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Southern Petrochemicals Industries Corporation Ltd.

BSE: 590030 Sector: Agri and agri inputs
NSE: SPIC ISIN Code: INE147A01011
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VOLUME 239491
52-Week high 93.05
52-Week low 40.80
P/E 5.95
Mkt Cap.(Rs cr) 1,398
Buy Price 68.70
Buy Qty 1.00
Sell Price 68.85
Sell Qty 1.00
OPEN 66.00
CLOSE 66.15
VOLUME 239491
52-Week high 93.05
52-Week low 40.80
P/E 5.95
Mkt Cap.(Rs cr) 1,398
Buy Price 68.70
Buy Qty 1.00
Sell Price 68.85
Sell Qty 1.00

Southern Petrochemicals Industries Corporation Ltd. (SPIC) - Auditors Report

Company auditors report

To the Members of

Southern Petrochemical Industries Corporation Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of SouthernPetrochemical Industries Corporation Limited ("the Company") which comprise theBalance Sheet as at March 31 2022 and the Statement of Profit and Loss Statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to thestandalone financial statements including a summary of significant accounting policiesand other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act') in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with Companies (Indian Accounting Standards)Rules 2015 as amended and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2022 and profit changes in equity andits 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 thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent ofthe Company in accordance with the Code of Ethics issued by the Institute ofChartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the standalone financial statements under the provisions of theAct and the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Emphasis of Matter

We draw attention to Note 32(iii) of the standalone financialstatements regarding computation of subsidy income based on the provisional Retentionprice (RP) in line with the government's policy dated 17 June 2015 as the finalretention price has not been announced by the Department of Fertilizers. The necessaryadjustments if any and its consequential impact will be assessed when the finalretention price is notified by the Department of Fertilizers.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements for the yearended March 31 2022. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.

Key Audit Matters How the KAM was addressed in our audit
Capitalization of costs as per Ind AS 16 Property Plant and Equipment (PPE) (Refer to note 2 (ii) to the standalone financial statements)
The Company's Board of directors have approved major capital expenditure projects aggregating to Rs.53359 lakhs towards equipment to support production of urea using natural gas and equipment related to energy efficiency. Our audit procedures in respect of this area included:
Out the above approved expenditure one project has been completed as at March 31 2021 amounting to Rs 20269 lakhs. Assessing the nature of the costs incurred towards capital expenditure and verify whether such costs incurred meet the recognition criteria as set out in para 16 to 22 of Ind AS 16.
Further during the year Company has additionally Capitalised an amount of Rs.19705 lakhs towards Modernisation and improving the energy efficiency in continuation of project already capitalised to support production of urea using natural gas and to increase energy efficiency of the production process. Verified the management's approval for the project cost.
Significant level of judgement is involved to ensure that capitalisation of Property Plant and Equipment meet the recognition criteria of Ind AS 16 - Property Plant and Equipment. Verified the design and implementation and operating effectiveness of internal controls including relevant information technology controls relating to capitalization of PPE.
Accordingly the aforesaid matter was determined to be a key audit matter. Performed substantive procedures on a test check basis including authorization for capitalization of PPE and testing with source documentation such as quotation/vendor selection purchase orders invoices and installation certificate to ascertain whether they meet the recognition criteria provided in Ind AS 16.
Obtained the report on physical verification of PPE conducted by the management during the year.
Assessed the appropriateness and adequacy of the related presentation and disclosures in compliance with the applicable Ind AS.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Managementreport Chairman's statement Director's report etc. but does not include thestandalone financial statements and our auditor's report thereon.

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

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

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the

Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statement that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.We give in "Annexure A" a detailed description of Auditor'sresponsibilities for Audit of the Standalone Financial Statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in "Annexure B" a statement on thematters specified in paragraphs 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 bestof 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 theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss the Statement of Changes inEquity and the Statement of Cash Flow dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors are disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure C".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements – Refer Note 34 to the standalonefinancial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

iv. 1. The Management has represented that to the best of it'sknowledge and belief no funds have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kind of funds) by the Company toor in any other person(s) or entity(ies) including foreign entities("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall directly or indirectly lend or invest in otherpersons or entities identified in any manner whatsoever by or on behalf of the Company("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries.

2. The Management has represented that to the best of it'sknowledge and belief no funds have been received by the Company from any person(s) orentity(ies) including foreign entities (Funding Parties) with the understanding whetherrecorded in writing or otherwise as on the date of this audit report that the Companyshall directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the Funding Party ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries

3. Based on our audit procedures which we have considered reasonableand appropriate in the circumstances and according to the information and explanationsprovided to us by the Management in this regard nothing has come to our notice that hascaused us to believe that the representations made by the Management under sub-clause (1)and (2) contain any material misstatement. v. The Company has declared and paid preferencedividend during the year which is in compliance with section 123 of the Companies Act2013.

3. As required by The Companies (Amendment) Act 2017 in our opinionaccording to information explanations given to us the remuneration paid by the Companyto its directors is within the limits laid prescribed under Section 197 of the Act and therules thereunder.

For MSKA & Associates

Chartered Accountants

ICAI Firm Registration No. 105047W

Geetha Jeyakumar

Partner

Membership No. 029409

UDIN: 22029409AJTIAF5192

Place: Chennai

Date: May 27 2022

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT ON EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF SOUTHERN PETROCHEMICAL INDUSTRIES CORPORATION LIMITED

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has internal financial controls with reference to standalone financial statementsin place and the operating effectiveness of such controls.

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

Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosuresare inadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether thestandalone financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalone financialstatements for the year ended March 31 2022 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

For MSKA & Associates

Chartered Accountants

ICAI Firm Registration No. 105047W

Geetha Jeyakumar

Partner

Membership No. 029409

UDIN: 22029409AJTIAF5192

Place: Chennai

Date: May 27 2022

ANNEXURE B TO INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF SOUTHERN PETROCHEMICAL INDUSTRIES CORPORATION LIMITEDFOR THE YEAR ENDED MARCH 31 2022

[Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements' in the Independent Auditors' Report] i. (a) A. TheCompany has maintained proper records showing full particulars including quantitativedetails and situation of Property Plant and Equipment and relevant details ofright-of-use assets.

B. The Company has maintained proper records showing full particularsof intangible assets.

(b) All the Property Plant and Equipment have not been physicallyverified by the management during the year but there is a regular programme ofverification which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties (other than properties where the Company is the lessee and the lease agreementsare duly executed in favour of the lessee) as disclosed in the standalone financialstatements are held in the name of the Company. (d) According to the information andexplanations given to us the Company has not revalued its property plant and

Equipment (including Right of Use assets) and its intangible assetsduring the year. Accordingly the requirements under paragraph 3(i)(d) of the Order arenot applicable to the Company.

(e) According to the information and explanations given to us noproceeding has been initiated or pending against the Company for holding benami propertyunder the Benami Transactions (Prohibition) Act 1988 and rules made thereunder.Accordingly the provisions stated in paragraph 3(i) (e) of the Order are not applicableto the Company. ii. (a) The inventory has been physically verified during the year by themanagement. In our opinion the frequency of verification coverage and procedure of suchverification is reasonable and appropriate. No material discrepancies were noticed on suchverification.

(b) The Company has been sanctioned working capital limits in excess ofRs. 5 crores in aggregate from Banks on the basis of security of current assets. Quarterlyreturns / statements filed with such Banks are in agreement with the books of account.iii. (a) According to the information explanation provided to us the Company has notprovided any guarantee or security or granted any loans or advances in the nature ofloans secured or unsecured to companies firms Limited Liability Partnerships or anyother parties. Hence the requirements under paragraph 3(iii)(a) of the Order are notapplicable to the Company.

(b) According to the information and explanations given to us and basedon the audit procedures performed by us we are of the opinion that the investments madeby the Company during the year is not prejudicial to the interest of the Company.

(c) The Company has not provided any guarantee or security or grantedany loans or advances in the nature of loans secured or unsecured to companies firmsLimited Liability Partnerships or any other parties. Hence the requirements underparagraph 3(iii)(c) to (f) of the Order are not applicable to the Company. iv. Accordingto the information and explanations given to us and on the basis of our examination ofrecords of the Company the Company has not provided any guarantee or security asspecified under Sections 185 and 186 of the Act. In respect of the investments made andloans given by the Company in our opinion the provisions of Sections 185 and 186 of theAct have been complied with. v. In our opinion and according to the information andexplanations given to us the Company has not accepted any deposits from the public withinthe meaning of Sections 73 74 75 and 76 of the Act and the rules framed there under. vi.We have broadly reviewed the books of accounts maintained by the Company pursuant to therules prescribed by the Central Government for maintenance of cost records under Section148(1) of the Companies Act 2013 in respect of its manufactured goods and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not carried out a detailed examination of the records with aview to determine whether these are accurate or complete. vii. (a) According to theinformation and explanations given to us and the records of the Company examined by us inour opinion undisputed statutory dues including goods and service tax provident fundemployees' state insurance income-tax sales-tax service tax duty of customs dutyof excise value added tax cess have been regularly deposited by the Company withappropriate authorities in all cases during the year.

According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax duty of custom goods and service tax cess and other statutory dues wereoutstanding at the year end for a period of more than six months from the date theybecame payable

(b) According to the information and explanation given to us andexamination of records of the Company the outstanding dues of income-tax goods andservice tax customs duty cess and any other statutory dues on account of any disputeare as follows:

Name of the statute Nature of dues Amount (Rs. In Lakhs) Period to which the amount relates Forum where dispute is pending
The Central Excise Act 1944 Excise Duty 97.55

2000-01 to 2004-05 & 2011-12 to 2013-14 to June 2017

Customs Excise and Service tax appellate Tribunal
The Finance Act 1994 Service Tax 235.64 2015-16 to June 2017 Customs Excise and Service Tax Appellate Tribunal
The Sales Tax Act under various state enactments Local Sales Tax 835.21 2003-04 to 2011-12 Additional/Deputy Commissioner (Appeals)/ Sales Tax Appellate Tribunal.
Goods & Service Tax Act 2017 GST 934.50 April 2017 to March 2018 Madurai Bench of Madras High Court

viii. According to the information and explanations given to us thereare no transactions which are not accounted in the books of account which have beensurrendered or disclosed as income during the year in Tax Assessment of the Company. Alsothere are no previously unrecorded income which has been now recorded in the books ofaccount. Hence the provision stated in paragraph 3(viii) of the Order is not applicableto the Company.

ix. (a) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings or in payment ofinterest thereon to any lender.

(b) According to the information and explanations given to us and on the basis of ouraudit procedures we report that the Company has not been declared wilful defaulter by anybank or financial institution or government or any government authority.

(c) In our opinion and according to the information and explanation provided to usmoney raised by way of term loans during the year have been applied for the purpose forwhich they were raised.

(d) According to the information and explanations given to us and the proceduresperformed by us and on an overall examination of the standalone financial statements ofthe Company we report that no funds raised on short-term basis have been used forlong-term purposes by the Company.

(e) According to the information explanation given to us and on an overall examinationof the standalone financial statements of the Company we report that the Company has nottaken any funds from any entity or person on account of or to meet the obligations of itsassociates or joint ventures as defined under theAct.

(f) According to the information and explanations given to us and procedures performedby us we report that the Company has not raised loans during the year on the pledge ofsecurities held in its joint ventures or associate companies.

x. (a) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Accordingly the provisionsstated in paragraph 3 (x)(a) of the Order are not applicable to the Company.

(b) According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully partly or optionallyconvertible debentures during the year. Accordingly the provisions stated in paragraph 3(x)(b) of the Order are not applicable to the Company.

xi. (a) During the course of our audit examination of the books andrecords of the Company carried out in accordance with the generally accepted auditingpractices in India and according to the information and explanations given to us we haveneither come across any instance of material fraud by the Company nor on the Company.

(b) We have not come across of any instance of material fraud by theCompany or on the Company during the course of audit of the standalone financial statementfor the year ended March 31 2022 accordingly the provisions stated in paragraph 3(xi)(b) of the Order is not applicable to the Company.

(c) As represented to us by the management there are no whistle-blowercomplaints received by the Company during the course of audit. Accordingly the provisionsstated in paragraph (xi)(c) of the Order is not applicable to Company.

xii. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company. Accordingly the provisions stated inparagraph 3(xii) (a) to (c) of the Order are not applicable to the Company.

xiii. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards.

xiv. (a) In our opinion and based on our examination the Company hasan internal audit system commensurate with the size and nature of its business.

(b) We have considered internal audit reports issued by internalauditors during our audit. xv. According to the information and explanations given to usin our opinion during the year the Company has not entered into non-cash transactions withdirectors or persons connected with its directors and hence provisions of section 192 ofthe Act are not applicable to Company. Accordingly the provisions stated in paragraph3(xv) of the Order are not applicable to the Company. xvi. (a) In our opinion the Companyis not required to be registered under section 45 IA of the Reserve Bank of India Act1934 and accordingly the provisions stated in paragraph clause 3 (xvi)(a) of the Orderare not applicable to the Company.

(b) In our opinion the Company has not conducted any Non-BankingFinancial or Housing Finance activities without any valid Certificate of Registration fromReserve Bank of India. Hence the reporting under paragraph clause 3

(xvi)(b) of the Order are not applicable to the Company.

(c) The Company is not a Core Investment Company (CIC) as defined inthe regulations made by Reserve Bank of India. Hence the reporting under paragraph clause3 (xvi)(c) of the Order are not applicable to the Company. (d) The Company does not haveany CIC as part of its group. Hence the provisions stated in paragraph clause 3 xvi (d) ofthe order are not applicable to the Company.

xvii. According to the information and explanation provided to us theCompany has not incurred cash losses in the current financial year and in the immediatelypreceding financial year. Hence the provisions stated in paragraph clause 3 (xvii) of theOrder are not applicable to the Company.

xviii. There has been no resignation of the statutory auditors duringthe year. Hence the provisions stated in paragraph clause 3 (xviii) of the Order are notapplicable to the Company.

xix. According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realization of financialassets and payment of financial liabilities other information accompanying the standalonefinancial statements our knowledge of the Board of Directors and management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report that Company is not capable of meeting its liabilities existingat the date of balance sheet as and when they fall due within a period of one year fromthe balance sheet date. We however state that this is not an assurance as to the futureviability of the Company. We further state that our reporting is based on the facts up tothe date of the audit report and we neither give any guarantee nor any assurance that allliabilities falling due within a period of one year from the balance sheet date will getdischarged by the Company as and when they fall due. xx. According to the information andexplanations given to us the provisions of section 135 of the Act are not applicable tothe Company. Hence the provisions of paragraph (xx)(a) to (b) of the Order are notapplicable to the Company. xxi. This reporting under clause 3(xxi) of the order is notapplicable in respect of audit of Standalone financial statements.

Accordingly no comment in respect of the said clause has been includedin this report.

For MSKA & Associates

Chartered Accountants

ICAI Firm Registration No. 105047W

Geetha Jeyakumar

Partner

Membership No. 029409

UDIN: 22029409AJTIAF5192

Place: Chennai

Date: May 27 2022

ANNEXURE C TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF SOUTHERN PETROCHEMICAL INDUSTRIES CORPORATION LIMITED

[Referred to in paragraph 2(f) under ‘Report on Other Legal andRegulatory Requirements' in the Independent Auditors' Report of even date to theMembers of Southern Petrochemical Industries Corporation Limited on the FinancialStatements for the year ended March 31 2022]

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

We have audited the internal financial controls with reference tostandalone financial statements of Southern Petrochemical Industries Corporation Limited("the Company") as of March 31 2022 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects an adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at March 31 2022 based on the internal control with referenceto standalone financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (ICAI) (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tostandalone financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to standalone financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of the Act tothe extent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to standalone financial statements was established and maintained and ifsuch controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofinternal financial controls with reference to standalone financial statements assessingthe risk that a material weakness exists and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to standalone financial statements.

Meaning of Internal Financial Controls With reference to StandaloneFinancial Statements

A Company's internal financial control with reference tostandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of standalonefinancial statements for external purposes in accordance with generally acceptedaccounting principles. A Company's internal financial control with reference tostandalone financial statements includes those policies and procedures that (1) pertain tothe maintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on thestandalone financial statements.

Inherent Limitations of Internal Financial Controls With reference toStandalone financial statements

Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For MSKA & Associates

Chartered Accountants

ICAI Firm Registration No. 105047W

Geetha Jeyakumar

Partner

Membership No. 029409

UDIN: 22029409AJTIAF5192

Place: Chennai

Date: May 27 2022

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