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Motilal Oswal Financial Services Ltd.

BSE: 532892 | NSE: MOTILALOFS |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE338I01027 | SECTOR: Finance - General

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10-Day
65,226
30-Day
133,676
35,670
  • Prev. Close

    665.25

  • Open Price

    670.50

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    664.35 (48)

Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Auditor's Report

INDEPENDENT AUDITOR''S REPORT

To the Members of Motilal Oswal Financial Services Limited REPORT ON THE AuDIT OF THE STANDALONE FINANOAL STATEMENTS Opinion

1. We have audited the accompanying standalone financial statements of Motilal Oswal Financial Services Limited (''the Company''), which comprise the Balance Sheet as at 31 March 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. 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 including Indian Accounting Standards (''Ind AS'') specified under section 133 of the Act, of the state of affairs (financial position) of the Company as at 31 March 2019, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing 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 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 there under, 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. Motilal Oswal Financial Services Limited Independent Auditor''s Report on the Financial Statements

Key Audit Matters

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

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter

How our audit addressed the key audit matter

First time adoption of ind AS framework

Refer note 2.1 for significant accounting policies and note 63 for reconciliation.

As disclosed in note 2.1 to the financial statements, the Company has adopted the Indian Accounting Standards notified under section 133 of the Companies Act, 2013, read together with the Companies (Indian Accounting Standards) Rules, 2015 (as amended) (''Ind AS'') with effect from 01 April 2018 (1 April 2017 being the transition date) and prepared the first set of financial statements under Ind AS framework in the current year.

For periods up to and including the year ended 31 March 2018, the Company the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (''previous GAAP'').

This change in the financial reporting framework required an end-to-end evaluation of the potential impact on each component of the financial statement which involved significant efforts. This process also required the management

Our procedures in respect of the first time adoption of Ind AS

framework included, but were not limited to, the following:

design / controls

- Assessed the design, implementation and operating effectiveness of key internal controls over management''s evaluation of transition date choices and exemptions availed in line with the principles under Ind AS 101.

Substantive tests

- Evaluated the implementation of exemptions availed by the Company in accordance with the requirements of Ind AS 101, First Time Adoption of Indian Accounting Standards (Ind AS 101).

- Evaluated the accounting policies adopted by the Company on transition to Ind AS and assessed its appropriateness and the requirements of relevant accounting standards under the Ind AS framework.

- Assessed areas of significant estimates and management judgment in line with principles under Ind AS.

Key audit matter

How our audit addressed the key audit matter

to apply significant judgements to identify and elect appropriate accounting policies suitable for various transactions and balances relating to the operations of the Company including electing of available options for transition of balances as at the transition date from the previous GAAP to the new GAAP.

Further, the first time preparation of the Ind AS financial statements involved preparation and presentation of additional notes and disclosures as required by the Ind AS framework as compared to the previous GAAP in addition to Note 63 to the financial statements setting forth the reconciliation of balances from previous GAAP to the new GAAP as at the transition date, and the impact of restatement on the results of the comparative period due to such transition. The areas where there were a significant impact on account of first time adoption involved the following standards amongst others:

a. Ind AS 109, Financial Instruments - Fair Valuation of Investments

b. Ind AS 107, Financial Instruments: Disclosures

Considering the significance of the event in the current year to the financial statements, the complexities and efforts involved, this matter has been identified as a key audit matter for the current year audit.

- Evaluated the appropriateness and adequacy of disclosures in financial statements. Motilal Oswal Financial Services Limited Independent Auditor''s Report on the Financial Statements

information Technology system for the financial reporting process

The Company is highly dependent on its information technology (IT) systems for carrying on its operations which require large volume of transactions to be processed on a daily basis. Further, the Company''s accounting and financial reporting processes are dependent on the automated controls enabled by IT systems which impacts key financial accounting and reporting items such as Brokerage income, Trade receivable ageing amongst others. The controls implemented by the Company in its IT environment determine the integrity, accuracy, completeness and validity of data that is processed by the applications and is ultimately used for financial reporting.

We have focused on user access management, change management, segregation of duties, developer access to the production environment and changed to IT environment. Further, we also focused on key automated controls relevant for financial reporting.

Accordingly, our audit strategy has focused on key IT systems and controls due to pervasive impact and performing an extensive testing of automated controls and ITGCs; we have determined the same as a key audit matter for current year audit.

Our key audit procedures with the involvement of our IT

specialists included, but were not limited to, the following:

- Obtained an understanding of the Company''s IT environment and conducted risk assessment and identified IT applications, databases and operating systems that are relevant to our audit. Also, obtained an understanding of key controls operating over the such identified systems;

- Tested the design and operating effectiveness of the Company''s IT controls over IT applications as identified above;

- For the IT applications identified above, tested IT general controls particularly logical access, change management and aspects of IT operational controls. Tested that requests for access to systems were appropriately reviewed and authorized; tested controls around Company''s periodic review of access rights; inspected requests of changes to systems for appropriate approval and authorization.

- Tested related interfaces, configuration and other application layer controls identified during our audit and report logic for system generated reports relevant to the audit mainly for Brokerage income, Trade receivable ageing for evaluating completeness and accuracy.

- Where deficiencies were identified, tested compensating controls or performed alternative procedures.

Key audit matter

How our audit addressed the key audit matter

Valuation of investments carried at fair value

Refer note 2.6 for significant accounting policies and note

8 and note 57 for financial disclosures

As at 31 March 2019, the Company held investments

Our audit procedures in relation to valuation of investments

amounting to R3,095 crores which represent 54 % of the total

included, but were not limited to, the following:

assets of the Company as at 31 March 2019.

design/controls:

The investments which are valued using Level 2 and 3 inputs

-

Obtained a detailed understanding of the management''s

comprise 18% of the total investments of the Company as at

process and controls for determining the fair valuation of

31 March 2019.

these investments. The understanding was obtained by

These investments comprise of investment in real estate

performance of walkthroughs which included inspection

funds, alternative investment funds and private equity funds

of documents produced by the Company and discussion

and unquoted equity investments.

with those involved in the process of valuation;

The aforesaid investment is not traded in the market. These

-

Evaluated the design and the operational effectiveness of

investments are fair valued using Level 2 and 3 inputs.

relevant key controls over the valuation process, including

The fair valuation of these investments is determined by a

the Company''s review and approval of the estimates

management appointed independent valuation specialist

and assumptions used for the valuation including key

based on discounted cash flow method for equity, Investment

authorization and data input controls;

in Alternate Investment funds are valued based on the net

Substantive tests:

asset value declared by the respective funds. The process

Assessed the appropriateness of the valuation

of computation of fair valuation of investments include use

of unobservable inputs and management judgments and

methodologies for varied type of investments in

estimates which are complex.

accordance with the Company''s policy and tested the

mathematical accuracy of the management''s model

The key assumptions underpinning management''s assessment

adopted for different types of investments;

of fair value of these investments, include application of

-

Obtained the valuation reports done by the management''s

liquidity discounts; calculation of discounting rates and the

expert and assessed the expert''s competence, objectivity

estimation of projections of revenues, projections of future cash flows, growth rates.

and independence in performing the valuation of these investments;

The valuation of these investments was considered to be one

-

For these investments, critically evaluated the valuation

of the areas which required significant auditor attention and

assessment and resulting conclusions by the Company in

was one of the matters of most significance in the standalone

order to determine the appropriateness of the valuations

financial statements due to the materiality of total value of

by performing reasonableness tests and evaluating

investments to the standalone financial statements and the

sensitivity analysis for the key inputs and assumptions;

complexity involved in the valuation of these investments.

Ensured the appropriateness of the carrying value of these investments in the financial statements and the gain or loss recognized in the financial statements as a result of such fair valuation; and

-

Ensured the appropriateness of the disclosures in accordance with the applicable accounting standards

Obtained written representations from the management and those charged with governance whether they believe significant assumptions used in valuation of the investments are reasonable.

information other than the Financial Statements and Auditor''s Report thereon

6. The Company''s Board of Directors is responsible for the other information. The other information comprises the Chairman''s message and Management discussion and analysis but does not include the financial statements and our auditor''s report thereon, which we obtained prior to the date of this auditor''s report, and the Board''s report, which is expected to be made available to us after that date.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor''s report, 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.

When we read the Board''s report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those charged with Governance for the Standalone

7. The Company''s Board of Directors is 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 (financial position), profit or loss (financial performance including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

8. In preparing the financial statements, management 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 the Company or to cease operations, or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the 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 on Auditing 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 financial statements.

11. As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the 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 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 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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

12. 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.

13. 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.

14. 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

15. As required by section 197(16) of the Act, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

16. 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 the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.

17. Further to our comments in Annexure I, 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 purpose 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 financial statements dealt with by this report are in agreement with the books of account;

d) in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

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 31 March 2019 from being appointed as a director in terms of section 164(2) of the Act;

f) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 11 May 2019 as per Annexure

g) 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 39 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2019;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2019;

iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2019;

iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 NovembeRs,2016 to 30 DecembeRs,2016, which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.

annexure

Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All property, plant and equipment have not been physically verified by the management during the year, however, there is a regular program of verification once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets.

(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) The Company does not have any tangible inventory. Accordingly, the provisions of clause 3(ii) of the Order are not applicable.

(iii) The Company has granted unsecured loans to companies covered in the register maintained under Section 189 of the Act; and with respect to the same:

(a) in our opinion the terms and conditions of grant of such loans are not, prima facie, prejudicial to the company''s interest.

(b) the schedule of repayment of the principal and the payment of the interest has not been stipulated and hence we are unable to comment as to whether repayments/ receipts of the principal amount and the interest are regular;

(c) there is no overdue amount in respect of loans granted to such companies.

(iv) In our opinion, the Company has not entered into any transaction covered under Sections 185 and 186 of the Act. Accordingly, the provisions of clause 3(iv) of the Order are not applicable.

(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) The Central Government has not specified maintenance of cost records under sub-section (1) of Section 148 of the Act, in respect of Company''s services. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) Undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, goods and service tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Undisputed amounts payable in respect of stamp duty, which were outstanding at the year-end for a period of more than six months from the date they became payable are as follows:

Statement of arrears of Statutory Dues outstanding for more than six months :

Name of Statute

Nature of Amount

Amount (in lakhs)

period to which Amount Relates

due date

due date of payment

Indian Stamp Act, 1899

Stamp Duty

104

FY 16-17

Not Available as Stamp Duty is collected in States where Payment and Levy Mechanism is not established.

Not paid as on 11 May 2019

Indian Stamp Act, 1899

Stamp Duty

150

FY 17-18

Indian Stamp Act, 1899

Stamp Duty

77

FY 18-19

(b) The dues outstanding in respect of income-tax, sales-tax, service tax, goods and service tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:

Name of the statute

Nature of due

Amount (Rin Lacs)

Amount paid under protest (Rin Lacs)

period to which the amount relates

Forum where dispute is pending

Income Tax Act, 1961

Income Tax

21

-

2007-08

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

13

-

2008-09

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

2

15

2009-10

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

3

2009-10

Commissioner of Income Tax (Appeals)

Name of the statute

Nature of due

Amount (Rin Lacs)

Amount paid under protest (Rin Lacs)

period to which the amount relates

Forum where dispute is pending

Income Tax Act, 1961

Income Tax

59

65

2010-11

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

53

33

2011-12

Income Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

8

20

2012-13

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

31

5

2013-14

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

1

100

2014-15

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

110

9

2014-15

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

0.15

2015-16

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

261

92

2015-16

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

152

2015-16

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

68

2015-16

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

433

2015-16

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

0.06

2016-17

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

396

2016-17

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

42

2016-17

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Income Tax

129

2016-17

Commissioner of Income Tax (Appeals)

(viii) The Company has not defaulted in repayment of loans or borrowings to any financial institution or a bank or government or any dues to debenture-holders during the year.

(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans were applied for the purposes for which the loans were obtained.

(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been paid and provided by the Company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.

(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements as required by the applicable accounting standards.

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

(xv) In our opinion, the company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.

(xvi) The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, provisions of clause 3(xvi) of the Order are not applicable.

annexure ii independent Auditor''s Report on the internal Financial controls under clause (i) of Sub-section 3 of Section 143 of the companies Act, 2013 (''the Act'')

1. In conjunction with our audit of the standalone financial statements of Motilal Oswal Financial Services Limited (''the Company'') as at and for the year ended 31 March 2019, we have audited the internal financial controls over financial reporting (''IFCoFR'') of the Company as at that date.

Management''s Responsibility for internal Financial controls

2. The Company''s Board of Directors is responsible for establishing and maintaining internal financial controls based on 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 the Company''s business, including adherence to the 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 Act.

Auditor''s Responsibility for the Audit of internal Financial controls

3. Our responsibility is to express an opinion on the Company''s IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (''ICAI'') and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (''the Guidance Note'') issued by the ICAI. 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 IFCoFR 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 IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, 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 judgment, including the assessment of the risks of material misstatement of the 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 Company''s IFCoFR.

Meaning of internal Financial controls over Financial Reporting

6. A company''s IFCoFR 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 company''s IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with 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 company''s assets that could have a material effect on the financial statements.

inherent Limitations of internal Financial controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR, 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 IFCoFR to future periods are subject to the risk that the IFCoFR 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, adequate internal financial controls over financial reporting and such controls were operating effectively as at 31 March 2019, based on criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For Walker chandiok & co LLp

Chartered Accountants

Firm''s Registration No.: 001076N/N500013

Sudhir N. pillai

Partner

Membership No.: 105782

Place: Mumbai

Date : 11 May 2019