Va Tech Wabag Ltd Directors Report.

To the members of VA Tech Wabag Limited

REPoRT oN ThE AudIT oF ThE STANdALoNE FINANCIAL STATEMENTS

opinion

We have audited the accompanying standalone financial statements of VA Tech Wabag Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date, and notes to the standalone financial statements, including a summary of 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 ("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 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 31 March 2021, its profit and total comprehensive income, its cash flows and changes in equity for the year ended on that date.

Basis for opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing ("Standards") specified under section 143(10) of the Act. Our responsibilities under those Standards 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 ("ICAI") 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 made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s 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.

Emphasis of Matter a. We draw reference to the note 45 of the standalone financial statements which describes that the Company has been executing projects for Andhra Pradesh Power Generation Corporation Limited and Telangana Power Generation Corporation Limited as part of a consortium.

The Company took over the projects as consortium leader in 2014-15 and a corporate insolvency resolution process was ordered against the erstwhile consortium lead member Tecpro Systems Limited (‘Tecpro’) in 2017-18. The net receivables on these projects of INR 42,770 lakhs, its status and process of recoverability is explained in the aforementioned note. Our opinion is not modified in this regard. b. We draw reference to note 46 of the standalone financial statements, wherein the Company has disclosed impact assessment due to COVID-19 pandemic. As stated in the said note, such impact assessment done by the Company’s management is dependent on the circumstances as they evolve in subsequent periods. Our opinion is not modified in this regard.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significant 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. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter description and principal audit procedures
1 Revenue recognition
Refer Notes 3.4, 15 and 25 in standalone financial statements
The Company recognises revenue and margin on the stage of completion based on the proportion of contract costs incurred relative to the estimated total costs of each contract (referred to as ‘percentage of completion method’). The recognition of revenue and margin therefore relies on estimates in relation to the estimated total costs on each contract. Cost contingencies may also be included in these estimates to take account of specific uncertain risks arising within each contract. These cost estimates are reviewed by the Company on a regular basis during contract execution and adjusted where appropriate. There is significant judgement by the management of the Company in estimating the amount of revenue and margin to be recognised by the Company up to the balance sheet date and changes to these estimates could give rise to material variances, hence revenue recognition has been considered as a key audit matter.
Our procedures include the following:
Evaluate and test key controls in the management processes in relation to recognition of revenue and margin including:
- the preparation, review and authorisation of contract review sheets for contracts which contains estimated total costs for the contracts including cost contingencies
- the project reviews that are undertaken by the Company’s management
- the controls in relation to accrual of cost towards materials and services
Recalculate revenue recognised under the percentage of completion method on a test basis
Evaluate the financialperformance of contracts against budget / earlier year estimates and obtain reasons for significant variances thereto.
Test the contract value, costs incurred to date including the costs accrued for work completed, total estimated contract costs for a sample of contracts selected based on factors such as value of contracts, material new contracts and contracts where significant risks have been identified by the management of the Company.
Conduct site visits on a test basis to confirm our understanding of the risks and controls at site level.
Review the management’s assessment of pre-GST taxes adjustment for projects where it is under finalisation with customers.
2 dues from customers (unbilled) and Trade receivables
Refer Notes 3.10, 6, 15, 35 and 45 in standalone financial statements
The Company measures revenue to be recognised based on the contract costs incurred till the reporting date over the total estimated costs for each contract. Such revenue recognised in excess of progress billing till the reporting date is presented as ‘Dues from customers’ which are yet to be billed to the customers. Such Dues from customers are accounted based on the contractual terms and management’s assessment of recoverability from customers. Management also assesses the recoverability of Trade receivables including those which have remained unsettled beyond contractual credit period using judgement and past collection trends in similar contracts and customers. The management of the Company estimates and recognises allowance for expected credit losses on Trade receivables and Dues from customers which involves estimation of expected default and/or delay in the customer making payment over the duration of the contract and realisability of Dues from customers, considering the past trend and its assessment on the reporting date. The valuation of Dues from customers and Trade receivables involves significant management judgement and estimates as stated above, and hence it has been considered as a key audit matter.
Our procedures include the following:
Evaluate management’s processes and controls in respect of Dues from customers and Trade receivables for the following,
- risk assessment pertaining to invoicing and recoverability
- assessment of the probability of default and delay
- assessment of the significant increases in credit risk, if any
Request confirmation of balances from customers having significant outstanding balances as at the reporting date
Review the project progress, invoicing and collection history of customers with significant Dues from customers or
Trade receivables. Discuss with the project team to understand the management’s assessment of risk associated with recoverability
Analyse the past trend and inquire into the reasonableness of expected credit loss allowance matrix developed by the management of the Company for estimating the allowance for Trade receivables.
Consider the subsequent events and collections in assessing the recoverability of Dues from customers and Trade receivables
Consult legal counsel wherever necessary for legal disputes to assess the valuation of Trade receivables

Information other than the Standalone Financial Statements and Auditor’s Report thereon

The Board of Directors of the Company is responsible for the preparation of the other information. The other information comprises the information included in the Management

Discussion and Analysis, Board’s Report including

Annexures to Board’s Report, Business Responsibility Report and Report on Corporate Governance, but does not include the standalone financial statements and our 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 during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and Those Charged with Governance for the Standalone Financial Statements

The Board of Directors of the Company is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows of the Company in accordance with the Ind AS prescribed under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended and other accounting principles generally accepted in India.

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 judgements 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 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 and error.

In preparing the standalone financial statements, the management of the Company is responsible for assessing the Company’s 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 doubt the Company on the Company’sor to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards 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 Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: identify and assess the risks of material misstatement of the standalone financial statements, We considerwhether 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. deficiencies 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 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 management’s 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 ability may cast significant to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s 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 auditor’s 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

obtain sufficient appropriate audit evidence regarding the financial information of the Company and its joint operations to express an opinion on the standalone financial statements

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. 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 in internal control that we identify anysignificant 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 auditor’s 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 (Auditor’s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in Annexure ‘A’ to this report, a statement on the matters specified in para 3 and 4 of the Order, to the extent applicable.

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 accounts 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 other comprehensive income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this report are in agreement with the books of account

(d) in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended (e) on the basis of the written representations received from the directors as on 31 March 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 from being appointed as a director in terms of Section 164(2) of the Act

(f) with respect to the adequacy of internal financial controls with reference to financial statements of the Company and the operative effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company’s internal financial controls with reference to financial statements

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

(h) With respect to the other matters to be included in the Auditor’s 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, as detailed in Note 43 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position;

ii. the Company did not have any long-term contracts including derivative contracts with material foreseeable losses;

iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

For Sharp & Tannan
Chartered Accountants
(Firm’s Registration No. 003792S)
V. Viswanathan
Partner
Place: Chennai Membership No. 215565
Date: June 05, 2021 UDIN: 21215565AAAACL6298

Annexure A to the Independent Auditor’s Report

With reference to paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the members of VA Tech Wabag Limited of even date, we report the following:

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

(b) The Company has a regular programme of physical verification of its property, plant and equipment under which all property, plant and equipment are physically verified in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its property, plant and equipment. In accordance with this programme, certain property, plant and equipment were physically verified by the management during the year and no material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties which are included under the head ‘Property, plant and equipment’ are held in the name of the Company.

(ii) In our opinion, the management has conducted physical verification of inventories at reasonable intervals during the year and no material discrepancies between physical inventories and book records were noticed on such physical verification.

(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. Accordingly, reporting on clause 3 (iii) of the Order does not arise.

(iv) According to the information and explanations given to us, the Company has not advanced any loan, made any investment, given any guarantee or provided any security to which the provisions of Section 185 and 186 of the Companies Act, 2013 are applicable. Accordingly, reporting on clause 3 (iv) of the Order does not arise.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from public during the year and does not have any unclaimed deposits as at 31 March 2021. Accordingly, reporting under clause 3 (v) of the Order does not arise.

(vi) The Central Government has specified maintenance of cost records under section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 (as amended) for the operations of the Company. We have broadly reviewed the books of account maintained by the Company in respect of Company’s services 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 cost records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company has been generally regular in depositing undisputed statutory dues including provident fund, employees’ state insurance, income-tax, goods and service tax, duty of customs, cess and other material statutory dues applicable to the Company during the year with appropriate authorities except for dues in respect of tax deducted at source of INR 1,345 lakhs, goods and service tax of INR 1,557 lakhs and professional tax of INR 23 lakhs.

According to the information and explanations given to us, there were no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, goods and service tax, duty of customs, cess or other material statutory dues outstanding as at 31 March 2021 for a period of more than six months from the date they became payable

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of income tax, sales tax, service tax and value added tax at 31 March 2021 which have not been deposited with statutory authorities on account of a dispute pending are as under:

Name of the statute Nature of disputed dues Amount involved in dispute (INR in Lakhs) unpaid disputed amount (INR in Lakhs) Period to which amount relates Forum where disputes are pending
Rajasthan Sales Tax Act, 1994 Tax & Penalty 9 9 2003-04, 2009-10 & 2010-11 Tax Assessment Officer
Rajasthan Value Added Tax Act, 2003 Tax & Penalty 33 33 2007-08 & 2009-10 Deputy Commissioner
Karnataka Value Added Tax Act, 2003 Tax & Penalty 24 24 2007-08, 2008-2009 & 2009-10 Deputy Commissioner, Joint Commissioner
Karnataka Value Added Tax Act, 2003 Tax & Penalty 527 527 2015-16 Appeal to be filed
Kerala Value Added Tax Act, 2003 Tax & Penalty 91 62 2008-09, 2010-11 & 2011-12 Appellate Tribunal
Odisha Value Added Tax Act, 2005 & Central Sales Tax Act, 1956 Tax Interest & Penalty 940 864 2012-13 to 2014-15, 2016- 17 & Q1 2017-18 Deputy Commissioner – Appeals
Odisha Entry Tax Act, 1999 Tax & Penalty 16 15 2012-13 to 2014-15 Deputy Commissioner
West Bengal Value Added Tax Act, 2003 Tax & Interest 712 697 2007-08, 2009-10, 2010-11 and 2013-14 West Bengal Appellate Tribunal
West Bengal Value Added Tax Act, 2003 Tax & Interest 1,456 1,455 2011-12 to Q1 2017-18 Senior Joint Commissioner
Gujarat Value Added Tax Act, 2003 Tax, Interest & Penalty 45 32 2010-11 & 2013-14 Gujarat VAT Tribunal, Deputy Commissioner (Appeals)
Gujarat Value Added Tax Act, 2003 Tax, Interest & Penalty 777 777 2016-17 & 2017-18 Appeal pending to be filed
Delhi Value Added Tax Act, 2004 Tax & Penalty 46 46 2012-13 Additional Commissioner
Andhra Pradesh Value Added Tax Act, 2005 Tax & Penalty 232 174 2010-11 High Court
Andhra Pradesh CST Act (Now Telangana) Tax & Penalty 24 24 2015-16 Appeal pending to be filed
Maharashtra Value added Tax Act, 2005 Tax, Interest & Penalty 413 392 2011-12 to 2014-15 Deputy Commissioner Sales Tax (Nodal Division)
Central Sales Tax Act, 1956 read with Gujarat Value Added Tax Act, 2003 Tax, Interest & Penalty 181 145 2009-10 to 2013-14 Deputy Commissioner (Appeals)
Central Sales Tax Act, 1956 read with Gujarat Value Added Tax Act, 2003 Tax, Interest & Penalty 1,136 1,136 2016-17 & 2017-18 Appeal pending to be filed
Chhattisgarh Value Added Tax Act 2005, Entry Tax Act & Central Sales Act, 1956 Tax & Interest 23 23 2013-14 Deputy Commissioner
Service tax under Finance Act, 1994 Tax, Interest & Penalty 15 15 Oct-11 to Mar-14 Central Excise and Service Tax Appellate Tribunal, Chennai
Income Tax Act, 1961 Tax & Interest 17 17 AY 2011-12 Income Tax Appellate Tribunal
Income Tax Act, 1961 Tax & Interest 423 423 AY 2016-17, AY 2017-18 and AY 2018-19 Commissioner of Income Tax Appeals

There are no dues in respect of goods and service tax, duty of excise, duty of customs as at 31 March 2021 which have not been deposited with the statutory authorities on account of a dispute.

(viii) According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to any financial institution or bank during the year. The Company did not have any loans or borrowing from government or dues to debenture holders during the year.

(ix) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. According to the information and explanations given to us and based on our examination of the records of the Company, the term loans availed during the year were utilized for the purpose for which those were raised.

(x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act. (xii) The Company is not a Nidhi Company. Accordingly, reporting on clause 3(xii) of the Order does not arise.

(xiii) According to the information and explanations given to us, in our opinion, all transactions with the related parties are in compliance with Sections 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 applicable Indian Accounting Standards.

(xiv) The Company has made preferential allotment of shares during the year. According to the information and explanations given to us and based on our examination of records of the Company, the requirements of Section 42 of the Act have been complied with and the amount raised have been used for the purposes for which the funds were raised. Further, according to the information and explanations given to us, during the year, the Company has not made any private placement of shares or fully or partly convertible debentures.

(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 the directors during the year. Accordingly reporting on clause 3 (xv) of the Order does not arise.

(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 Sharp & Tannan
Chartered Accountants
(Firm’s Registration No. 003792S)
V. Viswanathan
Partner
Place: Chennai Membership No. 215565
Date : June 05, 2021 UDIN: 21215565AAAACL6298

Annexure B to the Independent Auditor’s Report

(Referred to in paragraph 2(f) under ‘Report on other Legal and Regulatory Requirements’ section of our report to the Members of VA Tech Wabag Limited of even date)

Independent Auditors’ Report on the Internal Financial

Controls with reference to financial statements under clause

(i) of sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

We have audited the internal financial controls with reference to financial statements of VA Tech Wabag Limited ("the Company") as of 31 March 2021 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Board of Directors of the Company is 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 on Audit of Internal Financial Controls Over Financial Reporting ("the Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI").

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s 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 ("the Act").

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls with reference to financial statements based on our audit. Our audit is conducted in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system 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 internal financial controls with reference to 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 auditor’s 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 Company’s internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company’s 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 the standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial controls with reference 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 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 company’s assets that could have a material effect on the standalone 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.

opinion

In our opinion and to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as of 31 March 2021, 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.

For Sharp & Tannan
Chartered Accountants
(Firm’s Registration No. 003792S)
V. Viswanathan
Partner
Place: Chennai Membership No. 215565
Date : June 05, 2021 UDIN: 21215565AAAACL6298