Godfrey Phillips India Ltd Directors Report.

s

To the members of Godfrey Phillips India Limited

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

We have audited the accompanying standalone Ind AS financial statements of Godfrey Phillips India Limited ("the Company"), which comprise the Balance sheet as at March 31, 2019, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity 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, the aforesaid standalone 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 accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs),as 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 Standalone Ind AS 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 audit opinion on the standalone Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
Recoverability of carrying value of property, plant and equipment, leasehold land under operating lease and capital work in progress relating to retail and chewing business (as described in note 5 (c) (i) & (ii) of the standalone Ind AS financial statements)
As at March 31, 2019, the carrying value of property, plant and equipment including leasehold land under operating lease and capital work in progress relating to retail and chewing business was Rs. 7,451.70 lakhs and Rs. 7,271.23 lakhs respectively. Our procedures amongst others included the following:
-Obtained and assessed management analysis of internal and external factors impacting the Companys retail and chewing business in line with Ind AS 36.
Recoverability of carrying value of assets relating to retail and chewing business have been identified as a key audit matter due to: -In relation to the retail business where impairment indicators were identified by the management, obtained and evaluated the valuation report of management appointed expert for the purpose of testing the key assumptions and methodologies used to determine the recoverable amount by engaging valuation specialists.
- The significance of the carrying value of assets being assessed. In case of chewing business, critically evaluated the management basis of concluding with no indicators of impairment as at March 31, 2019 which require further analysis for determination of the recoverable amount by obtaining the business projections, holding discussions with the business heads and corroborating the explanations provided by the management in respect of the current year performance of the said business.
- Significant losses being incurred in the retail business despite increase in the number of stores in the current year and continuing losses in the chewing business.
- The assessment of the recoverable amount of the Companys Cash Generating Units (CGUs) involves significant judgements and estimates. -Assessed the independence, competence and objectivity of the management experts used for determining the recoverable amount.
The key judgements and estimates centred on identification of indicators of impairment and future -Compared the recoverable amount of the assets relating to retail business to the carrying value in books.
projections relating to the aforesaid business. -Assessed the disclosures made in the financial statements by the Company in this regard.

Impairment of investments in one of the subsidiaries Flavors & More Inc. (as described in note 9 and note 48 of the standalone Ind AS financial statements)

As at March 31, 2019, the carrying value of Companys investment in subsidiaries amounted to Rs. 7,459.65 lakhs. Management reviews on a periodical basis whether there are any indicators of impairment of any of its investments. Our procedures in assessing the impairment of investments included the following:
For investments where impairment indicators exist, management estimated the recoverable amounts of the investments, being higher of fair value less costs of disposal and value in use. Significant judgements are required to determine the key assumptions used in determination of fair value / value in use. As the impairment assessment involves significant assumptions and judgement, we regard this as a key audit matter. -Obtained and assessed management analysis of impairment of investment in subsidiaries. Assessed factors considered by the management as impacting such analysis of impairment assessment in line with Ind AS 36.
-Specifically, in relation to those investments where impairment indicators were identified, tested the methodologies used by the management to determine the recoverable amount of such investments.
-Compared the recoverable amount of the subject investment to the carrying value in books.
We focused our effort on those investments where there are impairment indicators. The Company identified impairment in carrying value of investment in one of its subsidiary ‘Flavors & More Inc.owing to its decision for closure of business operations of the said subsidiary. Impairment charge of Rs. 1,508.50 lakhs has been recorded in the current year. -Assessed the disclosures made in the financial statements by the Company regarding such investments.

Revenue recognition (as described in note 4.1.1 and note 26 of the standalone Ind AS financial statements)

For the year ended March 31, 2019 the Company As part of our audit procedures, our procedures has recognized revenue from operations of Rs. included the following: 259,203.25 lakhs. - Read and assessed the Companys revenue recognition Revenue recognition has been recognized as a key accounting policies including the recognition and audit matter due to the following consideration: classification criteria for trade spend in accordance
- Cut-off: The variety of terms that define with the requirements of Ind AS 115.
when control is transferred to the customer. - Performed walkthroughs and test of controls, assisted by Further the Company focuses on revenue our IT specialists, of the revenue recognition processes as a key performance measure, which and assessed the design and operating effectiveness of could create an incentive for revenue key controls.
- to be recognised before the control is -Selected a sample of transactions taking place at either transferred. This give rise to the risk that side of the balance sheet date to evaluate whether revenue is not recognized in the correct revenue was recognised in the correct period by period. agreeing the date of revenue recognition to third party Measurement: Revenue is measured net of supports such as bill of lading, lorry receipts etc.
pricing allowances, other trade discounts, - Tested the provision calculations related to trade and price promotions to customers spend by agreeing a sample of amounts recognised (collectively ‘trade spend). There is to underlying arrangements and other supporting a risk that trade spend accruals are documents. Compared the year end rebate provisions incorrectly recorded as its also requires and rebate costs in the year to prior year amounts and a certain degree of estimation, resulting expectations in order to identify unusual trends. in understatement of the associated expenses and accrual.
Accuracy and completeness of related party transactions (as described in note 45 of the standalone Ind AS financial statements)
The Company has undertaken transactions with its related parties. These include sale of goods to related parties, purchase of goods and services from related parties. As part of our audit procedures, our procedures included the following:
- Obtained and read the Companys policies, processes and procedures in respect of identifying related parties, obtaining approval, recording and disclosing related party transactions.
We identified accuracy and completeness of the said related party transactions as a key audit matter due to significance of related party transactions, risk of transactions entered not transacted on an arms length basis and risk of such transactions remaining undisclosed. - Read minutes of shareholder meetings, board meetings and audit committee minutes regarding Companys assessment of related party transactions being in the ordinary course of business at arms length.
- Tested, on a sample basis, related party transactions with the underlying contracts, confirmation letters and other supporting documents.
- Agreed the related party information disclosed in the financial statements with the underlying supporting documents, on a sample basis.
- Assessed the related party disclosures in the financial statements through review of statutory information, books and records and other documents obtained during the course of our audit.

 

We have determined that there are no other key audit matters to communicate in our report.

Information Other than the Financial Statements and Auditors 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 standalone Ind AS financial statements and our auditors report thereon. The Annual report is expected to be made available to us after the date of this auditors report. Our opinion on the standalone Ind AS financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether such other information is materially inconsistent with the standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity 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 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone Ind AS 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.

Those charged with governance are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS 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 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 standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS 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 standalone Ind AS financial statements for the financial year ended March 31, 2019 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 of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended; (e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report; (g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to 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 its standalone Ind AS financial statements – Refer Note 37 to the standalone Ind AS financial statements; ii. The Company did not have any long-term contracts including derivative contracts for which there were any 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.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Atul Seksaria
Partner
Membership Number: 086370
Place of Signature: New Delhi
Date: May 30, 2019

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

(b) All property, plant and equipment have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.

(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at March 31, 2019 and no material discrepancies were noticed in respect of such confirmations.

(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, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, provision of section 186 of the Companies Act 2013 in respect of investments and guarantees made have been complied with by the Company. In our opinion and according to the information and explanations given to us, there are no loans and securities granted in respect of which provisions of section 185 and 186 of the Companies Act, 2013 are applicable and hence not commented upon.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under Section 148(1) of the Companies Act, 2013, for the products of the Company and hence not commented upon.

(vii) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues applicable to it. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income-tax, service tax, sales-tax, custom duty, value added tax, goods and service tax, duty of excise, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. (c) According to the records of the Company, the dues of income tax, excise duty, goods and service tax, sales tax, value added tax and service tax which have not been deposited on account of any dispute and where the Company is in appeal are as follows:

Nature of the Statute Nature of the Dues Amount (Rs. In Lakhs) Amount Deposited (Rs. In Lakhs) Financial Years to which the amount relates Forum where dispute is pending
Central Sales Tax Act, 1956 Sales Tax 37.72 18.86 2006-07 Sales Tax Tribunal
Value 2.13 0.23 2014-15 Sales Tax Tribunal
Madhya Pradesh VAT Act, 2002 Added Tax Upto Commissioner
21.50 6.06 2012-13 (Appeals) Level
Goa VAT Act, 2005 Value 0.99 - 2009-10 Upto Commissioner
Added Tax (Appeals) Level
Rajasthan VAT Value
205.50 64.53 2008-09 to 2013-14

Upto Commissioner

Act, 2003 Added Tax (Appeals) Level
222.40 151.97 2007-08 & 2012-13 Sales Tax Tribunal
Uttar Pradesh
Value 18.36 12.52 2006-07 High Court
(UP) VAT Act,
Added Tax
2008 Upto Commissioner
197.88 106.06 2014-15 & 2015-16
(Appeals) Level
Upto Commissioner
6.47 - 2015-16 & 2016-17
(Appeals) Level
Central Excise Act, 1944 Excise Duty 1,316.08 195.05 2008-09 to 2015-16 Customs, Excise and Service Tax Appellate
Tribunal
918.08 244.09 2007-08 to 2011-12 High Court
The State Goods and Services Tax Act, 2017 Goods and Upto Commissioner
Services Tax 49.70 - 2017-18 (Appeals) Level
Finance Act, 1994 Service Tax 34.94 11.70 2008-09 to 2012-13

Upto Commissioner (Appeals) Level

1979-80 to 1982-
244.00 244.00 83, 1995-96 to High Court
1997-98
Income Tax Appellate
Income Tax Act, 1961 Income Tax 128.45 127.16 2009-10 & 2010-11
Tribunal
314.03 106.86 2012-13 to 2014-15

Commissioner of Income Tax (Appeals)

Matters have been
169.21 153.50

1999-2000,2005-06 to 2008-09

referred back to the Assessing officer

Further, as per information available with the Company, the concerned authority is in appeal against favourable orders received by the Company in respect of the following matters:

Nature of the Statute Nature of the Dues Amount (Rs. In Lakhs) Financial Years to which the amount relates Forum where dispute is pending
Income Tax Act,1961 Income Tax 340.54 1969, 1974 to 1977, 1991-92 to 1994-95, 2001-02 to 2003-04 High Court
Income Tax Act,1961 Income Tax 63.21 2011-12 Income Tax Appellate Tribunal
Central Sales Tax Act, 1956 Sales Tax 10.40 2007-08 High Court
Central Excise Act, 1944 Excise Duty 130.83 2009-10, 2010-11 & 2012-13 Customs, Excise and Service Tax Appellate Tribunal

There are no dues of custom duty and cess which have not been deposited on account of any dispute.

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing due towards bank. The Company did not have any dues in respect of a financial institution or debenture holders or any dues in the nature of loan towards Government.

(ix) According to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Company is not a nidhi Company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of share or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) of the Order are not applicable to the Company and, not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of the Companies Act, 2013.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Atul Seksaria
Place of Signature: New Delhi Partner
Date: May 30, 2019 Membership Number: 086370

Annexure 2 referred to in paragraph 2 (f) under the heading

"Report on other legal and regulatory requirements" of our report of even date on the standalone Ind AS financial statements of Godfrey Phillips India Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") We have audited the internal financial controls over financial reporting of Godfrey Phillips India Limited ("the Company") as of March 31, 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

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. 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 the 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 Companies Act, 2013.

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 as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. 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 with reference to these standalone Ind AS financial statements 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 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 internal financial controls system over financial reporting with reference to these standalone Ind AS financial statements.

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.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting with reference to these standalone Ind AS financial statements and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, 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.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Atul Seksaria
Partner
Membership Number: 086370
Place of Signature: New Delhi
Date: May 30, 2019