Speciality Restaurants Ltd Directors Report.

To the Members of Speciality Restaurants Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of Speciality Restaurants Limited ("the Company"), which comprise the Balance Sheet as at March 31 2020, 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 standalone Ind AS 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 Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2020, its loss including other comprehensive loss, its cash flows and the changes in equity and 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 SAs 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 (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Emphasis of matter

We draw attention to Note 38 and Note 39 to the standalone financial statements, which describes the possible effect of uncertainties relating to COVID-19 pandemic on the Companys financial performance as assessed by the management and has recognised i) impairment of assets amounting to Rs. 254.45, ii) impairments of Rights of use asset amounting to Rs. 164.54 Millions, iii) gain on lease modification/ termination amounting to Rs. 145.21 Millions, reflected as "Exceptional Item". The consequential impact may be different from that estimated as at the date of approval of these financial statements and the Company will continue to closely monitor any material changes based on future economic conditions as a result of the COVID-19 pandemic.

Our opinion is not modified in respect of the above matters.

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, 2020. 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
Revenue recognition - Refer Note 19 of the standalone Ind AS financial statements
The Company recognizes revenue when the control of goods being sold is transferred to the customer. The Companys revenue relates to restaurant and confectionary sales and services to customers. We have carried out following audit procedure:
• Assessed the appropriateness of the accounting policy for revenue recognition as per the relevant accounting standards
• Evaluated the design and implementation of key internal financial controls and their operating effectiveness with respect to revenue recognition transactions selected on a sample basis
Due to high level of transaction across various units, situated across India, there exists a risk of misstatement of the timing and amount of revenue recognized to achieve specific performance targets or expectations. The Company also has franchisee arrangements and revenue share arrangements for royalty/ fee based on sales.
• Performed substantive testing of sales by selecting samples of sales made at certain restaurants using statistical sampling and tested the underlying documentation including kitchen order tickets
• Reviewed the reconciliation of revenue recorded for the year with collections through cash, credit card and aggregators, as applicable to confirm that revenue recorded is supported by collections
The Company and its external stakeholders focus on revenue as a key performance indicator, which could lead to recognition of revenue without meeting the revenue recognition criterion.
Key audit matters How our audit addressed the key audit matter
In view of the above we have identified revenue recognition as a key audit matter. • Perused selected samples of key contracts with aggregators and franchisees to understand the terms and conditions particularly relating to revenue share, royalty & fee payments
• Evaluated whether the disclosures included in the notes to the financial statements are in conformity with the applicable standard
Goins Concern (Refer Note 38 of standalone Ind AS Financia Statement)
The Company operates restaurants mainly in metro cities of India and all restaurants of the Company were nonoperational during the COVID-19 Lockdown Phase-I. We have carried out following audit procedure
• Obtained an understanding of controls instituted by the management to assess going concern assumptions and tested the effectiveness of the management controls
The Company has assessed the potential impact of COVID-19 on the carrying value of assets, business plan, renegotiation of lease arrangements and future cash flow projections and evaluated various scenario for assessment of Going Concern. This has been considered as Key Audit Matter as there are uncertainties which have been analyzed by the Company, however since the situations are continuously evolving, the impact assessed may be different from the estimates.
• Testing of managements assumptions on the appropriateness of the going concern assumption and reasonableness of the assumptions used, focusing in particular, the business plans, projections, liquidity management, recoverability and impairment of assets of the Company
• Analyzed managements report to gain an understanding of the inputs and processes supporting the cash flow projections prepared for the purpose of going concern assessment
• Assessed the appropriateness of the related disclosures in the notes to financial statements
Impairment of assets (Exceptional Item) (Refer Note 39 of standalone Ind AS Financial Statement)
Due to COVID -19, the Company has decided to shut down certain restaurants, terminated lease arrangements and evaluated change of business plans. We have carried out following audit procedure
• Analyzed the impact of COVID-19 lockdown on the operations of the Company.
The Company has carried out impairment testing of its assets and has booked impairment loss of Rs. 418.99 Millions, which has been reflected as "Exceptional Item", refer note 39. • Assessed the internal controls designed for identification of impairment indicators.
• Reviewed the procedure for identification and testing impairment assessment.
The assessment of the recoverable amount requires significant judgment, in particular, relating to estimated cash flow projections and discount rates. Due to the level of judgments involved, impact of COVID-19 on Hospitality Industry and significance to the Companys financial position, this is considered to be a key audit matter.
• Evaluated the appropriateness of the Companys judgment regarding identification of assets considered for impairment.
• Obtained understanding of the key assumptions considered for assessment of future cash flows and the discounting factor considered.
• Assessed the disclosures made in the standalone Ind AS financial statement.
Ind AS 116 Leases (Refer Note 4b and Note 30 of Standalone Ind AS Financial Statement)
Ind AS 116 Leases is effective for the accounting period commencing 1 April 2019. Ind AS 116 has had a significant impact on the reported assets, liabilities and the income statement of the Company. Impact of the Ind AS 116 transition is reliant upon a number of key estimates, determining the appropriate discount rates and determination of ShortTerm Leases or Leases with variable terms, which are not considered. We have carried out following audit procedure
• Assessed the design and implementation of the key controls relating to the determination of the Ind AS 116 transition impact disclosure.
• Assessed the discount rates used to calculate the lease obligation.
• Assessed the accuracy of the lease data by testing the lease data captured by management for a sample of leases through the inspection of lease documentations.
There is a risk that the lease data which is used in the calculation of Ind AS 116 transition calculation is incomplete or inaccurate. • Tested the completeness of the lease data by reconciling the Companys existing lease commitments to the lease data used in the Ind AS 116.
The Company has terminated certain Lease arrangement either on completion of lease terms, or unviability of the restaurant due to COVID-19 or otherwise. Reversal of ROU and Lease liability for such leases should be accurate and in compliance with relevant accounting standard. • Verification of the data for recognition of lease liability, right of use assets, depreciation and interest.
• Evaluated whether the disclosures included in the notes to the financial statements are in conformity with the applicable standard.
In view of the above, this is considered as a key audit matter.

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 Companys Annual report, but does not include the standalone Ind AS financial statements and our auditors report thereon.

Our opinion on the standalone Ind AS 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 Ind AS 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 during the course of audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management for the standalone Ind AS Financial Statements

The Companys Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these 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 Ind AS. 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 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, the 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.

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

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2020 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.

Other Matter

Due to COVID-19 related lock-down restrictions, management was able to perform year end physical verification of Inventories, subsequent to the year end. Also, we were not able to physically observe the stock verification, where carried out by management. Consequently, we have performed alternate procedure to audit the existence of inventory as per the guidance provided in SA 501 "Audit Evidence - Specific Consideration for Selected Items" and have obtained sufficient appropriate audit evidence to issue our unmodified opinion on these Standalone Ind AS Financial Statement.

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 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 and 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 and 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 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 B" to this report;

(g) With respect to the matter to be included in the Auditors Report under Section 197(16) of the Act, 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 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 27 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. No amount was required to be transferred to the Investor Education and Protection Fund by the Company during the year.

For Singhi & Co.
Chartered Accountants
Firm Registration Number: 302049E
Sukhendra Lodha
Partner
Place: Mumbai Membership No:071272
Date: 23 July, 2020 UDIN:20071272AAAABG4313

Annexure - A to the Independent Auditors Report

(Referred to in paragraph 1 with the heading Report on Other Legal and Regulatory Requirements section of our report of even date)

We report that:

i. In respect of its property, plant and equipment:

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

b) As explained to us, the property, plant and equipment have been physically verified by management at reasonable interval under a phase programme of verification and no material discrepancies have been noticed on such verification. In our opinion this periodicity of physical verification is reasonable having regard to the size of company and nature of its assets.

c) According to the information and explanations given to us and on the basis of our examination of the registered sale deed in case of free hold land, we report that, title deeds comprising all the immovable properties of land which are freehold, are held in the name of the Company as at the balance sheet date. In respect of leasehold land, building being constructed thereon and disclosed as right of use assets are in name of the Company.

ii. As explained to us, the physical verification of inventories has been conducted by the management at reasonable intervals during the year (including the verifications conducted by the Management post year end on account of the lockdown). The discrepancies noticed on physical verification of inventories as compared to books records were not material and have been properly dealt in the books of accounts.

iii. According to the information and explanations given to us, the Company had granted loans in the earlier years to a Company covered in the register maintained under section 189 of the Companies Act, 2013.

• At the time of the grant of the loan, the terms and conditions of such loans were, in our opinion, prima facie, not prejudicial to the Companys interest.

• Repayment of interest has not been regular. Principal of Rs. 76.73 Million and interest of Rs. 7.34 Million is outstanding for more than 90 days. On account of continuing losses incurred by the borrowing company the entire amount of the loan and interest had been provided as doubtful and charged to the Statement of Profit and Loss.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provision of Section 185 and 186 of the Companies Act, 2013 in respect of grant of loans and investments made. The Company has not provided any guarantee and securities.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of provisions of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) rules 2014 (as amended).

vi. Having regards to the nature of the Companys business/ activities, we are of the opinion that maintenance of cost accounting records has not been prescribed.

vii. According to the information and explanations given to us and the records of the Company examined by us:

a) The Company has been generally regular in depositing amounts deducted/accrued in the books of accounts in respect of undisputed statutory dues, including Provident Fund, Employees State Insurance, Investor Education and Protection Fund, Income tax, Custom Duty, cess, Goods & Service Tax and other statutory dues, as applicable, except for some minor delay in case of payment of Tax Deducted at Source.

b) No undisputed amount payable in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess, Goods & Service Tax and other material statutory dues is outstanding as at 31st March 2020, for a period of more than six months from the date they became payable except as mentioned below.

Name of the Statue Period to which the amount relates Amount unpaid (Rs In Millions)
Goods and Service Tax Act, 2017 FY 2018-19 1.82

c) There are no dues of Income tax, sales tax, Wealth tax, Service tax, Customs duty, Excise duty and Cess, Goods & Service Tax which have not been deposited with the appropriate authorities on account of any dispute, except as mentioned below:

Name of the Statue Nature of Dues Period to which the amount relates Forum where dispute is pending Amount in dispute (Rs In Millions)
Income Tax Act, 1961 Income Tax 2011-12 Commissioner of Income Tax 0.92
Bombay Sales Tax Act, 1959 Sales Tax 1999-00 Sales Tax Appellate Tribunal 0.11
Telangana Value Added Tax Act, 2005 Value Added Tax 2016-18 Additional Commissioner of Sales Tax 0.81
Name of the Statue Nature of Dues Period to which the amount relates Forum where dispute is pending Amount in dispute (Rs In Millions)
Central Sales Tax Act, 1956 Sales Tax 2008-10 Deputy Commissioner of Sales Tax (Appeal) 6.98
Central Sales Tax Act, 1956 Sales Tax 2011-13 Appellate Tribunal 15.46
Central Sales Tax Act 1956 Sales Tax 2013-16 Joint Commissioner of Sales Tax (Appeal) 26.85
Maharashtra Value Added Tax 2002 Value Added Tax 2008-10 Deputy Commissioner of Sales Tax (Appeal) 1.16
Maharashtra Value Added Tax 2002 Value Added Tax 2011-13 Appellate Tribunal 12.44
Maharashtra Value Added Tax 2002 Value Added Tax 2013-16 Joint Commissioner of Sales Tax (Appeal) 36.19
Andhra Pradesh VAT Act 2005 Value Added Tax 2012-16 Appellate Deputy Commissioner 1.89
Finance Act, 1994 Service Tax 2012-18 Commissioner Service Tax 195.62

viii. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not defaulted in repayment of loans or borrowings to any financial institution, bank or Government. The Company had neither any outstanding debenture at the beginning of the year nor has it issued any debenture during the year.

ix. According to the information and explanations given to us and based on our examination of the records of the Company, the money raised by way of initial public offer in the earlier year and the term loan have been applied by the Company during the year for the purposes for which they were raised or as per the purposes revised with the appropriate authority, other than temporary deployment pending application of proceeds. As on balance sheet date, amount has been utilised.

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 year.

xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

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

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable Indian 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 any preferential allotment or private placement of shares or fully or partly convertible debentures. Accordingly, paragraph 3 (xiv) of the Order is not applicable to the Company.

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

xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly, paragraph 3 (xvi) of the Order is not applicable to the Company.

Annexure - B to the Independent Auditors Report

(Referred to in paragraph 2(A)(f) with the heading Report on Other Legal and Regulatory Requirements section of our report of even date)

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

1. We have audited the internal financial controls over financial reporting of Josts Engineering Company Limited (the Company) as of 31st March 2020 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

2. The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

3. Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the Guidance Note) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both 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 with reference to financial statements were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with respect to standalone Ind AS financial statements and their operating effectiveness. Our audit of internal financial controls with respect to standalone financial statements included obtaining an understanding of internal financial controls with respect to standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system with respect to standalone financial statements

Meaning of Internal Financial Controls over Financial Reporting with reference to Standalone Financial Statements

6. A Companys internal financial control over financial reporting with reference to these standalone 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 control with respect to financial statements 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 authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting with reference to Standalone Financial Statements

7. Because of the inherent limitations of internal financial controls over financial reporting with reference to these 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 respect to standalone financial statements 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

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting were operating effectively as at March 31, 2020, based on the internal control 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.