.63	Director of Employees State Insurance Corporation

viii. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to its banks and to debenture holders except for the following:

Name of the Bank	Amount of Installment Rs. In Million	Period of Default No of Days
Apple Bank for Savings	63.44	1
Apple Bank for Savings	63.81	2
JP Morgan Chase Bank N.A	62.47	2
JP Morgan Chase Bank N.A	63.90	2
JP Morgan Chase Bank N.A	63.80	2

Further, the Company not raised loans or borrowed from financial institution and government.

ix. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year and hence paragraph 3 (ix) of the Order is not applicable. Therefore, the question of utilization of funds for the purpose for which it was taken does not arise.

x. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or no fraud on the Company by its officer and employees has been noticed or reported during the year and nor have we been informed of such case by the management.

xi. As per the Notification GSR 463(E) of Ministry of Corporate Affairs, Dated 5^th June 2015, Section 197 of the Companies Act 2013 is not applicable to Government Companies. Therefore, the paragraph 3 (xi) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Thus, paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with related parties are in compliance with sections 177 and 188 of the Act and where applicable, the details of such transactions have been disclosed in the financial statements as required by Indian Accounting Standard 24.(Refer Note No. 51)

xiv. According to the information and explanations give to us and based on our examination of the records of the Company, during the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures. Therefore, the provisions of clause (xiv) of paragraph 3 of the Order are not applicable to the Company.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with the directors or persons connected with them and hence, paragraph 3(xv) of the Order is not applicable.

xvi. According to the information and explanations given to us and based on our examination of the records of the Company it is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

		For M.A. Parikh & Co
		Chartered Accountants
		Firm Registration No: 107556W
		Sd/-
		Mukul Patel
Place	: Mumbai	Partner
Date :	28 October 2020	Membership No.: 032489
		UDIN : 20032489AAAABW3597

ANNEXURE - B TO THE INDEPENDENT AUDITORS REPORT

As referred to in our Independent Auditors Report to the members of the Company on the financial statements for the year ended 31^st March, 2020, we report that :

Based on the information and explanations obtained by us, we furnish our comments on the Directions issued by the Comptroller and Auditor General of India relating to the accounts of the Company for the year ended 31^st March, 2020.

Sr No	Directions / Sub-Directions	Statutory Auditors Comments
1.	Whether the Company has system in place to process all the accounting transactions through the IT system? If yes, the implications of processing of accounting transactions outside IT system on integrity of the accounts along with the financial implications, if any, may be stated	Based on the information and explanations given to us, the Company generally has a system in place to process all the accounting transactions through IT system except to the extent as stated hereunder:
		(i) The entries being made manually on periodic basis in respect of sales/revenue with the accounting software (SAP) basis reconciliation prepared by an independent outside agency.
		(ii) Payroll records are partially maintained manually.
		(iii) Depreciation on PPE is computed manually and thereafter, entered into SAP.
		(iv) Cargo revenue, flight interruption manifest and code shade Revenue are accounted manually on the basis of information from the Holding Company.
		(v) Non aircraft inventories are not maintained in ‘RAMCO System
		As per the information and explanations given to us, the above records outside SAP system are manually verified before entering into SAP system for their appropriate integration therein.
2.	Whether there is any restructuring of an existing loan or cases of waiver/write- off of debts/loans/interest etc. made by a lender to the company due to the companys inability to repay the loan? If yes, the financial impact may be stated	Based on information and explanation given to us, there were no cases of restructuring of an existing loan or cases of any waiver/write-off of debts/loan/ interest made by the lender.
3.	Whether funds received/receivable for specific schemes from Central/State agencies were properly accounted for / utilized as per its term and conditions? List the cases of deviation	Based on information and explanation given to us, the company has not received any funds for specific schemes from central/state agencies.

 

		For M.A. Parikh & Co
		Chartered Accountants
		Firm Registration No: 107556W
		Sd/-
		Mukul Patel
Place	: Mumbai	Partner
Date :	28 October 2020	Membership No.: 032489
		UDIN : 20032489AAAABW3597

ANNEXURE C TO THE INDEPENDENT AUDITORS REPORT FOR THE YEAR ENDED

31^st MARCH 2020.

[Referred to in paragraph 8(C)(f) under the heading "Report on other legal and regulatory requirements" of our report of even date]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

Qualified Opinion

We have audited the internal financial controls over financial reporting of Air India Express Limited ("the Company") as of 31^st March 2020 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

According to the information and explanations given to us and based on our audit, material weaknesses have been identified in the Companys internal financial controls over financial reporting as at 31^st March, 2020 in respect of:

a) The company did not have an effective interface between various functional software relating to Revenue and Payroll with the accounting software resulting in accounting entries being made manually on periodical basis.

b) Cargo revenue, flight interruption manifest and code shade Revenue are accounted manually on the basis of information from the Holding Company.

c) The company did not have an appropriate internal control system for reconciliation of Control Accounts in relation to the Sales/Revenue, Inventory and Payroll.

d) Controls over planning and monitoring of financial closing process.

e) Controls over spreadsheets used in financial closing process.

f) The company did not have an appropriate internal control system for deduction, timely deposit and reconciliation of statutory dues.

g) The company did not have an appropriate internal control system for obtaining confirmation of balances on a periodic basis and reconciliation of unmatched Receivables and Payables. The same has been done as at the end of the year.

h) The Company did not have an effective internal control system for reconciliation of onboard "Bar Sales" with consumption and realization.

i) The company did not have an effective system for timely accounting of entries.

j) Maker checker process needs to be strengthened.

k) System of verification of reconciliation provided by outsourced agency relating to revenue needs to be strengthened.

l) During the year, due to lockdown, the Company has not conducted physical verification of inventories at all the locations and has relied on the inventory reports generated from the system.

A ‘material weakness is a deficiency, or a combination of deficiencies, in internal financial controls over financial reporting, such that there is a reasonable possibility that a material misstatement of the companys annual financial statements will not be prevented or detected on a timely basis.

In our opinion, the Company has, in all material respects, maintained adequate internal financial controls over financial reporting as of 31^st March, 2020, based on the internal control over financial reporting 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, and except for effects/possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Companys internal financial controls over financial reporting were operating effectively as of 31^st March, 2020.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the financial statements of the Company for the year ended 31^st March, 2020, and these material weaknesses have affected our opinion on the financial statements of the Company and we have issued a qualified opinion on the financial statements.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 (‘ICAI). 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 Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls with reference to the 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 over financial reporting was established and maintained and if 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 system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditors judgment, 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 Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Companys internal financial control over financial reporting 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 Companys internal financial control over financial reporting includes 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 Companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

		For M.A. Parikh & Co
		Chartered Accountants
		Firm Registration No: 107556W
		Sd/-
		Mukul Patel
Place	: Mumbai	Partner
Date :	28 October 2020	Membership No.: 032489
		UDIN : 20032489AAAABW3597