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SRF Ltd.

BSE: 503806 Sector: Industrials
NSE: SRF ISIN Code: INE647A01010
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OPEN 2502.00
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VOLUME 10120
52-Week high 2773.00
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P/E 42.66
Mkt Cap.(Rs cr) 73,539
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Sell Price 0.00
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OPEN 2502.00
CLOSE 2497.70
VOLUME 10120
52-Week high 2773.00
52-Week low 1730.39
P/E 42.66
Mkt Cap.(Rs cr) 73,539
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

SRF Ltd. (SRF) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

SRF LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of SRF Limited (the"Company") which comprise the standalone balance sheet as at 31 March 2022 andthe standalone statement of profit and loss (including other comprehensive income)standalone statement of changes in equity and standalone statement of cash flows for theyear then ended and notes to the standalone financial statements including a summary ofsignificant accounting policies and 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 ("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

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our opinion on the standalone financialstatements.

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 of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Description of Key Audit Matter

Accounting for derivatives

The key audit matter How the matter was addressed in our audit
An important element of Company's fund-raising strategy involves various types of borrowings including foreign currency denominated borrowings and a combination of fixed and floating interest rates and also foreign currency denominated loans and advances to other parties. The Company's operating activities are also exposed to significant foreign exchange risk (refer to note 38 of the standalone financial statements). In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
The Company uses derivative financial instruments to mitigate foreign currency risk and interest rate risk primarily through foreign currency forward exchange contracts and interest rate swaps. - Tested the design implementation and operating effectiveness of controls over the Company's treasury and other related functions which directly impact the relevant account balances and transactions including hedge accounting.
- For selected samples via statistical sampling obtained external confirmations from counterparties of the year end positions as well as agreed to original agreements.
Accounting for derivatives
The key audit matter How the matter was addressed in our audit
Further the Company has been using hedge relationship designation as per criteria set out in relevant Indian accounting standards. Accounting thereof and related presentation and disclosures of these transactions require significant judgement. - Performed sample tests of valuation and accounting of these transactions. In doing so we have involved valuation specialists to assist us in carrying out aforesaid procedure as considered necessary.
Given the significant level of judgement and estimation involved and the quantitative significance we have determined this to be a key audit matter. - Assessed the adequacy of disclosures in the financial statements in respect of both non-derivative and derivative financial instruments.

Other Information

The Company's Management and Board of Directors are responsible for theother information. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements and ourauditor'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.

Management's and Board of Directors' Responsibilities for theStandalone Financial Statements

The Company's Management and Board of Directors are 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/ loss and other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements the Management andBoard of Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.

The Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

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.

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 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.

• Obtain an understanding of internal control relevant to theaudit in 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 financialstatements in 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 the Management andBoard of Directors.

• Conclude on the appropriateness of the Management and Board ofDirectors use of the going concern basis of accounting in preparation of standalonefinancial statements 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 disclosures areinadequate 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 conditions maycause 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 the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves 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 wehave 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.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 Section 143(11) of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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

a) 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.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The standalone balance sheet the standalone statement of profit andloss (including other comprehensive income) the standalone statement of changes in equityand the standalone statement of cash flows dealt with by this Report are in agreement withthe books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act.

e) 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.

f) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

a) The Company has disclosed the impact of pending litigations as at 31March 2022 on its financial position in its standalone financial statements - Refer Note31 to the standalone financial statements.

b) The Company has made provision as required under the applicable lawor accounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts - Refer Note 38 to the standalone financial statements.

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

d) (i) The management has represented that to the best of itsknowledge and belief as disclosed in the note 41 (g)

(viii) to the accounts no funds have been advanced or loaned orinvested (either from borrowed funds or share premium or any other sources or kind offunds) by the Company to or in any other persons or entities including foreign entities("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall:

• directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Company("Ultimate Beneficiaries") or

• provide any guarantee security or the like on behalf of theUltimate Beneficiaries.

(ii) The management has represented that to the best of its knowledgeand belief as disclosed in the note 41 (g) (ix) to the accounts no funds have beenreceived by the Company from any persons or entities including foreign entities("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall:

• directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or

• provide any guarantee security or the like on behalf of theUltimate Beneficiaries.

(iii) Based on the audit procedures that have been consideredreasonable and appropriate in the circumstances nothing has come to our notice that hascaused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e)contain any material mis-statement.

e) The dividend declared or paid during the year by the Company is incompliance with Section 123 of the Act.

(C) With respect to the matter to be included in the Auditor's Reportunder Section 197(16) of the Act:

In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) ofthe Act which are required to be commented upon by us.

Annexure A to the Independent Auditor's Report on StandaloneFinancial

Statements

With reference to the Annexure A referred to in the IndependentAuditor's Report of even date to the members of the Company on the standalone financialstatements for the year ended 31 March 2022 we report the following:

(i) (a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment.

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

(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 a regularprogramme of physical verification of its Property Plant and Equipment by which allproperty plant and equipment are verified in a phased manner over a period of threeyears. In accordance with this programme certain property plant and equipment wereverified during the year. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Asinformed to us 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 immovable properties where the Company is the lessee and the leasesagreements are duly executed in favour of the lessee) disclosed in the standalonefinancial statements are held in the name of the Company except for the following whichare not held in the name of the Company:

Description of property Gross carrying value as at 31 March 2022 (Rs in Crores) Held in the name of Whether promoter director or their relative or employee Period held since Reason for not being held in the name of the Company/ Remarks
Land at Bharuch Da- hej Gujarat 109.29 (carried cost) Gujarat Industrial Development Corporation ('GIDC') at Dahej Gujarat No From June 2009 onwards (by multiple allotment orders) The execution of lease deed of land in respect of 1165437 square meters of leasehold land already allotted (out of a total of 1181776 square meters) to the Company is pending. We understand that as a process agreed with GIDC the same will be executed once the entire/ substantial portion of the above piece of land is allotted/ handed over to the Company.

(d) 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 revaluedits Property Plant and Equipment (including Right of Use assets) or intangible assets orboth during the year.

(e) According to information and explanations given to us and on thebasis of our examination of the records of the Company there are no proceedings initiatedor pending against the Company for holding any benami property under the Prohibition ofBenami Property Transactions Act 1988 and rules made thereunder.

(ii) (a) The inventories except goods-in-transit have been physicallyverified by the management during the year. For goods-in- transit subsequent evidence ofreceipts till date of the report has been linked with inventory records. In our opinionthe frequency of such verification is reasonable and procedures and coverage as followedby management were appropriate. No discrepancies were noticed on verification between thephysical stocks and the book records that were more than 10% in the aggregate of eachclass of inventory.

(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 beensanctioned working capital limits in excess of five crore rupees in aggregate from banksor financial institutions on the basis of security of current assets. In our opinion thequarterly returns or statements filed by the Company with such banks or financialinstitutions are in agreement with the books of account of the Company.

(iii) 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 providedany security or granted any advances in the nature of loans secured or unsecured tocompanies firms limited liability partnership or any other parties during the year. TheCompany has made investments in provided guarantees and granted loans to companies andother parties in respect of which the requisite information is as below. The Company hasnot made any investments in provided guarantees and granted loans to firms or limitedliability partnership.

(a) Based on the audit procedures carried out by us and as per theinformation and explanations given to us the Company has provided loans or stoodguarantee to any other entity as below:

Particulars Guarantees Loans
(Rs Crores) (Rs Crores)
Aggregate amount during the year
- Subsidiaries 190.84 230.20
- Others (Employees) - 28.12
Balance outstanding as at the balance sheet date
- Subsidiaries 1614.94 565.72
- Others (Employees) HT>- 22.75

(b) According to the information and explanations given to us and basedon the audit procedures conducted by us in our opinion the investments made andguarantees provided during the year and the terms and conditions of the grant of loansand guarantees provided during the year are prima facie not prejudicial to the interestof the Company.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company in the case of loans given inour opinion the repayment of principal and payment of interest has been stipulated and therepayments or receipts have been regular except for the loan of Rs 2.75 Crores given toSRF Altech Limited which is repayable on demand. As informed to us the Company hasdemanded repayment of the loan during the year and the same has been received during theyear. The interest on this loan was not due during the year ended 31 March 2022. Thusthere has been no default on the part of the party to whom the money has been lent.Further the Company has not given any advance in the nature of loan to any party duringthe year.

(d) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there is no overdue amount formore than ninety days in respect of loans given. Further the Company has not given anyadvances in the nature of loans to any party 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 in our opinion followinginstance of loan falling due during the year was settled by a fresh loan:

Name of the party Aggregate amount settled by fresh loan Percentage of the aggregate to the total loans granted during the year
SRF Global BV Rs 227.45 Crores 88.05%

(f) According to the information and explanations given to us and onthe basis of our examination of the records of the Company in our opinion the Companyhas not granted any loans or advances in the nature of loans either repayable on demandor without specifying any terms or period of repayment except for the following loan to arelated party as defined in Clause (76) of Section 2 of the Companies Act 2013 ("theAct").

Particulars Related Party
Loan repayable on demand Rs 2.75 Crores
Percentage of loans granted to the total loans 1.06%

(iv) According to the information and explanations given to us and onthe basis of our examination of records of the Company in respect of investments made andloans guarantees and security given by the Company in our opinion the provisions ofSection 185 and 186 of the Companies Act 2013 ("the Act") have been compliedwith.

(v) The Company has not accepted any deposits or amounts which aredeemed to be deposits from the public. Accordingly clause 3(v) of the Order is notapplicable.

(vi) We have broadly reviewed the books of accounts maintained by theCompany pursuant to the rules prescribed by the Central Government for maintenance of costrecords under Section 148(1) of the Act in respect of its manufactured goods and are ofthe opinion 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 the information and explanations given to us andon the basis of our examination of the records of the Company in our opinion amountsdeducted / accrued in the books of account in respect of undisputed statutory duesincluding Goods and Services Tax ('GST') Provident fund Employees' State InsuranceIncome-Tax Duty of Customs Cess and other statutory dues have been regularly depositedby the Company with the appropriate authorities.

According to the information and explanations given to us and on thebasis of our examination of the records of the Company no undisputed amounts payable inrespect of Goods and Services Tax ('GST') Provident fund Employees' State InsuranceIncome-Tax Duty of Customs Cess and other statutory dues were in arrears as at 31 March2022 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company statutory dues relating toGoods and Service Tax Provident Fund Employees State Insurance Income-Tax Duty ofCustoms or Cess or other statutory dues which have not been deposited on account of anydispute are as follows:

Name of the statute Nature of the dues Amount* (Rs Crores) Period to which the amount relates Forum where dispute is pending Remarks if any
Central Excise Laws Excise Duty 9.32 1993-2002 Upto Commissioner (Appeals) None
Service Tax Laws Service Tax 1.58 2006-15 Upto Commissioner (Appeals)
0.98 2008-12 Customs Excise & Service Tax
Appellate Tribunal
Customs Law Customs Duty 1.27 2012-13 Supreme Court
0.27 2016-19 High Court
0.17 2002 Upto Commissioner (Appeals)
Sales Tax Laws Sales Tax 0.34 2015-16 High Court
4.97 1993-2017 Sales Tax Appellate Tribunal
7.68 1988-2017 Upto Commissioner (Appeals)
Income Tax Laws Income Tax 1.13 Assessment Year (AY) 1989-90 Supreme Court
22.66 AY 2016-17 Income Tax Appellate Tribunal
Goods & Service tax Laws Goods & Services Tax 0.23 2017-18 Upto Commissioner (Appeals)
Employees Provident Fund & Miscellaneous Provisions Act 1952 Provident Fund 0.21 0.30 2011-16 2011-13 EPF Appellate Tribunal Central Government Industrial Tribunal

The following matters which have been excluded from the above tablehave been decided in favour of the Company but the department has preferred appeals athigher levels. The details are given below:

Name of the statute Nature of the dues Amount* (Rs Crores) Period to which the amount relates Forum where dispute is pending Remarks if any
Income Tax Laws Income Tax 5.55 AY 2000-04 High Court None
Central Excise Laws Excise Duty 1.18 2.24 1994-95 1989-95 High Court Upto Commissioner (Appeals)
Customs Law Customs Duty 0.01 2012-13 Upto Commissioner (Appeals)

*The amounts disclosed are net of payments and include interest andpenalties wherever applicable.

Also refer to note 31 of the standalone financial statements withregard to income tax demand raised subsequent to year-end.

(viii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has notsurrendered or disclosed any transactions previously unrecorded as income in the books ofaccount in the tax assessments under the Income Tax Act 1961 as income during the year.

(ix) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company the Company has notdefaulted in repayment of loans and borrowing or in the payment of interest thereon to anylender.

(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 not beendeclared a wilful defaulter by any bank or financial institution or government orgovernment authority.

(c) In our opinion and according to the information and explanationsgiven to us by the management term loans were applied for the purpose for which the loanswere obtained other than Rs 200 Crores which remained unutilised as at 31 March 2022because the funds were received towards the end of the year. The Company has temporarilykept such unutilised balance in fixed deposits as at 31 March 2022.

(d) According to the information and explanations given to us and on anoverall examination of the balance sheet of the Company we report that no funds raised onshort-term basis have been used for long-term purposes by the Company.

(e) According to the information and explanations given to us and on anoverall examination of the standalone financial statements of the Company we report thatthe Company has taken funds from the following entity to meet the obligations of itssubsidiary as per details below:

Nature of fund taken Name of lender Amount involved Name of the relevant subsidiary Relationship Nature of transaction for which funds utilised Remarks if any
Term Loan HSBC Bank Rs 227.45 Crores SRF Global BV Subsidiary Repayment of loan due to SRF Limited None

(f) According to the information and explanations given to us andprocedures performed by us we report that the Company has not raised loans during theyear on the pledge of securities held in its subsidiaries. The Company does not have anyjoint ventures or associate companies.

(x) (a) The Company has not raised any moneys by way of initial publicoffer or further public offer (including debt instruments) during the year. Accordinglyclause 3(x)(a) of the Order is not applicable.

(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 not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly clause 3(x)(b) of the Order is not applicable.

(xi) (a) Based on examination of the books and records of the Companyand according to the information and explanations given to us considering the principlesof materiality outlined in Standards on Auditing we report that no fraud by the Companyor on the Company has been noticed or reported during the course of the audit.

(b) According to the information and explanations given to us noreport under sub-section (12) of Section 143 of the Act has been filed by the auditors inForm ADT-4 as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules 2014with the Central Government.

(c) As represented to us by the management there are no whistle blowercomplaints received by the Company during the year.

(xii) According to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly clause 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanationsgiven to us the transactions with related parties are in compliance with Sections 177 and188 of the Act where applicable and the details of the related party transactions havebeen disclosed in the standalone financial statements as required by the applicableaccounting standards.

(xiv) (a) Based on information and explanations provided to us and ouraudit procedures in our opinion the Company has an internal audit system commensuratewith the size and nature of its business.

(b) We have considered the internal audit reports of the Company issuedtill date for the period under audit.

(xv) In our opinion and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions with its directorsor persons connected to its directors and hence provisions of Section 192 of the Act arenot applicable to the Company.

(xvi) (a) The Company is not required to be registered under Section45-IA of the Reserve Bank of India Act 1934. Accordingly clause 3(xvi) (a) of the Orderis not applicable.

(b) The Company is not required to be registered under Section 45-IA ofthe Reserve Bank of India Act 1934. Accordingly clause 3(xvi) (b) of the Order is notapplicable.

(c) The Company is not a Core Investment Company (CIC) as defined inthe regulations made by the Reserve Bank of India. Accordingly clause 3(xvi)(c) of theOrder is not applicable.

(d) According to the information and explanations provided to us theGroup (as per the provisions of the Core Investment Companies (Reserve Bank) Directions2016) does not have more than one CIC.

(xvii) The Company has not incurred cash losses in the current year andin the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors duringthe year. Accordingly clause 3(xviii) of the Order is not applicable.

(xix) According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realisation 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 the Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.

(xx) In our opinion and according to the information and explanationsgiven to us there is no unspent amount under sub-section (5) of Section 135 of the Actpursuant to any project. Accordingly clauses 3(xx)(a) and 3(xx)(b) of the Order are notapplicable.

Annexure B to the Independent Auditors' report on the standalonefinancial statements of SRF Limited for the year ended 31 March 2022

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 (Referred to in paragraph 2(A)(f) under 'Report on Other Legaland Regulatory Requirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference tofinancial statements of SRF Limited ("the Company") as of 31 March 2022 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date. In our opinion the Company has in all material respectsadequate internal financial controls with reference to financial statements and suchinternal financial controls were operating effectively as at 31 March 2022 based on theinternal financial controls with reference to financial statements criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls with reference to financial statements. 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 financial statements were established and maintained and whether suchcontrols 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 financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.

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

Meaning of Internal Financial controls with Reference to FinancialStatements

A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles.

A company's internal financial controls with reference to financialstatements 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 financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial controls with Reference toFinancial Statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

For B S R & Co. LLP Chartered Accountants
Firm's Registration No.: 101248W/W-100022
Kaushal Kishore Partner
Place: Gurugram Membership No.: 090075
Date: 27 May 2022 UDIN: 22090075AJTEDQ5066

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