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Shriram Transport Finance Company Ltd.

BSE: 511218 Sector: Financials
NSE: SRTRANSFIN ISIN Code: INE721A01013
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VOLUME 62048
52-Week high 1580.20
52-Week low 1002.50
P/E 9.02
Mkt Cap.(Rs cr) 34,261
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OPEN 1285.00
CLOSE 1280.35
VOLUME 62048
52-Week high 1580.20
52-Week low 1002.50
P/E 9.02
Mkt Cap.(Rs cr) 34,261
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shriram Transport Finance Company Ltd. (SRTRANSFIN) - Auditors Report

Company auditors report

To the Members of Shriram Transport Finance Company Limited REPORT oNThe AuDIT of The STANDALoNE

financial statements

opinion

1. We have audited the accompanying standalone financial statements ofShriram transport Finance company Limited ("the company") which comprise thestandalone balance sheet as at 31 March 2022 and the standalone statement of profit andloss (including other comprehensive income) standalone statement of changes in equity andstandalone statement of cash flows for the year then ended and notes to the StandaloneFinancial Statements including a summary of significant accounting policies and otherexplanatory information ("the Standalone Financial Statements").

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid Standalone Financial Statements give theinformation required by the companies Act 2013 ("Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in india of the state of affairs of the company as at 31 March 2022and its profit and other comprehensive income changes in equity and its cash flows forthe year ended on that date.

Basis for opinion

3. We conducted our audit in accordance with the Standards on auditing("SAs") specified under section 143(10) of the AcE our responsibilities underthose SAs are further described in the Auditor's Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants 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 our opinionon the Standalone Financial Statements.

Emphasis of Matter

4. We draw attention to Note 63 to the Standalone Financial Statementswhich describes the facts that

the additional Expected Credit Loss (‘ECL') provision onaccount of COVID-19 is based on the Company's historical experience collectionefficiencies post lockdown internal assessment and other emerging forward-lookingfactors on account of the pandemic. However the actual impact may vary due to prevailinguncertainty caused by the pandemic. Further the extent to which the COVID-19 pandemicwill impact the Company's financial performance is dependent on future developmentswhich are highly uncertain. our Opinion is not modified in respect of this matter.

Key Audit Matters

5. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the Standalone Financial Statements ofthe year under report. 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.

6. We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the Standalone FinancialStatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the Standalone Financial Statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying Standalone Financial statements.

A. Impairment Loss Allowance of loans and advances

(Reference to Note 12 read with Statement of Accounting Policies Note6.1(xi) and Note No. 63 of the other Notes forming part of Standalone Financialstatements- Schedule to the Standalone Financial Statements)

(Rs. in crores)
Gross Advances 125699.03
Provisions* 9033.88
Net Advances 116665.15
COVID-19 Provision* 2052.58

(*COVID-19 Provisions - towards management overlay on account ofCOVID-19 is included in above provisions)

B. Significant estimates and judgment involved Key Audit Matter

During the year Reserve Bank of India issued revised guidelines(including clarifications thereon) on income Recognition and Asset classification norms("IRAc"). These guidelines prescribe the prudential norms for identification andclassification of such assets as Stage 3 / NPAs. The company has applied its judgement todetermine the identification and classification of such assets as Stage 3 / NPAs byapplying quantitative as well as qualitative factors. The risk of identification of suchassets as Stage 3 / NPAs is affected by factors like stress and liquidity concerns of suchassets. impairment loss allowance of loans and advances ("impairment lossallowance") is a Key Audit Matter as the company has significant credit risk exposureconsidering the large loan portfolio across a wide geographical range. The value of loansand advances on the balance sheet is significant and there is a high degree of complexityand judgment involved in estimating individual and collective credit impairmentprovisions write-offs against these loans and to additionally determine the asset qualityand provision of the company. The company's model to calculate expected credit loss("EcL") is inherently complex and judgment is applied in determining the correctconstruction of the three-stage impairment model ("EcL Model") including theselection and input of forward looking information. EcL provision calculation require theuse of large volumes of data. The completeness and reliability of data can significantlyimpact accuracy of the modelled impairment provisions. The accuracy of data flows and theimplementation of related controls are critical for the integrity of the estimatedimpairment provisions.

C. auditor's Response

Audit Procedures included but were not limited to the following:

We have started our audit procedures with understanding of the internalcontrol environment related to Impairment loss allowance. Our procedures over internalcontrols focused on recognition and measurement of impairment loss allowance. We assessedthe design and tested the operating effectiveness of the selected key controls implementedby the company.

We also assessed whether the impairment methodology used by the companyis in accordance with the assumptions and methodology approved by the Board of Directorsof the company which is based on and in compliance with Ind AS 109 "FinancialInstruments".

Accordingly we assessed the approach of the company regardingdefinition of Default Probability of Default (PD) Loss Given Default (LGD) andincorporation of forward-looking information for the calculation of EcL.

For loans and advances which are assessed for impairment on a portfoliobasis we performed particularly the following procedures:

• Read the Company's policies for identificationclassification and assessing compliance for Stage 3 / NPAs customers in line with the IRAcnorms;

• We understood the design reliability and operatingeffectiveness of key data inputs and related management controls;

• We performed substantial audit procedure relating toidentification and classification of Stage 3 / NPAs by the company.

• We tested the identification / grouping of the loan accountsmapped with the customer code as identified by the management;

• We tested the exception reports generated from thecompany's software systems where the loan accounts have been recorded.

• We performed analytical procedures to identify possible cases ofevergreening of loans and tested these on sample basis.

• We checked the stage classification as at the balance sheet dateas per the definition of Default of the company and Reserve Bank of India circulars issuedfrom time to time;

• We validated the ECL Model and its calculation by involving ourInformation Technology Expert;

• We have checked on sample basis that the stage classificationfor the borrowers has been given in accordance with the Resolution Framework issued byReserve Bank of India (the ‘RBI') and the Board approved policy for EcLprovisioning and stage classification with respect to such accounts;

• We have verified whether the ECL provision is made in accordancewith the Board Approved Policy in this regard;

• We have also calculated the ECL provision manually for selectedsamples;

• We have assessed the assumptions made by the Company in makingaccelerated provision considering forward looking information and based on an event in aparticular geographical range;

• With respect to additional provision made by the company onaccount of the impact of coVID-19 pandemic we broadly reviewed the underlying assumptionsand estimates used by the management for the same but as the extent of impact is dependenton future developments which are highly uncertain we have primarily relied on thoseassumptions and estimates. These assumptions and estimates are a subject matter ofperiodic review by the company; and

• We have assessed disclosure requirements for classification andidentification of Stage 3/ NPAs in accordance with RBi circulars including those issuedspecifically issued for coVID-19 related matters.

For loans and advances which are written off during the year underaudit we read and understood the methodology and policy laid down and implemented by thecompany in this regards along with its compliance on sample basis.

Information Other than the Standalone Financial

Statements and Auditor's Report Thereon

7. The company's Board of directors are responsible for the otherinformation. The other information comprises the information included in thecompany's annual report like Management Discussion and Analysis Director'sReport and Corporate Governance Report but does not include the Standalone FinancialStatements and our auditors' report thereon which we obtained prior to the date ofthis auditor's report and Annual Report which is expected to be made available tous after that date.

8. Our opinion on the Standalone Financial Statements does not coverthe other information and we do not express any form of assurance conclusion thereon.

9. 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.

Management's responsibility for the Standalone FinancialStatements

10. The Company's Board of Directors is responsible for thematters stated in section 134(5) of the Act with respect to the preparation of theseStandalone Financial Statements that give a true and fair view of the state of affairsprofit and other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian accounting standards ("Ind AS") specified under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended.

11. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the Standalone Financial Statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.

12. In preparing the Standalone Financial Statements the management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the management either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

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

Auditor's responsibilities for the audit of the Standalone

Financial Statements

14. 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 ofassurance but is not a guarantee that an audit conducted in accordance with SAs willalways detect a material misstatement when it exists. Misstatements can arise from fraudor error and are considered material if individually or in the aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese Standalone Financial Statements.

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

15.1 Identify and assess the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate 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.

15.2 obtain an understanding of internal control relevant to the auditin order to design audit procedures that are appropriate in the circumstances. undersection 143(3)(i) of the act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to StandaloneFinancial Statements in place and the operating effectiveness of such controls.

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

15.4 conclude on the appropriateness of the management's use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the Standalone Financial Statements or if suchdisclosures are inadequate to modify our opinion. our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the company to cease to continue as a going concern.

15.5 Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

16. 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.

17. We also provide those charged with governance with a statement thatwe have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

18. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current year 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.

Other Matter

19. The comparative financial statements of the Company for the yearended 31 March 2021 included in Standalone Financial Statements were audited by the thenJoint statutory auditors "Haribhakti & Co. LLP Chartered Accountants" and"Pijush Gupta & Co. Chartered Accountants" whose reports dated 29 April2021 expressed an unmodified opinion on those financial statements. our opinion is notmodified in respect of this matter.

Report on Other Legal and Regulatory Requirements

20. 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 the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

21. As required by Section 143(3) of the Act we report that:

21.1 We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

21.2 In our opinion proper books of account as required by law havebeen kept by the company so far as it appears from our examination of those books.

21.3 The standalone balance sheet the standalone statement of profitand loss including other comprehensive income the statement of changes in equity and thestandalone cash flow statement dealt with by this Report are in agreement with the booksof account.

21.4 in our opinion the aforesaid Standalone Financial Statementscomply with the Ind AS prescribed under section 133 of the Ac: read with the companies(Indian Accounting Standards) Rules 2015 as amended;

21.5 On the basis of the written representations received from thedirectors as on 31 March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2022 from being appointed as a director in termsof Section 164(2) of the Act.

21.6 With respect to the adequacy of the internal financial controlswith reference to Standalone Financial Statements of the company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B".

21.7 With respect to the other matter to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Act:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid/ provided by the Company to its directorsduring the year is in accordance with the provisions of section 197 of the Act;

22. With respect to the other matters to be included in theAuditor'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 tothe explanations given to us we report as under:

22.1 The Company has disclosed the impact of pending litigations as at31 March 2022 on its financial position in its Standalone Financial Statements - ReferNote 49 to the Standalone Financial Statements;

22.2 The company has made provision as required under the applicablelaw or Ind AS for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Note 10 to the Standalone Financial Statements;

22.3 There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

22.4 (a) The management has represented to us that to the best of itsknowledge 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 whether directly or indirectly lend to or investin other persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries.

(b) The management has also represented to us to the best of itsknowledge and belief that no funds have been received by the Company from any person(s)or entity(ies) including foreign entities ("Funding Parties") with theunderstanding whether recorded in writing or otherwise that the Company shall whetherdirectly or indirectly lend to or invest in other persons or entities identified in anymanner whatsoever by or on behalf of the Funding Party ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries.

(c) Based on such audit procedures that were considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause 22.4(a) and 22.4(b) contain any materialmisstatement.

22.5 As stated in Note 30 to the Standalone Financial

Statements

(a) The final dividend proposed in the previous year declared andpaid by the company during the year is in accordance with Section 123 of the Act asapplicable.

(b) The interim dividend declared and paid by the company during theyear and until the date of this report is in compliance with Section 123 of the Act.

(c) The Board of Directors of the company have not proposed finaldividend for the year. As such the interim dividend aggregating to Rs. 20/-per share (i.e.200 %) shall be the final dividend for the financial year 2021-22 . The amount of dividenddeclared is in accordance with section 123 of the Act as applicable.

For Sundaram & Srinivasan For Khimji Kunverji & Co LLP
chartered Accountants chartered Accountants
Firm Registration number - 004207S Firm Registration number - 105146W/W- 100621
P Menakshi Sundaram Gautam Shah
Partner Partner
Membership number: 217914 Membership number: 117348
uDIN: 22217914AHYPLD3562 uDIN:22117348AHYPWL1328
Place: Mumbai Place: Mumbai
date: 28 April 2022 Date: 28 April 2022

ANNEXURE A

TO THE INDEPENDENT AUDITOR'S REPORT

Annexure A to the Independent Auditor's Report on the StandaloneFinancial Statements of Shriram Transport Finance Company Limited for the year ended 31March 2022

(Referred to in paragraph 20 under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

To the best of our information and according to the explanationsprovided to us by the Company and the books of account and

records examined by us in the normal course of audit we state that:

i. (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipment("PPE") and relevant details of right-of-use assets.

The Company is maintaining proper records showing full particulars ofintangible assets.

(b) The Company has a regular programme of physical verification of itsPPE by which all PPE are verified in a phased manner. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its assets. In our opinion and according to the information and explanationsgiven to us no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanationsgiven to us and on the basis of our examination of the records of the Company the titledeeds of all the immovable properties (other than properties where the Company is thelessee and the lease agreements are duly executed in favour of the lessee) disclosed inthe financial statements are held in the name of the Company.

(d) In our opinion and according to the information and explanationsgiven to us the Company has not revalued its PPE (including Right of Use assets) andintangible assets or both during the year.

(e) According to the information and explanations given to us and onthe basis of our examination of the records of the Company no proceedings have beeninitiated during the year or are pending against the Company as at 31 March 2022 forholding any benami property under the Benami Transactions (Prohibition) Act 1988 (45 of1988 as amended in 2016) and rules made thereunder. Refer note 84 to the StandaloneFinancial Statements.

ii. (a) The Company is in the business of providing loans and does nothave any physical inventories. Accordingly the provision of clause 3(ii)(a) of the Orderis not applicable to it.

(b) During the year the Company has availed sanctioned working capitallimit in excess of Rs. 5 crores from Banks or Financial Institutions on the basis ofsecurity of Loans. Based on our examination of the records of the company the quarterlyreturns/ statements filed by the company with the said bank are in agreement with thebooks of accounts maintained by the Company.

iii. (a) Since the Company's principal business is to give loans.Accordingly the provision of clause 3(iii)(a) of the Order is not applicable to it.

(b) The Company being a Non-Banking Financial Company(‘NBFC') registered under provisions of RBI Act 1934. In our opinion andaccording to the information and explanations given to us the investments madeguarantees provided security given and the terms and conditions of the grant of all loansand advances in the nature of loans and guarantees provided during the year are primafacie not prejudicial to the Company's interest.

(c) The Company being a Non-Banking Financial Company(‘NBFC') registered under provisions of RBI Act 1934 and rules madethereunder in pursuance of its compliance with provisions of the said Act/Rulesparticularly the Income Recognition Asset Classification and Provisioning Normsmonitors repayments of principal and payment of interest by its customers as stipulated.In our opinion and according to the information and explanations given to us in respectof loans and advances in the nature of loans the schedule of repayment of principal andpayment of interest has been stipulated and in cases where repayment of principal andpayment of interest is not received as stipulated the cognizance thereof is taken by theCompany in course of its periodic regulatory reporting. Refer notes 12 and 63 to theStandalone Financial Statements for summarised details of such loans/advances which arenot repaid by borrowers as per stipulations. According to the information and explanationmade available to us reasonable steps are taken by the Company for recovery thereof.

(d) The Company being a NBFC registered under provisions of RBI Act1934 and rules made thereunder in pursuance of its compliance with provisions of the saidAct/Rules particularly the Income Recognition Asset Classification and ProvisioningNorms monitors and report total amount overdue including principal and/or payment ofinterest by its customers for more than 90 days. In cases where repayment of principal andpayment of interest is not received as stipulated the cognizance thereof is taken by thecompany in course of its periodic regulatory reporting. Refer notes 12 and 63 to theStandalone Financial Statements for summarised details of such loans/advances which arenot repaid by borrowers as per stipulations. According to the information and explanationmade available to us reasonable steps are taken by the company for recovery thereof.

(e) Since the company's principal business is to give loans.accordingly the provision of clause 3(iii)(e) of the order is not applicable to it.

(f) Based on our audit procedures according to the information andexplanation made available to us the Company has not granted any loans or advances in thenature of loans either repayable on demand or without specifying any terms or period ofrepayment during the year.

iv. According to the information and explanation given to us theCompany has not granted any loans made investments or provided guarantees incontravention of provisions of Section 185 of the Act. The Company has complied with theprovisions of Section 186(1) of the Act; the other provisions of Section 186 of the Actare not applicable to the Company.

v. In our opinion and according to the information and explanationsgiven to us the Company being a non-banking financial company registered with the ReserveBank of India the provisions of sections 73 to 76 or any other relevant provisions of theAct and the Companies (Acceptance of Deposits) Rules 2014 as amended with regard to thedeposits accepted are not applicable to the Company. We are informed by the Managementthat no order has been passed by the Company Law Board National Company Law Tribunal orReserve Bank of India or any Court or any other Tribunal on the Company in respect of theaforesaid deposits.

vi. The Central Government has not prescribed the maintenance of costrecords under sub-section (1) section 148 of the Act for the business activities carriedout by the Company. Accordingly the provision of clause 3(vi) of the Order is notapplicable to the Company.

vii. (a) In our opinion and according to the information andexplanations given to us the Company has generally been regular in depositing undisputedstatutory dues relating to amounts deducted/accrued in the books of account in respect ofundisputed statutory dues including Goods and Services Tax provident fundemployees' state insurance income- tax sales-tax service tax duty of customsduty of excise value added tax cess and any other material statutory dues applicable toit with the appropriate authorities during the year.

According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax Goods and Services Tax duty of customs cess and any other material statutorydues were in arrears as at 31 March 2022 for a period of more than six months from thedate they became payable.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company did not have dues which havenot been deposited as on March 31 2022 except for the following:

Name of the statute Nature of dues Amount* (Rs. In crores) Period to which the amount relates @ Forum where dispute is pending
Income Tax Act 1961 Income Tax demands 35.25 A.Y. 2018-19 CIT (Appeals)
Income Tax Act 1961 Income Tax demands 13.44 A.Y. 2017-18 ITAT
Income Tax Act 1961 Income Tax demands 26.10 A.Y. 2016-17 Madras High Court
Income Tax Act 1961 Income Tax demands 5.46 A.Y. 2014-15 Madras High Court
Income Tax Act 1961 Income Tax demands 5.79 A.Y. 2014-15 Assessing Officer
Income Tax Act 1961 Income Tax demands 1.80 A.Y. 2014-15 CIT (Appeals)
Income Tax Act 1961 Income Tax demands 1.53 A.Y. 2013-14 Madras High Court
Income Tax Act 1961 Income Tax demands 5.02 A.Y. 2013-14 Assessing Officer
Income Tax Act 1961 income tax demands 0.47 A.Y. 2012-13 Madras High court
Income Tax Act 1961 income tax demands 5.27 A.Y. 2012-13 Assessing officer
Income Tax Act 1961 income tax demands 10.00 A.Y. 2011-12 Assessing officer
Income Tax Act1961 income tax demands 9.21 A.Y. 2010-11 Assessing officer
Income Tax Act 1961 income tax demands 10.26 A.Y. 2009-10 Madras High court
Income Tax Act 1961 income tax demands 1.84 A.Y. 2008-09 Madras High court
Income Tax Act 1961 income tax demands 0.27 A.Y. 2007-08 Madras High court
Income Tax Act 1961 income tax demands 0.08 A.Y. 2006-07 Assessing officer
Finance Act 1994 (Service tax) Service tax on interest on hypothecation loans 1768.66 F.Y. 2005-06 to April 01 2017 to June 30 2017 Mumbai High court
Finance Act 1994 (Service tax) Service tax demand on securitisation collection commission 192.88 F.Y. 2008-09 to 2014-2015 cESTAT (custom Excise and Service tax appellate tribunal)
Finance Act 1994 (Service tax) Service tax on hire purchase and lease transaction 3.90 1st March 2006 to 31st March 2010 Supreme court
Maharashtra Value Added tax Value added tax 0.29 F.Y. 2016-17 Joint commissioner of Sales tax- Mazgaon
Maharashtra Value Added tax Value added tax 0.02 F.Y. 2015-16 Joint commissioner of Sales tax - Bandra
Maharashtra Value Added tax Value added tax 0.79 F.Y. 2014-15 Joint commissioner of Sales tax - Mazgaon
Maharashtra Value Added tax Value added tax 0.01 F.Y. 2014-15 Joint commissioner of Sales tax - Bandra
Maharashtra Value Added tax Value added tax 0.21 F.Y. 2012-13 to 2013-14 Deputy commissioner of Sales tax - Appeals - Mumbai
Maharashtra Value Added tax Value added tax 5.40 F.Y. 2007-08 to 2013-14 Maharashtra Sales tax tribunal
Maharashtra Value Added tax Value added tax 0.00# F.Y. 2006-07 Deputy commissioner of Sales tax - Appeals - Mumbai
Maharashtra Value Added tax Value added tax 0.00# F.Y. 2005-06 Maharashtra Sales tax tribunal - Pune
Andhra Pradesh Value Added tax Value added tax 0.12 F.Y. 2010-11 to 2012-13 High court of telangana - Hyderabad
Andhra Pradesh Value Added tax Value added tax 3.27 F.Y 2009-10 to 2010-11 and 1st April 2011 to 31st August 2012 High court of telangana - Hyderabad
Andhra Pradesh Value Added tax Value added tax 3.48 F.Y. 2005-06 to 2008-09 High court of Andhra Pradesh - Vijaywada
Rajasthan Value Added tax Value added tax 1.59 F.Y. 2012-13 to 2015-16 And 1st April 2016 to 4th Nov 2016 Rajasthan tax tribunal Ajmer
Rajasthan Value added Tax Value added tax 1.16 F.Y. 2006-07 to 2011-12 Supreme court - Delhi
Karnataka Value added Tax Value added tax 8.07 F.Y. 2010-11 to 2016-17 High court of Karnataka
Orissa Value added Tax Value added tax 0.09 F.Y. 2008-09 to 2012-13 DccT - Bhubaneshwar
Telangana Value added Tax Value added tax 9.81 F.Y. 2013-14 to 2016-17 and april 17 to June 17 High court of Telangana
Tamil Nadu Value added Tax Value added tax 3.73 F.Y. 2014-15 to 2016-17 and april 17 to June 17 The company is in the process of filing an appeal with Madras High court.
Tamil Nadu Value added Tax Value added tax 2.90 F.Y. 2006-07 to 2013-14 Supreme court - Delhi

*Above amounts are net of amount paid under protest wherever paid.

# Amounts less than Rs. 1.00 lac are presented as Rs. 0.00 crores @A.Y. = assessment Year F.Y. = Financial Year

viii. In our opinion and according to the information and explanationsgiven to us and on the basis of our examination of the records of the company we confirmthat we have not come across any transactions not recorded in the books of account whichhave been surrendered or disclosed as income during the year in the tax assessments underthe income Tax act 1961 (43 of 1961).

ix. (a) in our opinion the company has not defaulted in repayment ofloans or other borrowings to financial institutions banks government and dues todebenture holders or in the payment of interest thereon to any lender.

(b) according to the information and explanations given to us and onthe basis of our audit procedures we report that the company has not been declared wilfuldefaulter by any bank or financial institution or government or any government authorityor any other lender.

(c) in our opinion and according to the information and explanationsgiven to us the company has utilized the money obtained by way of term loans from bankduring the year for the purposes for which they were obtained other than temporaryparking in cash credit account for a few days at the end of the year pending utilizationtowards purpose for which the same are obtained.

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

(e) & (f) The company has not taken any funds from any entity orperson on account of or to meet the obligations of its associate. The company does nothave any subsidiaries or joint ventures.

x. (a) according to the information and explanations given to us and onthe basis of our examination of the records of the company the company has not raised anymoneys raised by way of further public offer during the current financial year. in ouropinion monies raised by the company by way of debt instruments and term loans wereapplied for the purposes for which those were obtained though idle/ surplus funds whichwere not required for immediate utilization were gainfully invested in liquid assetspayable on demand.

(b) according to the information and explanations given to us and onthe basis of our examination of the records of the company the company has madepreferential allotment of equity shares during the year. The company has complied with therelevant provisions of the Ac: in connection with the funds raised through preferentialallotment and the same have been utilised for the purposes for which they were raised

xi. (a) During the course of our examination of the books and recordsof the company carried out in accordance with the generally accepted auditing practicesin india and according to the information and explanations given to us no material fraudby the company or on the company has been noticed or reported during the course of ouraudit other than the instances of fraud noticed and reported by the management in termsof the regulatory provisions applicable to the company amounting to Rs. 3.14 crorecomprising of 2 instances.

(b) In our opinion and according to the information and explanationsgiven to us no report under sub-section (12) of section 143 of the Act has been filed bythe auditors in Form ADT-4 as prescribed under rule 13 of companies (Audit and auditors)Rules 2014 with the central Government.

(c) According to the information and explanations given to us therewere no whistle blower complaints received during the year by the company.

xii. 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 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 during the course of our audit the reports ofthe internal Auditor(s) for the period under audit issued to the company during the yeartill date in determining the nature timing and extent of our audit procedures inaccordance with the guidance provided in SA 610 "using the work of internalauditors".

xv. according to the information and explanations given to us in ouropinion during the year the company has not entered into any non-cash transactions withits directors or persons connected with its directors. accordingly paragraph 3(xv) of theorder is not applicable to the company and hence provisions of section 192 of the Act2013 are not applicable to the company.

xvi. (a) The company is required to be registered under Section 45-iAof the Reserve Bank of india Act 1934 and the company has obtained the requiredregistration.

(b) According to the information and explanations given to us thecompany has not conducted any Non-Banking Financial or Housing Finance activities withoutobtaining a valid coR from the Reserve Bank of india as per the Reserve Bank of india Act1934.

(c) According to the information and explanations given to us thecompany is not a core investment company (‘cic') as defined under theRegulations by the Reserve Bank of india.

(d) As per information provided in course of our audit the Group towhich the company belongs has 3 cic's as defined in the core investment companies(Reserve Bank) Directions 2016.

xvii. The company has not incurred cash losses during the financialyear covered by our audit and the immediately preceding financial year.

xviii. During the year Haribhakti & co. LLP chartered Accountantsand Pijush Gupta & co. chartered Accountants the joint Statutory auditors of thecompany have resigned with effect from 15 September 2021 consequent to amended rules/regulations applicable to the company. (i.e. vide RBi circular dated 27 April 2021).According to the information and explanations given to us there have been no issuesobjections or concerns raised by the said outgoing joint statutory auditors of thecompany.

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 along with details provided in Note 47 to theStandalone Financial statements which describe the maturity analysis of assets &liabilities other information accompanying the financial statements our knowledge of theBoard of Directors and management plans and based on our examination of the evidencesupporting the assumptions nothing has come to our attention which causes us to believethat any material uncertainty exists as on the date of the audit report indicating thatthe company is not capable of meeting its liabilities existing at the date of balancesheet as and when they fall due within a period of one year from the balance sheet date.We however state that this is not an assurance as to the future viability of thecompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the company as and when they fall due.

xx. (a) According to the information and explanations given to us andbased on our examination of the records of the Company it is not required to transfer anyunspent amount pertaining to the year under report to a Fund specified in Schedule VII tothe companies Ac: in compliance with second proviso to sub section 5 of section 135 of thesaid Ac:

(b) According to the information and explanations given to us and basedon our examination of the records of the Company there is no amount which is remainingunspent under sub section 5 of section 135 of the Act pursuant to any ongoing CSR project.

xxi. Information of qualification remarks with respect to Associate asreported by Component auditor in their CARO report are as follows:

Sr. No. Name of the Company CIN Holding Company/ subsidiary/Associate/ Joint Venture Clause number of the CARo report which is qualified or adverse
1 Shriram Automall India Limited U50100TN2010PLC074572 Associate and its subsidiaries Clause vii (a)
For Sundaram & Srinivasan For Khimji Kunverji & Co LLp
Chartered Accountants Chartered Accountants
Firm Registration Number - 004207S Firm Registration Number - 105146W/W- 100621
p Menakshi Sundaram Gautam Shah
Partner Partner
Membership Number: 217914 Membership Number: 117348
UDIN: 22217914AHYPLD3562 UDIN:22117348AHYPWL1328
Place: Mumbai Place: Mumbai
Date: 28 April 2022 Date: 28 April 2022

ANNEXURE B

TO THE INDEPENDENT AUDITOR'S REPORT

Annexure B to the Independent Auditor's report on the StandaloneFinancial Statements of Shriram Transport Finance Company Limited for the year ended 31March 2022

(Referred to in paragraph 21.6 under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

Report on the Internal Financial Controls with reference to theaforesaid Standalone Financial Statements under Clause (i) of Sub-section 3 of Section 143of the Companies act 2013.

opinion

1. We have audited the internal financial controls with reference tothe Standalone Financial Statements of Shriram Transport Finance Company Limited("the Company") as at 31 March 2022 in conjunction with our audit of theStandalone Financial Statements of the Company for the year ended on that date.

2. In our opinion the Company has in all material respects anadequate internal financial controls with reference to the Standalone Financial Statementsand such internal financial controls were operating effectively as at 31 March 2022 basedon the internal controls over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India ("the Guidance Note").

Management's responsibility for Internal Financial Controls

3. The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal controls over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note. These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to the Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.

Auditor's responsibility

4. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to the Standalone Financial Statements based onour audit. We conducted our audit in accordance with the Guidance Note and the Standardson Auditing ("SA") prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls with reference to the StandaloneFinancial Statements. Those SAs and the Guidance Note require that we comply with theethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to the Standalone FinancialStatements were established and maintained and whether such controls operated effectivelyin all material respects.

5. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system with reference to theStandalone Financial Statements and their operating effectiveness. Our audit of internalfinancial controls with reference to the Standalone Financial Statements includedobtaining an understanding of internal financial controls with reference to the StandaloneFinancial Statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the Standalone FinancialStatements whether due to fraud or error.

6. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to the Standalone Financial Statements. meaning ofinternal Financial Controls with reference to the Standalone Financial Statements

7. A company's internal financial controls with reference to theStandalone 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 controls with reference to theStandalone Financial Statements include those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of Standalone Financial Statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the Standalone Financial Statements.

Inherent Limitations of Internal Financial Controls with reference tothe Standalone Financial Statements

8. Because of the inherent limitations of internal financial controlswith reference to the Standalone Financial Statements including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls with reference to the Standalone Financial Statements tofuture periods are subject to the risk that the internal financial controls with referenceto the Standalone Financial Statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

For Sundaram & Srinivasan For Khimji Kunverji & Co LLp
Chartered Accountants Chartered Accountants
Firm Registration Number - 004207S Firm Registration Number - 105146W/W- 100621
p Menakshi Sundaram Gautam Shah
Partner Partner
Membership Number: 217914 Membership Number: 117348
UDIN: 22217914AHYPLD3562 UDIN:22117348AHYPWL1328
Place: Mumbai Place: Mumbai
Date: 28 April 2022 Date: 28 April 2022

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