Sobha Ltd Auditors Report.

Independent Auditor

To the Members of Sobha Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the standalone financial statements of Sobha Limited ("the Company"), which comprise the standalone balance sheet as at 31 March 2019, 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.

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 31 March 2019, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the 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.

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

A. Revenue recognition - refer note 2.2 (a) (ii)(a) to the standalone financial statements

Key Audit Matter How the matter was addressed in our audit
Measurement of revenue recorded from sale of residential units Our audit procedures on revenue recognition included the following:
Revenues from sale of residential units represents the largest portion of the total revenues of the Company. • Evaluating that the Companys revenue recognition accounting policies are in line with the applicable accounting standards and their application to customer contracts including consistent application;

A. Revenue recognition (continued) - refer note 2.2 (a) (ii)(a) to the standalone financial statements

Key Audit Matter How the matter was addressed in our audit
Revenue is recognised upon transfer of control of residential units to customers for an amount that reflects the consideration which the Company expects to receive in exchange for those units. The point of revenue recognition is normally on handover of the unit to the customer on completion of the project, post which the contract becomes non-cancellable by the parties. The Company records revenue at a point in time upon transfer of control of residential units to the customers. • Identify and test operating effectiveness of key controls around approvals of contracts, milestone billing, intimation of possession letters and controls over collection from customers;
• For samples selected, verifying the underlying documents - handover letter, sale agreement signed by the customer and the collections;
• Revenue recognition cut-off procedures for determination of revenue in the appropriate reporting period;
Due to the large volume of the Companys projects, spread across different regions within the country and the competitive business environment, there is a risk that revenue could be overstated (for example, through premature revenue recognition i.e. recording revenue prior to handover of unit to the customers) or understated (for example, through improperly shifting revenues to a later period) in order to present consistent financial results. Since revenue recognition has direct impact on the Companys profitability, there is a possibility of management bias. • Conducting site visits during the year for selected projects to understand the scope, nature and status of the projects and to assess the progress of the projects; and
• Considered the adequacy of the disclosures in note 2.2(a)(ii)(a) to the standalone financial statements in respect of the judgments taken in recognising revenue for residential units.
Measurement of revenue recorded over time which is dependent on the estimates of the costs to complete Our audit procedures on revenue recognition included the following:
Revenue recognition from contractual projects represents a significant portion of the total revenues of the Company. • Evaluating that the Companys revenue recognition accounting policies are in line with the applicable accounting standards and their application to customer contracts including consistent application;
Revenue recognition from contractual projects involves significant estimates related to measurement of costs to complete the projects. Revenue from projects is recorded based on managements assessment of the work completed, costs incurred, and accrued and the estimate of the balance costs to complete. • For samples selected during the year, verifying the underlying documents - contracts entered into with customers, invoices raised and collections from the customers;
• Review of the costs to complete workings, comparing the costs to complete with the budgeted costs and inquiring into reasons for variance;

A. Revenue recognition (continued) - refer note 2.2 (a) (ii)(a) to the standalone financial statements

Key Audit Matter How the matter was addressed in our audit
Due to the inherent nature of the projects and significant judgment involved in the estimate of costs to complete, there is risk of overstatement or understatement of revenue. • Sighting approvals for changes in budgeted costs with the rationale for the changes; and
• Assessment of nature of costs taken to inventory.

B. Inventories - refer note 3(b)(iii) to the standalone financial statements

Key Audit Matter How the matter was addressed in our audit
Assessment of net realisable value (NRV) of inventories Our audit procedures to assess the net realisable value (NRV) of inventories included the following:
Inventories comprising raw materials and components, building materials, land stock, work- in-progress, stock-in-trade flats and finished goods represents a significant portion of the Companys total assets. • Discussion with the management to understand the basis of calculation and justification for the estimated recoverable amounts of the unsold units ("the NRV assessment");
The Company recognises profit on each sale by reference to the overall project margin. A project comprises multiple units, the construction of which can last a number of years. The recognition of profit for sale of a unit, is therefore dependent on the estimate of future selling prices and construction costs. Further, estimation uncertainty and exposure to cyclicality exists within long- term projects. • Evaluating the managements valuation methodology and assessing the key estimates, data inputs and assumptions adopted in the valuations, which included comparing expected future average selling prices with available market data such as recently transacted prices for similar properties located in the nearby vicinity of each property development project and the sales budget plans maintained by the Company; and
Forecasts of future sales are dependent on market conditions, which can be difficult to predict and be influenced by political and economic factors. • Verifying the NRV assessment and comparing the estimated construction costs to complete each development with the Companys updated budgets.
Further due to their materiality in the context of total assets of the Company this is considered significant to our overall audit.

C. Land advances - refer note 3(b)(iii) to the standalone financial statements

Key Audit Matter How the matter was addressed in our audit
Assessment of recoverability of land advances Our audit procedures to assess the recoverability of land advances included the following:
Land advance represents a sizeable portion of the Companys total assets. • For our samples, verified the underlying agreements in possession of the Company, based on which land advances were given;

C. Land advances (continued) - refer note 3(b)(iii) to the standalone financial statements

Key Audit Matter How the matter was addressed in our audit
Land advance represents the amount paid towards procurement of land parcels to be used in the future, for construction of residential projects. These advances are carried at cost less impairment losses, if any. These land advances will be converted into land parcels as per the terms of the underlying contracts under which these land advances have been given. To assess the carrying value of land advances, these advances are tested for recoverability by the Company by comparing the valuation of land parcels in the same area for which land advances have been given. • Discussion with the management to understand their plan for conversion of these land advances into land parcels; and
• For our samples, verified the valuation reports of land stock.
Further due to their materiality in the context of total assets of the Company this is considered significant to our overall audit.

D. Investment in subsidiaries - refer note 2.2(h) to the standalone financial statements

Key Audit Matter How the matter was addressed in our audit
Assessment of impairment of investment Our audit procedures to assess recoverability included the following:
The carrying amount of the investments in subsidiaries held at cost less impairment represents a significant portion of the Companys total assets. • Comparing the carrying amount of investments in the Companys books, with the relevant subsidiaries audited balance sheet and joint ventures unaudited balance sheet, to identify whether their net assets (being an approximation of their minimum recoverable amount) were in excess of their carrying amount;
The Company has investments in subsidiaries and a joint venture. These investments are carried at cost less any diminution in value of such investments. • Assess whether those subsidiaries and joint venture have historically been profit-making;
The investments are reviewed for impairment at each reporting date by comparing the carrying value of investments in the Companys books with the net assets of the relevant subsidiaries and joint ventures balance sheet. Further, the Companys review includes assessment of the projected cash flows of the real estate projects in these underlying entities, which involve significant estimates and judgment, due to the inherent uncertainty involved in forecasting future cash flows. There is significant judgment in estimating the timing of the cash flows and the appropriate discount rate. • For the investments where the carrying amount exceeded the Companys share in net asset value, we compared the carrying amount of the investment with the projected cash flows and profitability based on approved business plans of the subsidiaries and joint venture; and
In addition, considering the materiality of the investments in subsidiaries and joint venture, vis-a-vis the total assets of the Company, this is considered to be significant to our overall audit. • Considering the adequacy of disclosures in respect of the investment in subsidiaries and joint venture.

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. The annual report is expected to be made available to us after the date of this auditors report.

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 financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained 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.

Managements 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 and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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, 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 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 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 financial statements in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of 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 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 31 March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of Section 164(2) of the Act; and

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

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

i. The Company has disclosed the impact of pending litigations as at 31 March 2019 on its financial position in its standalone financial statements - Refer Note 38 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 financial statements since they do not pertain to the financial year ended 31 March 2019.

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

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

for B S R & Co. LLP

Chartered Accountants

ICAI Firm registration number: 101248W/W-100022

Supreet Sachdev

Partner

Membership number: 205385

Bangalore

17 May 2019

Annexure A to the Independent Auditors’ Report on the standalone financial statements of Sobha Limited (‘the Company’)

The Annexure A referred to in our report to the members of the Company for the year ended 31 March 2019.

We report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of all 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 3 years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, certain fixed assets were physically verified during the year. No material discrepancies were noticed on such verification.

(c) 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 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 such verification is reasonable. The discrepancies noticed on verification between physical stock and the book records were not material.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 ("the Act"). Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act, with respect to investments made and guarantees given. Further, there are no loans and security given in respect of which provisions of Sections 185 and 186 of the Act are applicable.

(v) The Company has not accepted any deposits from the public within the meaning the directives issued by the Reserve Bank of India, provisions of Section 73 to 76 of the Act, any other relevant provisions of the Act and the relevant rules framed thereunder.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 148 of the Act in respect of the construction industry and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(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 service tax, duty of customs, cess and any other material statutory dues have generally been regularly deposited with the appropriate authorities. As explained to us, the Company did not have any dues on account of sales-tax, service-tax, duty of excise and value added tax during the year.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income-tax, goods and service tax, duty of customs, cess and any other material statutory dues were in arrears, as at 31 March 2019, for a period of more than six months from the date they became payable. As explained to us, the Company did not have any dues on account of sales-tax, service-tax, duty of excise and value added tax during the year.

(b) According to the information and explanations given to us, there are no dues of income tax or sales tax or service tax or value added tax or goods and service taxes or duty of customs or duty of excise which have not been deposited by the Company on account of disputes except for the following:

Nature of statue Nature of dues Amount (Rs in

million) *

Period to which amount relates Forum where dispute is pending
Andhra Pradesh Sales Tax Act Basis of charge of sales tax 2.05 2002-05 High Court of Andhra Pradesh
Karnataka Sales Tax Act Basis of charge of sales tax 127.27 2007-08 High Court of Karnataka
Karnataka Sales Tax Act Basis of charge of sales tax 25.60 2008-09 High Court of Karnataka
Karnataka Sales Tax Act Basis of charge of sales tax 27.62 2009-10 High Court of Karnataka
Karnataka Sales Tax Act Basis of charge of sales tax 67.71 2010-11 High Court of Karnataka
Karnataka Sales Tax Act Basis of charge of sales tax 43.98 2011-12 High Court of Karnataka
Karnataka Sales Tax Act Basis of charge of sales tax 64.63 2013-14 High Court of Karnataka
Karnataka Sales Tax Act Basis of charge of sales tax 43.52 2014-15 High Court of Karnataka
Karnataka Sales Tax Act Basis of charge of sales tax 11.71 2012-13 High Court of Karnataka
Kerala Sales Tax Act Basis of charge of sales tax 29.66 2013-14 District Commissioner - (Appeals) Thiruvananthapuram
Kerala Sales Tax Act Basis of charge of sales tax 23.52 2011-12 District Commissioner - (Appeals) Thiruvananthapuram
Haryana Sales Tax Act Basis of charge of sales tax 1.28 2011-12 Commissioner Appeal, Gurgaon
Maharashtra Value Added Tax Act Basis of charge of sales tax 5.87 2008-09 Joint Commissioner of Sales Tax appeal, Pune
Maharashtra Value Added Tax Act Basis of charge of sales tax 6.22 2010-11 Joint Commissioner of Sales Tax appeal, Pune
Maharashtra Value Added Tax Act Basis of charge of sales tax 2.91 2009-10 Joint Commissioner of Sales Tax appeal, Pune
Maharashtra Value Added Tax Act Basis of charge of sales tax 1.43 2010-11 Joint Commissioner of Sales Tax appeal, Pune
Maharashtra Value Added Tax Act Basis of charge of sales tax 0.34 2008-09 Joint Commissioner of Sales Tax appeal, Pune
Maharashtra Value Added Tax Act Basis of charge of sales tax 0.38 2011-12 Commissioner of Central Tax, Pune
Maharashtra Value Added Tax Act Basis of charge of sales tax 3.93 2013-14 Commissioner of Central Tax, Pune
Kolkata Value Added Tax Act Basis of charge of sales tax 1.00 2009-10 West Bengal Commercial Taxes appellate, Kolkata
Finance Act, 1994 (service tax provisions) Disallowance 1.18 2002-07 Central Excise and Service Tax Appellate Tribunal, Bangalore
Finance Act, 1994 (service tax provisions) Service tax demand 370.46 2006-12 Central Excise and Service Tax Appellate Tribunal, Bangalore
Finance Act, 1994 (service tax provisions) Service tax demand 2.36 2006-12 Central Excise and Service Tax Appellate Tribunal, Bhiwadi district
Finance Act, 1994 (service tax provisions) Service tax demand 93.86 2008-16 Commissioner of Central Tax, GST Commissioner, Bangalore
Finance Act, 1994 (service tax provisions) Service tax demand 0.33 2008-11 Commissioner of Central Excise and Service Tax (Appeals), Bangalore
Excise duty Excise duty demand 6 2013-15 Central Excise and Service Tax Appellate Tribunal, Bangalore
Customs Act, 1962 Differential tax treatment 1.27 2010-11 Central Excise and Service Tax Appellate Tribunal, Bangalore
Income tax Act Disallowance 108.05 2005-08 Assistant Commissioner of Income tax, Bangalore
Income tax Act Disallowance 72.06 2007-15 Income Tax Appellate Tribunal, Bangalore

* Net of 543.01 million in total, paid under protest

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to financial institutions and banks and debenture holders during the year. The Company did not have any outstanding loans or borrowings from government during the year.

(ix) According to the information and explanations given to us and based on examination of the records of the Company, the term loans obtained during the year were applied for the purpose for which they were obtained. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year.

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

(xi) According to the information and explanations given to us and based on examination of the records of the Company, the Company has paid managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us, in our opinion, the Company is not a Nidhi Company as prescribed under Section 406 of the Act.

(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 Sections 177 and 188 of the Act, where applicable, and details of all transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made 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 and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him.

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

forB S R & Co. LLP

Chartered Accountants

ICAI Firm registration number: 101248W/W-100022

Supreet Sachdev

Partner

Membership number: 205385

Bangalore

17 May 2019

Annexure B to the Independent Auditors’ Report on the standalone financial statements of Sobha Limited (‘the Company’) for the year ended 31 March 2019

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 (f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

Opinion

We have audited the internal financial controls with reference to financial statements of Sobha Limited ("the Company") as of 31 March 2019 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 financial statements and such internal financial controls were operating effectively as at 31 March 2019, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "Guidance Note").

Management’s Responsibility for Internal Financial Controls

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

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the 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 financial statements.

Meaning of Internal Financial controls with Reference to Financial Statements

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

Inherent Limitations of Internal Financial controls with Reference to Financial Statements

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

forB S R & Co. LLP

Chartered Accountants

ICAI Firm registration number: 101248W/W-100022

Supreet Sachdev

Partner

Membership number: 205385

Bangalore

17 May 2019