Caplin Point Laboratories Auditors Report


To

The Members

Caplin Point Laboratories Limited, Chennai

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

We have audited the accompanying standalone Ind AS financial statements of Caplin Point Laboratories Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and 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 standalone 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 Indian Accounting Standards prescribed under section 133 of the Act read 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 March 31, 2023, its profit, total 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 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 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 standalone 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. In addition to the matter described in the Basis of Qualified Opinion section, we have determined the matters described below to be the key audit matters to be communicated in our report.

S. No Key Audit Matter Auditor?s Response
1 Accounting of recognition, measurement, presentation, and disclosures of revenues and other related balances in view of applicability of Ind AS 115 "Revenue from Contracts with Customers" (Revenue Accounting Standard) Principal Audit Procedures
The application of the revenue accounting standard involves certain key judgments relating to the identification of distinct performance obligations, determination of transaction price of the identified performance obligations, the appropriateness of the basis used to measure revenue recognised over a period. Additionally, the revenue accounting standard contains disclosures that involve collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. We assessed the Companys process to identify the impact of the revenue accounting standard.
Our audit approach consisted of testing the design and operating effectiveness of the internal controls and substantive testing as follows:
• Evaluated the design of internal controls relating to the implementation of the revenue accounting standard.
• Selected a sample of continuing and new contracts, and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving inquiry and observation, reperformance, and inspection of evidence in respect of the operation of these controls.
• Tested the relevant information technology systems access and change in management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the revenue accounting standard.
• Recognition of Export Incentives as per the terms of the Schemes have been evaluated.
2 System environment and internal controls: Impact of change in the Accounting Sotware( TCS Ion to SAP ) on the Company?s bookkeeping and control. We assessed the companys process to identify, assess, and respond to the risk of material misstatement considering the uncertainties and the impact of Migration from TCS ion to SAP on the companys book keeping for the year under consideration.
The Companys key financial accounting and reporting processes are highly dependent on the automated controls. The Company has a complex system environment, reflecting the different nature of the different operating activities. The Company has renewed its system landscape, with the Migration from TCS Ion to SAP during the year for better control and tracking. We have designed, planned, and performed the following audit procedures
The implementation of new systems, together with the complex system environment introduce risks related to system access, change management and data transfer between the different systems, and we have accordingly designated this as a focus area in the audit. Management has mitigated this risk by means of manual controls. • Testing the system implementations included both the testing of the controls surrounding implementation as well as testing the migration of income statement and balance sheet balances between legacy systems and the new system.
• Evaluating the impact on inventory management and cost allocation to inventory on account of change in the manner of computation and apportionment of overhead costs post such migration.
• Ascertaining the differences in the classification of Account Balances in the books and ensuring proper presentation in the Financial Statements of the Company.
• Verified the impact of the same on product Groups and subgroups, Product Price lists, supplier / customer master.
• Treatment of open invoices, Bills, purchase order and sale orders and other opening account balances have been evaluated.
• Our response to the risks related to the complex system environment includes both the test of IT and business process controls. We also performed sufficient tests of details as part of our audit.
• We also tested the companys controls around system interfaces, and the transfer of data from one Software to another keeping in mind the key financial reporting controls.
3 Verification and Valuation of Inventory in accordance to the financial statements? accounting principles on inventories - IND AS 2: Our audit procedures related to valuation and verification of inventories included:
The company has significant inventory balances in both the Manufacturing as well as trading segments. Inventory management, stocktaking routines and costing of inventories are underlying key factors in determining the value of inventories.According to the financial statements accounting principles inventories are measured at the lower of cost or net realizable value. Due to Size and complexity of the inventory valuation and Verification of inventories is considered as a key audit matter • Assessing the compliance of companys accounting policies over inventory with applicable accounting standards.
• Assessing the inventory valuation processes and practices. On major locations we tested the effectiveness of the key controls
• Assessing functionality of the key IT systems of inventory management.
• Testing of controls over inventory management and accuracy of inventory amounts.
• Performing tests on selected inventory items to relevant components of valuation.
• Evaluate managements instructions and procedures for recording and controlling the results of the entitys physical inventory counting;
• Observe the performance of managements count procedures
• Inspect the inventory; and perform test counts

In addition, we assessed the appropriateness of the Companys disclosures in respect of inventory valuation.

Information other than the financial statements and Auditor?s Report thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the 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, 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.

Responsibilities of Management and Those Charged with Governance for the standalone financial statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the 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 is 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Companys 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 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 Standards on Auditing 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 Standards on Auditing, 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 explaining 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.

• 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 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, 2020 (the

‘Order) issued by the Central Government of India 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.

2. As required by Section 143 (3) of the Act, based on our audit 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 purpose 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 standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015.

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023 from being appointed as a director in terms of Section 164(2) of the Act;

f) With respect to the adequacy of the internal financials controls over financial reporting of the company and the operating effectiveness of such controls, refer to a separate report in Annexure B. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the companys internal financial controls over financial reporting; and

g) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

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 information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in the Standalone financial statements - refer note 34 to the financial statements;

ii. The Company does not have any long-term contracts including any Derivative Contracts for which there are material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2023;

iv. (i) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ii) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:

• directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or

• provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

(iii) Based on audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under subclause (i) and (ii) contain any material misstatement.

i) In our opinion and according to the information and explanations given to us, the final dividend paid by the company during the year in respect of the same declared for the previous year is in accordance with the Section 123 of the Act to the extent it applies to the payment of dividend. The interim dividend declared by the Company for the year until the date of this audit report is in accordance with section 123 of the Companies Act 2013 to the extent it applies to the declaration of dividend. However, the said dividend was not paid on the date of this audit report.

j) Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of accounts using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the company with effect from April 1, 2023, and accordingly, reporting under rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

Annexure -A to the Independent Auditors? Report

Referred to in paragraph 1 under the heading ‘Report on Other Legal & Regulatory Requirement of our report of even date to the financial statements of the Company for the year ended March 31, 2023:

i) (a) (A) The Company has maintained proper records showing full

particulars, including quantitative details and situation of Property, Plant and equipment;

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) We are informed that the company has formulated a programme for physical verification of all Property, Plant and equipment by which all fixed assets are verified in a phased manner, which, in our opinion is reasonable considering the size of the company and the nature of its assets. Accordingly, the Property, Plant and equipment have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties included in fixed assets are held in the name of the Company, except for a land and building for Rs 17.38 Crores purchased by the Company during the financial year 2020-21 through e-auction from Punjab National Bank under the SARFAESI Act, 2002 and rules thereof, for which the transfer of title is in progress. In respect of immovable properties taken on lease and disclosed as property, plant and equipment in the standalone Ind AS financial statements, the lease agreements are in the name of the Company.

(d) The Company has not revalued the Property, Plant and Equipment or Intangible assets during the year.

(e) According to information and explanation given to us, no proceedings have been initiated or are pending against the company for holding any Benami property under the Benami Transactions (prohibitions) Act,1988(45 of 1988) and rules made thereunder.

ii) (a) According to information and explanation given to us, physical

verification of inventory has been conducted at reasonable intervals by the management and in our opinion, the coverage and procedure of such verification by the management is

appropriate; Discrepancies noticed were less than 10% for each class of inventory.

(b) During the year, the company was sanctioned working capital limits to the extent of Rs 57.6 crores , on the basis of security of Land and factory building and current assets by various banks. According to information and explanation given to us, the quarterly statement filed by the Company with the bank are in agreement with the books of account of the Company.

iii) According to the information and explanations given to us, during the year, the Company has not made any guarantee or security or granted any advances in the nature of loan, secured or unsecured to companies, firms, limited liability partnerships or any other parties except an unsecured Loan to one of its Subsidiary company - Caplin Steriles Limited, India and investment made in Caplin Onco Ltd (Wholly Owned Subsidiary) during the year. Details of the Loan is stated in sub-clause (A) below

(a) A. According to the information and explanation given to us and based on the audit procedures carried on by us, the company has granted loan to one of its subsidiary on an arms length basis, the details of which are as below.

Particulars Amount (Rs In Crores)
Aggregate amount during the year 116.25
Balance outstanding as at balance sheet date 156.00

B. According to the information and explanation given to us and based on the audit procedures carried on by us, the company has not granted any loan to any other parties. Hence, we do not have anything specific to report under this clause.

(b) According to the information and explanation given to us and based on the audit procedures carried on by us, we are of the opinion that the investments made, and the terms and conditions of loans provided are not prejudicial to the interest of the Company.

(c) According to the information and explanation given to us, the payment of Interest has been regular and the repayment of principal has not commenced as per terms of the loan sanctioned

(d) According to the information and explanation given to us, there is no amount overdue for more than 90 days in respect of loan provided.

(e) According to the information and explanation given to us and on the basis of our examination of records, there is no loan given falling due during the year which has been renewed or extended or fresh loans given to settle the overdues of existing loans given to the same party.

(f) According to the information and explanation given to us and on the basis of our examination of records, the Company has not given any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment.

iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 with respect to loans and advances granted, guarantees and securities provided and investments made by the company during the year.

v) According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of

Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under. Accordingly, reporting under clause (v) of the Order does not arise.

vi) We have reviewed the cost records maintained by the company as prescribed by the central government under section 148(1) of the companies act 2013 and are of the opinion that prima facie the prescribed cost records are made and maintained. We have, however not made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess, Goods and Services Tax and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, there are no undisputed arrears of statutory dues which are outstanding as at 31st March 2023 for a period of more than six months from the date they become payable.

(b) According to the records of the company and the information and explanation given to us the details of disputed Excise, Value Added Tax and Income Tax not deposited are as follows:

Name of the Statute Nature of Due Amount in Crs Period to which it relates Forum in which the Dispute is pending
Income Tax IT Matters under dispute 0.64 A.Y 2018-19 DCIT, Chennai

viii) According to the information and explanations given by the management, we have not come across any transactions not recorded in the books of account, which have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

ix) (a) According to information and explanation given to us, the company has not taken any loans or other borrowings from any lender. Hence reporting under clause 3(ix)(a) of the order does not arise.

(b) According to the information and explanations given to us, we report that the company has not been declared as willful defaulter by any bank or financial institution or government or any government authority.

(c) According to the information and explanations given to us by the management, the Company has not obtained any term loans during the year. Accordingly, clause 3(ix)(c) of the Order is not applicable.

(d) According to the information and explanations given to us, and on an overall examination of the financial statements of the company, we report that no funds raised on short term basis have been utilized for long term purposes. Accordingly, clause 3(ix)(d) of the Order is not applicable.

(e) According to the information and explanation given to us, the company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates. Accordingly, clause 3(ix)(e) of the Order is not applicable.

(f) According to the information and explanation given to us, the company has not raised loans during the year on the pledge of securities held in its subsidiaries or Associate Companies and hence reporting on clause 3(ix)(f) of the order is not applicable.

x) (a) Company has not raised any money by way of an initial public

offer or further public offer (including debt instruments) during the year. Accordingly, the provisions of Clause (x)(a) of the Order is not applicable to the Company.

(b) The company has not made any preferential allotment or private placement of shares or convertible debentures during the year.

xi) (a) In our opinion and according to the information and explanation 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 course of our audit.

(b) According to the information and explanation given to us, no report under sub-section (12) of section 143 of the Companies Act is required to be filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

(c) According to the information and explanation given to us, no Whistle-blower complaints have been received during the year.

xii) The Company is not a Nidhi Company and accordingly, paragraph (xii) of the order is not applicable to the Company.

xiii) According to the information and explanations given to us and based on our examination of the records of the company, transactions with the related parties are in compliance with section 177 and 188 of the Act. The details of transactions during the year have been disclosed in Note 44 of the Standalone Financial statements as required by the applicable Accounting Standards.

xiv) a) In our opinion and based on our examination, the company has

an internal audit system commensurate with the size and nature of its business

b) We have considered the Internal Audit Reports of the company for the period under audit.

xv) According to the information and explanations given to us, in our opinion during the year the company has not entered into non-cash transactions with directors or persons connected with its Directors and hence provisions of Section 192 of the Companies Act 2013 are not applicable to the company.

xvi) (a) According to the information and explanations given to us and

based on our examination of the records of the company, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

(b) According to explanations, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Hence, Clause (xvi)(b) of the Order is not applicable.

(c) According to information and explanation given to us, the company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Hence Clause (xvi)(c) does not apply.

(d) According to information and explanation given to us the Group does not have any CIC, accordingly, the requirements of Clause (xvi)(d) is not applicable.

xvii) According to information and explanation given to us, the Company has not incurred any cash loss in the current and in the immediately preceding financial year.

xviii) According to information and explanation given to us, there has been no resignation of Statutory Auditors during the year and accordingly this clause is not applicable.

xix) According to the information and explanations given to us, on the basis of Financial Ratios, ageing and expected dates of realization of Financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and the Management plans, nothing has come to our attention which causes us to believe that any material uncertainty exists on the date of audit report that the Company is not capable of meeting its liabilities as on date of the Balance Sheet and when they fall due within a period of one year from balance sheet date. We however state that this is not an assurance as to the future viability of the Company.

xx) (a) In our opinion and according to the information and explanations given to us, there are no unspent amounts towards Corporate Social Responsibility (CSR) of sub-section 5 of Section 135 of the said Act pursuant to any project other than Ongoing project. Accordingly, reporting under clause 3(xx)(a) of the Order is not applicable for the year.

(b) According to the information and explanations given to us, In respect of ongoing projects, the company has transferred unspent CSR amount as at the end of the previous financial year to a special account within a period of 30 days from the end of

the said financial year in compliance with the provision of 135(6) of the Act.

Annexure B to The Independent Auditor?s Report

(Referred to in paragraph 2(f) under ‘Report on Other Legal and Regulatory requirements section of our report to the Members of Caplin Point Laboratories Limited of even date)

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

Management?s Responsibility for Internal financial Controls

The Companys Board of Directors 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 (the "Guidance Note") 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 the Companys business, including adherence to Companys 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 Act.

Auditors? Responsibility

Our responsibility is to express an opinion on the 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") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Act, to the extent applicable to an audit of Internal Financial Controls. 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 were 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 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 over Financial Reporting.

Meaning of Internal financial Controls over financial Reporting

A Companys Internal Financial Controls 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 Controls 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 unauthorized 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 Internal Financial Controls over Financial Reporting may become inadequate because of changes in conditions,

or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2023, 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.