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Agro Tech Foods Ltd.

BSE: 500215 | NSE: ATFL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE209A01019 | SECTOR: Edible Oils & Solvent Extraction

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  • Bid Price (Qty.)

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  • Offer Price (Qty.)

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Annual Report

For Year :
2019 2017 2016 2015 2014 2013 2011 2010 2009

Auditor's Report

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Agro Tech Foods 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.

Description of Key Audit Matters

Revenue Recognition

See note 3(g) and 22 to the standalone financial statements

The key audit matter

The principal products of the Company comprises food products which are mainly sold through distributors, modern trade and direct sale channels amongst others. Revenue is recognised when the customer obtains control of the goods, and is measured net of trade discounts and volume rebates.

We identified revenue recognition as a key audit matter because there is a risk of revenue being overstated due to fraud resulting from the pressure management may feel to achieve performance targets at the year end. The Company focuses on revenue as a key performance indicator, which could create an incentive for revenue to be recognised before control has been transferred.

How the matter was addressed in our audit

In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence:

1. We assessed the appropriateness of the revenue recognition accounting policies, including those relating to rebates and discounts, by comparing with applicable accounting standards.

2. We evaluated the design of controls and operating effectiveness of the relevant controls with respect to revenue recognition and accounting for sales incentive arrangements on selected transactions.

3. We performed substantive testing by selecting samples of revenue transactions recorded during the year by verifying the underlying documents.

4. We carried out analytical procedures on revenue recognised during the year to identify unusual variances.

5.

6.

7.

8.

We performed confirmation procedures on selected customer balances at the balance sheet date.

We tested, on a sample basis, specific revenue transactions recorded before and after the financial year end date to determine whether the revenue had been recognised in the appropriate financial period.

Tested year-end accruals for sales incentives from the underlying documentation on a sample basis. We tested manual journal entries posted to revenue to identify unusual items.

Tax litigations - provisions and contingencies

See note 31 to the standalone financial statements

The key audit matter

How the matter was addressed in our audit

The Company is involved in several ongoing direct

In view of the significance of the matter we applied

and indirect tax litigations in various states of India.

the following audit procedures in this area, among

The Company recognises a provision when it has a

others to obtain sufficient appropriate audit

present obligation (legal or constructive) as a result

evidence:

of a past event, it is probable that an outflow of

1.

We tested the effectiveness of controls around

resources embodying economic benefits will be

the recording and assessment of tax provisions

required to settle the obligation and a reliable

and contingent liabilities.

estimate can be made of the amount of the

2.

We used our own local tax specialists to assess

obligation.

the value of the provisions and contingent

A disclosure for contingent liabilities is made where

liabilities in light of the nature of the exposures,

there is a possible obligation or a present obligation

applicable regulations and related

that may probably not require an outflow of

correspondences with the authorities.

resources. When there is a possible or a present

3.

We assessed the relevant historical and recent

obligation where the likelihood of outflow of

judgments passed by the court authorities as well

resources is remote, no provision or disclosure is made.

as obtained formal confirmations from the

We have identified tax litigations, provisions and

external counsel, where appropriate;

contingencies as a key audit matter because it

4.

Discussed the open cases with the legal head of

requires the management to make judgements and

the Company to assess the reasonableness of the

estimates in relation to the exposure arising out of

provision or contingency; and

litigations. The key judgement lies in the estimation

5.

Considered the adequacy of the Company’s

of provisions where they may differ from the future

disclosures made in relation to taxation related

obligations. The Company operates under several

provisions and contingencies in the financial

tax laws and some of these have a significant impact

statements.

on the financial statements of the Company.

Impairment of investments in subsidiaries

See note 6 to the standalone financial statements

The key audit matter

How the matter was addressed in our audit

The Company has significant investments in

In view of the significance of the matter we applied

subsidiaries which are recorded at cost.

the following audit procedures in this area, among

others to obtain sufficient appropriate audit

We considered impairment of investments in

evidence:

subsidiaries as a key audit matter due to their

1.

We tested the design of controls over the review

materiality in the context of the financial statements.

of the impairment analysis for investments;

Further, management applies judgement in

2.

We assessed management’s assessment of

indications of impairment for reasonableness;

evaluating whether indicators of impairment are present and if yes, in assessing the future performance and prospects of the respective subsidiary and in determining the appropriate discounting rate.

3. We assessed the management review control over the cash flow forecasts including inspecting the internal and external factors taken into consideration in preparing the forecasts.

4. We assessed the assumptions used in the net cash flow analysis and the discounting rate based on our knowledge of the entity and the markets in which the entity operates.

5. Assessed the reliability of cash flow forecasts through a review of actual past performance and comparison to previous forecasts.

6. We considered the adequacy of disclosures in respect of the investment in subsidiaries in the financial statements.

Accuracy of estimation from the fire accident at a factory in Unnao and related consequences:

See note 34 to the standalone financial statements

The key audit matter

How the matter was addressed in our audit

On 04 November 2018, a fire broke out at one of the

In view of the significance of the matter we applied

manufacturing facilities of the Company which

the following audit procedures in this area, among

caused damage to the Company’s property, plant,

others to obtain sufficient appropriate audit

equipment and inventory.

evidence:

The Company was insured for fire incidents including

1. Inquired management about the losses incurred

property, plant and equipment, inventories and

and recognised, and the status of the claims

business interruption and has applied for the claim.

made to the insurance companies. We also inspected the correspondences made to the

The recognition of the claim involves significant

insurance company by the Company with

judgement. Since the claim is under progress, the

respect to the status of the claim.

Company restricted the recognition of the claim to .

the extent of book value of the assets lost, that were

2. Assessed the timing and adequacy of the claim

covered under the insurance policy.

income recognition from the insurance companies. We have checked that the Company has recognised the insurance claim receivable to the extent of book value of the assets lost, that were covered under the insurance policy.

3. We have verified the on account payments received by the Company, pending settlement of the claim.

4. We also assessed the adequacy of the disclosures (in note 34) made in relation to the said matter in the financial statements.

Other Information

The Company’s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company’s annual report, but does not include the financial statements and our auditors’ report thereon. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

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

Management’s Responsibility for the Standalone Financial Statements

The Company’s 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 cashflows 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 th at 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 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 the Company or to cease operations, or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company’s 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 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 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 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 may cast significant doubt on the Company’s ability 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.

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 of India 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 A S specified under Section 133 of the Act with relevant Rules issued thereunder;

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.

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 31 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 / provided by the company to its directors during the current year is in accordance with the provisions of Section 197 read with Schedule V of the Act. The remuneration paid / provided to one director was in excess of the limit laid down under Section 197 read with Schedule V of the Act, which was approved in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V 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.

The Annexure A referred to in the Independent Auditor’s Report of even date, on the standalone financial statements, to the Members of Agro Tech Foods Limited (‘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 fixed assets;

(b)The Company has a regular program of physical verification of its fixed assets by which all fixed assets are verified every year. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noted 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, as disclosed in Note 4 on fixed assets to the standalone financial statements, are held in the name of the Company.

(ii) The inventories, except goods-in-transit, have 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 the physical stocks 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, paragraph 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 Section 186 of the Act, with respect to the investments made. The Company has not granted any loans, or provided any guarantees or security to the parties covered under Section 185 and 186 of the Act.

(v) The Company has not accepted any deposits from the public in accordance with the provisions of Section 73 to 76 of the Act and Rules framed thereunder. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government of India for maintenance of cost records under sub-section (1) of Section 148 of the Act 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, Sales-tax, Service tax, Duty of customs, Duty of excise, Value added tax, Cess and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities though there has been a slight delay in a few cases. Refer note 43 to the standalone financial statements relating to provident fund contribution.

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, Sales-tax, Service tax, Duty of customs, Duty of excise, Value added tax, Cess and 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.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no dues of Goods and Service tax and Duty of custom which have not been deposited with appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income- tax, Sales tax, Service tax, Duty of excise, Value added tax and Entry tax have not been deposited by the Company on account of disputes:

Name of the Statute

Nature of Dues

Amount in* (Rs. Million)

Period to which the amount relates

Forum where the dispute is pending

Central Excise Act, 1944

Excise Duty

27.10

2009 - 2012

Central Excise and Service Tax Appellate Tribunal, Hyderabad

Andhra Pradesh General Sales Tax Act, 1956

Sales Tax

0.10

1997 - 1998

Sales Tax Appellate Tribunal, Hyderabad

Tamil Nadu Sales Tax Act, 1959

Sales Tax

0.26

2002 - 2003

Assistant Commissioner (Appeals), Commercial Taxes, Chennai

West Bengal Sales Tax Act, 1994

Sales Tax

0.72

2001 - 2002

Sales Tax Appellate Tribunal, Kolkata

West Bengal Value Added Tax Act, 2003 and Central Sales Tax Act, 1956

Value Added Tax and Central Sales Tax

4.39

2009 - 2010

Appellate &Revisional Board, West Bengal Commercial Taxes, Kolkata

Bihar Sales Tax Act, 1981

Sales Tax

0.62

2001 - 2002

Joint Commissioner of Commercial Taxes (Appeals) - Central Division, Patna

Delhi Sales Tax Act, 1975 and Central Sales Tax Act, 1956

Sales Tax and CST

0.95

1.64

2003 - 2004

2004 - 2005

Additional Commissioner, Commercial Taxes, Delhi

Gujarat Sales Tax Act, 1970

Sales Tax

0.12

1998 - 1999

Deputy Commissioner of Sales Tax (Appeals), Ahmedabad

0.12

1999 - 2000

Sales Tax Appellate Tribunal, Ahmedabad

The Rajasthan Entry Tax -Goods Act, 1999

Entry Tax

36.86

2002 - 2004

Tax Board, Ajmer

The Assam Value Added Tax Act, 2003 and Central Sales Tax Act, 1956

Value Added Tax and Central Sales Tax

0.36

2009 - 2010

Superintendent of Taxes, Unit D, Guwahati

The Finance Act, 1994

Service Tax

6.22

2010-2011 to 2014-2015

Central Excise and Service Tax Appellate Tribunal, Hyderabad

West Bengal Value Added Tax Act, 2003 and Central Sales Tax Act, 1956

Value Added Tax

3.18

2013-2014

Appellate &Revisional Board, West Bengal Commercial Taxes, Kolkata

Uttar Pradesh Value Added Tax Act, 2008

Value Added Tax

0.10

2014-2015

Deputy Commissioner Appeals, Ghaziabad

Central Excise Act, 1944

Excise Duty

2.00

2015-2016

Central Excise and Service tax Appellate Tribunal, Ahmedabad

West Bengal Value Added Tax Act, 2003

Value Added Tax

3.56

2014-15

Appellate &Revisional Board, West Bengal Commercial Taxes, Kolkata

The Rajasthan Entry Tax - Goods Act, 1999

Entry Tax

5.47

2008 - 2009

Appellate Authority III, Commercial Tax, Jaipur

Central Excise Act, 1944

Excise Duty

0.46

2012-13

Joint Commissioner (Appeals), Dehradun

West Bengal Value Added Tax Act, 2003

Value Added Tax

1.36

2015-16

Senior Joint Commissioner, West Bengal

Income-tax Act, 1961

Income-tax

12.88

AY 2010-2011

Income Tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961

Income-tax

28.31

AY 2011-2012

Income Tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961

Income-tax

16.59

AY 2012-2013

Income Tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961

Income-tax

10.96

AY 2013-2014

Income Tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961

Income-tax

75.33

AY 2016-2017

Assistant Commissioner of Income TaxCircle 1(1), Hyderabad

*net of deposits

(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 its bankers. The Company does not have any loan or borrowings from any financial institution or government, nor has it issued any debentures during the year.

(ix) The Company has not raised any money by way of initial public offer or further public offer (including debt instrument) and term loans during the year. Accordingly, paragraph 3(ix) of the Order is not applicable to the Company.

(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

(xi) According to the information and explanations given 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 of 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 Section 177 and 188 of the Act where applicable and details of such transactions have been disclosed in Note 38 to the standalone financial statements as required by the applicable accounting standards.

(xiv)The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. 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 any non-cash transaction with the directors or person connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

(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.

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

Management’s Responsibility for Internal Financial Controls

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

Auditors’ Responsibility

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

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

Meaning of Internal Financial controls with Reference to Standalone Financial Statements

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

Inherent Limitations of Internal Financial controls with Reference to Standalone financial Statements

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

for B S R & Associates LLP

Chartered Accountants

ICAI Firm’s Registration No. 116231W/W-100024

Vikash Somani

Partner

Membership No: 061272

Place: Gurugram

Date: 24 April 2019