PVR Ltd Directors Report.

To the Members of PVR Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of PVR Limited (the Company), which comprise the Standalone Balance Sheet as at March 31, 2020, and the Standalone Statement of Profit and Loss (including other comprehensive income), Standalone Statement of Changes in Equity and Standalone Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the standalone financial statements).

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 (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, 2020, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditors Responsibilities for the Audit of the Standalone 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 standalone 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 on the standalone financial statements.

Key Audit Matters

Key audit matters (KAM) 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 standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Description of Key Audit Matters

S No. The key audit matter How the matter was addressed in our audit
1. Going concern assumption Audit procedures
See Note 50 of the standalone financial statements In this area our procedures included:
Due to the outbreak of COVID-19 pandemic, the Companys operations, i.e., the movie exhibition locations have been shut since mid of March 2020 and post balance sheet, till date and this necessitates the evaluation of the Companys ability to continue as a Going concern and meeting its obligations to the stakeholders, creditors, employees and lenders. • Discussed with the management and those charged with governance regarding the possibility and plan for resumption of operations and the Companys ability to meet their obligations during and after the period effected due to COVID-19. Assessed sufficiency of the Companys resources/ funds to meet its costs in the foreseeable future.
• Evaluated the external inputs and assumptions within the going concern model by comparing them to the assumptions used elsewhere in the preparation of the financial statements.
• Assessed the appropriateness and reasonableness of the cash flow forecasts for the foreseeable future taking into account the adverse effects that could arise from the outbreak of COVID-19 pandemic.
• Evaluated the mitigation measures taken by the Companys management and those charged with governance. In particular, we evaluated measures of cost rationalisation, managing the Companys liquidity position and maintaining the facilities for resumption after the lockdown is lifted.
• Assessed the adequacy of the disclosures included in the standalone financial statements.
2. Revenue Recognition Audit procedures
See Note 23 to the standalone financial statements In this area our procedures included:
The Companys significant portion of revenue comes from income from sale of movie tickets and food and beverages (revenue). • Evaluated the design and implementation and operating effectiveness of key controls in relation to recognition of revenue
We have identified revenue recognition as a key audit matter, because its significance to the standalone financial statements and reliance on the Companys IT system. • Involvement of our Subject Matter Experts on information technology with respect to testing of key IT system controls which impacts revenue recognition.
Further, as the revenue comprises of high volumes of individually small transactions, the process of summarising and recording sales revenue is critical. • Performed substantive testing (including year-end cutoff testing) by selecting samples of revenue transactions recorded during and after the year and verifying the underlying documents
• Tested the reconciliation between sales recorded and cash / card / online transactions and agreed those reconciliations through underlying documents on sample basis.
Assessed the adequacy of related disclosures in the standalone financial statements.
3. Impairment of Goodwill/ other intangible assets, property, plant and equipment, capital work-in-progress and ROU assets Audit procedures
In this area our procedures included:
See Notes 3, 4 and 4B to the standalone financial statements • Tested the design and implementation of key controls with respect to impairment assessment of Goodwill and other intangible assets, property, plant and equipment, capital work-in-progress and ROU assets and tested operating effectiveness of such controls.
The carrying value of the Companys goodwill is 104,256 lakh and that of other intangible assets, property, plant and equipment, capital work- in-progress, ROU assets as at March 31, 2020 amounts 488,249 lakh. Due to the impact of COVID-19 pandemic, an impairment assessment of the non-financial assets is to be performed.
• Evaluated the impairment model which is based on discounted cash flows including the adverse effects which could arise from the outbreak of COVID-19 pandemic. This includes evaluation of the assumptions used in key inputs such as forecasted revenue, gross margin and discount rate based on our knowledge of the Company and the industry with the assistance of our Subject Matter Experts.
The impairment testing of above requires significant judgements and estimates in assessing the Value in Use (VIU) regarding assessment and measurement for impairment loss, if any. The risk relates to uncertainties involved in forecasting of cash flows, for key assumptions such as future revenue, margins, overheads, growth rates and weighted average cost of capital for the purpose of determining VIU.
• Performed sensitivity analysis to evaluate whether any foreseeable change in assumptions could lead to a significant change in the VIU.
We have identified impairment assessment of such assets as a key audit matter because of the significance of the carrying value of such assets and involvement of judgements and estimates.
• Assessed the adequacy of related disclosures in the standalone financial statements.
4. Accounting for Business Combination Audit procedures
See Note 43 to the standalone financial statements In this area our procedures included:
The Honble Principal Bench of The National Company Law Tribunal vide its Order dated 23 August 2019 had approved the Scheme of Amalgamation (Scheme) between the Company and SPI Cinemas Private Limited (SPI), effective from the appointed date of 17 August 2018. Accordingly, the Company has given effect to the accounting treatment in the books of account as per the acquisition method prescribed under Ind AS 103 Business Combinations. • Read the approval obtained from National Company Law Tribunal (NCLT).
Tested the underlying workings and evidence relating to the accounting as per the Scheme.
• Assessed the adequacy of related disclosures in the standalone financial statements.
The Scheme has a significant impact on the standalone financial statements of the Company including comparative numbers which have been represented to take the effect of acquisition.
5. First-time adoption of Ind AS 116 Leases Audit procedures
See Notes 4B and 17 to the standalone financial statements In this area our procedures included:
Ind AS 116, Leases, is applicable from April 1, 2019 and introduces a new lease accounting model, wherein the Company (lessee) is required to recognise a right-of-use (ROU) asset and a lease liability in their balance sheet in respect of contracts which qualify as a lease. • Assessed the appropriateness of the accounting policy for leases as per relevant accounting standard with special reference to methodology of the selected transition approach to this standard.
The Company has implemented Ind AS 116 from 1 April 2019 and is required to disclose the impact of implementation Ind AS 116 in the standalone financial statements. • Evaluated and tested Companys internal control processes in relation to lease identification, assessment of the terms and conditions of lease contracts and the calculation of the related lease liability and ROU asset.
In implementing Ind AS 116, the Company has opted for the modified retrospective approach for transition to Ind AS 116. Therefore, the cumulative effect of implementing Ind AS 116 upto 1 April 1, 2019 is recognised as an adjustment to the opening balance of retained earnings as at that date without restating the comparative information. Evaluated the reasonableness of Companys key judgements and estimates made in preparing the transition adjustments, specifically in relation to the lease term and discount rate.
• Tested the completeness and accuracy of underlying lease data and Ind AS 116 adjustments by checking its reconciliation with the number of operating lease contracts and relevant records of the Company.
The assessment of the impact of transition to Ind AS 116 is significant to our audit as it involves selection of the transition option and identification and processing all relevant data associated with the leases which is complex and voluminous. Significant judgement is required in the assumptions and estimates made in the measurement of the ROU asset and lease liability. Such assumptions and estimates include assessment of lease term including termination and renewal options, and determination of appropriate discount rates.
• On a sample basis, tested the accuracy and existence of the ROU asset and lease liability recognised on transition by examining the original lease agreements and re-performing the calculations after considering the impact of the variable lease payments, if any.
• Assessed the adequacy of the disclosures included in the standalone financial statements.
In view of the above, the adjustments arising from the first-time adoption of Ind AS 116 are material and are considered as a key audit matter.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

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

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

Managements and Board of Directors Responsibility for the Standalone Financial Statements

The Companys management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss (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 Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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 financial statements, the management and 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 is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone 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 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 financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate

to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial statements made by the management and Board of Directors.

• Conclude on the appropriateness of the managements and Board of Directors 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 standalone 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 financial statements, including the disclosures, and whether the standalone 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 financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016

(the Order) issued by the Central Government in terms of Section 143 (11) of the Act, we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(A) As required by Section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows 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.

e) On the basis of the written representations received from the directors as on March 31, 2020 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2020 from being appointed as a director in terms of Section 164(2) of the Act.

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

(B) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at March 31, 2020 on its financial position in its standalone financial statements - Refer Note 34 to the standalone 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; and

iv. The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these standalone financial statements since they do not pertain to the financial year ended March 31, 2020.

(C) With respect to the matter to be included in the Auditors Report under Section 197(16) of the Act:

We draw attention to Note 51 to the standalone financial statements, relating to Managerial Remuneration accrued by the Company for the financial year ended March 31,

2020 which exceeds the limits prescribed under Section 197 of the Companies Act, 2013 by 982 lakh, and hence, is subject to the approval of the shareholders in the forthcoming annual general meeting. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us. Our opinion is not modified in respect of this matter.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W/W-100022
Adhir Kapoor
Partner
Place: New Delhi Membership No.: 098297
Date: June 8, 2020 ICAI UDIN.: 20098297AAAABK1997

Annexure A referred to in our independent Auditors Report to the members of PVR Limited on the standalone financial statements for the year ended March 31, 2020

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

full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years.

In our opinion, this periodicity of physical verification

by management is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets were physically verified by the management during the year. As informed to us, no material discrepancies were noted on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records

of the Company, the title deeds of the immovable properties of land and buildings which are freehold, are held in the name of the Company, except leasehold land situated at Chennai, Tamil Nadu amounting to (gross block) 797 lakh as at March 31, 2020, the conveyance deed in respect of which is in the name of SPI Cinemas Private Limited, which was acquired pursuant to the Scheme of merger approved by the National Company Law Tribunal. Due to the merger, the mutation of name is pending in the favor of the Company.

(ii) According to the information and explanations given to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable having regard to the size of the Company and nature of its business. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly adjusted in the books of account.

(iii) According to the information and explanations given to us, the Company has granted loans to companies and an other party covered in the register maintained under Section 189 of the Companies Act, 2013.

a) In our opinion, the rate of interest and other terms and conditions on which the loans had been granted

to the companies and an other party listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company;

b) The said companies and an other party have been regular in repayment of principal, which are payable on demand. Further, the said companies and an other party has been regular in payment of interest;

c) There are no overdue amounts in respect of the loans granted to the companies and other party listed in the register maintained under Section 189 of the Act.

According to the information and explanations given to us, the Company has not granted any loans, secured or

unsecured, to firms or limited liability partnerships covered in the register maintained under Section 189 of the Act.

(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 in respect of grant of loans and making investments, as applicable. Moreover, the Company has not provided any guarantee or security as specified under Section 185 and 186 of the Companies Act, 2013.

(v) As per the information and explanations given to

us, the Company has not accepted any deposits as mentioned in the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under. Accordingly, the provisions of paragraph 3(v) of the Order are not applicable to the Company.

(vi) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under Sub-section (1) of Section 148

of the Companies Act, 2013, for any of the services rendered or goods sold by the Company. Accordingly, the provisions of paragraph 3(vi) of the Order are not applicable to the Company.

(vii) (a) According to the information and explanations given to

us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employees state insurance, income-tax, goods and services tax, duty of customs, value added tax, cess and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities, though there has been delay in deposit income tax. Further, income-tax (tax deducted at source) for the month of March 2020 has not been deposited as the Company has availed relaxation provided under the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 in respect of such amount.

As explained to us, the Company did not have any dues on account of duty of excise, sales tax and service tax.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income-tax, goods and services tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at March 31, 2020 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues in respect of income- tax, goods and services tax, service tax, duty of customs and value added tax which have not been deposited on account of any dispute as at March 31, 2020, except for the following:

Name of the Statute Nature of the dues Period to which the amount relates Forum where dispute is pending Amount ( in lakh) Amount paid under protest ( in lakh)
Income-tax Act, 1961 Income-tax AY 2006-07, AY 2009-10 and AY 2011-12 High Court 54 10
Income-tax Act, 1961 Income-tax AY 2007-08 to AY 2015-16 Income Tax Appellate Tribunal (ITAT) 1,221 800
Income-tax Act, 1961 Income-tax AY 2010-11, AY 2012-13 and AY 2014-15 to AY 2017-18 Commissioner of Income Tax (Appeals) 1,460 249
Finance Act, 1994 Service tax FY 2007-08 to FY 2017-18 Customs Excise and Service Tax Appellate Tribunal (CESTAT) 9,332 434
Finance Act, 1994 Service tax FY 2013-14 and FY 2015-16 to FY 2017-18 Commissioner 6,032

-

UP VAT Act, 2007 / HVAT Act, 2003/ Rajasthan VAT Act, 2003/ Maharashtra VAT Act, 2002 / KVAT Act, 2003 Value Added Tax FY 2010-11 to FY 2012-13 and FY 2014-15 to FY 2016-17 Tribunal / Commissioner (Appeals)/ Commissioner 407 21

(viii) In our opinion and according to the information and explanations given to us and on the basis of records examined by us, the Company has not defaulted in repayment of loans or borrowings to banks and dues to debenture holders.

Further, the Company did not have any outstanding loans

or borrowings from financial institutions or government during the year.

(ix) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records

of the Company, during the current year, the Company has raised money by way of Qualified Institutional Placement (QIP). The proceeds from QIP were 50,000 lakh. The proceeds of the issue (net of related expense of INR 1,023 lakh) are to augment for growth and expansion, corporate general purpose, working capital requirement and repayment of outstanding loan. The proceeds of 6,000 lakh pending utilisation for the objects of QIP, have temporarily been invested in interest bearing liquid instrument. The Company did not raise any money by way of further public offer (including debt instruments) during the year and the term loan raised during the year have been applied for the purposes for which they were raised.

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

(xi) According to the information and explanations given to us and on the basis of our examination of records

of the Company, Managerial Remuneration accrued for the two executive directors of the Company is in excess of the limits specified under Section 197 of the Act read with Schedule V to the Act by 982 lakh. The Company is in the process of obtaining approval from shareholders at the forthcoming annual general meeting for such excess remuneration (refer note 51 of the standalone financial statements).

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

(xiii) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records

of the Company, the transactions with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the standalone financial statements as required by the accounting standards.

(xiv) According to the information and explanations given to us and on the basis of our examination of the records

of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to

us, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, the provisions of paragraph 3(xv) of the Order are not applicable to the Company.

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

For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W/W-100022
Adhir Kapoor
Partner
Place: New Delhi Membership No.: 098297
Date: June 8, 2020 ICAI UDIN.: 20098297AAAABK1997

Annexure B to the independent Auditors Report on the standalone financial statements of PVR Limited for the year ended March 31, 2020

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

(Referred to in paragraph (1) (A) (f) under Report on Other Legal and Regulatory Requirements section of our report of even date)

Opinion

We have audited the internal financial controls with reference to standalone financial statements of PVR Limited (the Company) as of March 31, 2020 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and such internal financial controls were operating effectively as at March 31, 2020, based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the Guidance Note).

Managements Responsibility for Internal Financial Controls

The Companys management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to 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 (hereinafter referred to as the Act).

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to standalone financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit

to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements were established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness.

Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone 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 with reference to standalone financial statements.

Meaning of Internal Financial Controls with Reference to Standalone Financial Statements

A Companys internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial controls with reference to standalone financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone 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 standalone financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial controls with reference to

standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W/W-100022
Adhir Kapoor
Partner
Place: New Delhi Membership No.: 098297
Date: June 8, 2020 ICAI UDIN.: 20098297AAAABK1997