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Tata Chemicals Ltd.

BSE: 500770 Sector: Industrials
NSE: TATACHEM ISIN Code: INE092A01019
BSE 15:45 | 03 Mar 776.20 42.95
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NSE 15:31 | 03 Mar 776.45 42.80
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738.00

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782.00

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OPEN 736.00
PREVIOUS CLOSE 733.25
VOLUME 685360
52-Week high 782.25
52-Week low 197.40
P/E 34.21
Mkt Cap.(Rs cr) 19,774
Buy Price 772.00
Buy Qty 5.00
Sell Price 776.20
Sell Qty 800.00
OPEN 736.00
CLOSE 733.25
VOLUME 685360
52-Week high 782.25
52-Week low 197.40
P/E 34.21
Mkt Cap.(Rs cr) 19,774
Buy Price 772.00
Buy Qty 5.00
Sell Price 776.20
Sell Qty 800.00

Tata Chemicals Ltd. (TATACHEM) - Auditors Report

Company auditors report

To the Members of Tata Chemicals Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the Standalone Financial Statements of Tata Chemicals Limited (the Company) which comprise the Standalone Balance Sheet as at March 312020 and the Standalone Statement of Profit and Loss (including other comprehensive income) Standalone Statement of Changes in Equity and Standalone Statement of Cash Flows for the year then ended and notes to the Standalone Financial Statements including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as Standalone Financial Statements).

In our opinion and to the best of our information and according to the explanations given to us the aforesaid Standalone Financial Statements give the information required by the Companies Act 2013 (Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 312020 and profit and other comprehensive income changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note 34 of the Standalone Financial Statements in respect of a Scheme of Arrangement amongst Tata Chemicals Limited and Tata Consumer Products Limited (previously Tata Global Beverages Limited) and their respective shareholders and creditors (the 'Scheme') for demerger of Consumer Products Business of the Company. The Scheme has been given effect to from the Appointed Date of April 1 2019 as approved by the National Company Law Tribunal and which is deemed to be the demerger date for the purpose of accounting and consequently financial information in the statement of profit and loss account for the year ended March 312019 have been restated.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters.

Description of Key Audit Matter

Revenue recognition (refer notes 2.14 and 25 to the Standalone Financial Statements)

The Key Audit Matter (KAM)How the matter was addressed in our audit
Revenue is recognised when the control over the underlying products has been transferred to the customer.Our audit procedures included:
Due to the Company's sales under various contractual terms and across the country delivery to customers in different regions might take different time periods and may result in undelivered goods at the period end. We consider a risk of misstatement of the Financial Statements related to transactions occurring close to the year end as these transactions could be recorded in the incorrect financial period (cut-off). Focusing on the Company's revenue recognition for compliance with Ind AS;
 Testing the design implementation and operating effectiveness of the Company's manual and automated (Information Technology - IT) controls on recording revenue. We involved our IT specialists for IT testing. We focused on controls around the timely and accurate recording of sales transactions;
There is also a risk of revenue being overstated due to fraud resulting from pressure on the Company to achieve performance targets at the reporting period end. Accordingly fraud and cut-off risks in revenue recognition are considered as a key audit matter.
 Performing testing on selected statistical samples of revenue transactions recorded during the year. We verified contractual terms of invoices acknowledged delivery receipts and tested the transit time to deliver the goods. Our tests of detail focused on cut-off samples to verify that only revenue pertaining to current year is recognised based on terms and conditions set out in sales contracts and delivery documents.
 Assessing high risk manual journals posted to revenue to identify any unusual items.

Demerger of Consumer Products Business (refer note 34 to the Standalone Financial Statements)

The Key Audit MatterHow the matter was addressed in our audit
The Company has demerged its Consumer Products Business (CPB) division to Tata Consumer Products Limited (TCPL) ('the Demerger') pursuant to a Scheme of Arrangement ('the Scheme'). The Scheme was approved by the National Company Law Tribunal (NCLT) with an Appointed date of April 1 2019. Refer note 34 to the Standalone Financial Statements for details of the Scheme.Our audit procedures included:
 Obtaining and evaluating the Scheme for identification of the assets and liabilities to be transferred;
 Evaluating the accounting treatment of the Demerger for compliance with the applicable accounting standards and applicable tax and other statutes;
The demerger of the CPB division has significant measurement and disclosure impacts on the Company's Standalone Financial Statements. This involves identification of assets and liabilities to be transferred which is subject to the provisions of the Scheme and is accordingly considered a key audit matter. Assessing and testing the accounting entries recorded in the books by the Company in respect of the Demerger for compliance with the accounting treatment assessed above;  Assessing and testing the adequacy of the Company's disclosures in respect of the Demerger for compliance with applicable accounting standards.

Impairment evaluation of Investments in subsidiaries and joint ventures (refer notes 2.3.5 2.12 and 8 to the Standalone Financial Statements)

The Key Audit MatterHow the matter was addressed in our audit
The carrying amount of the investments in unlisted subsidiaries and joint ventures (held at cost less impairment) represents 29% of the Company's total assets.Our audit procedures included:
 Evaluating design and implementation and testing operating effectiveness of controls over the Company's process of impairment assessment and approval of forecasts;
The Company's investments in unlisted subsidiaries and joint ventures are carried at cost less any impairment. The investments are assessed for impairment when an indicator of impairment exists. With the spread of COVID-19 in India and globally demand loss is expected for the products of unlisted subsidiaries and joint ventures.
 Assessing the indicators for impairment of the unlisted subsidiaries and joint ventures and understanding Company's assessment of those indicators;
 Assessing the valuation methods used for determining recoverable amount financial position of the unlisted subsidiaries and joint ventures and assessing historical financial performance of those subsidiaries and joint ventures;
The impairment assessment involves use of estimates and judgements. The identification of an impairment event and the determination of impairment charge also requires the application of significant judgement by the Company. The judgement in particular is with respect to the timing quantity and estimation of future discounted cash flows of the underlying entities. It involves significant estimates and judgment due to the inherent uncertainty involved in forecasting and discounting future cash flows.
 understanding the basis and assumptions used for the financial forecasts;
 Testing the assumptions used in the discounted cash flow forecast analysis based on our knowledge of the Company and the markets in which the unlisted subsidiaries and joint ventures operate. We challenged these assumptions with the assistance of our valuations team;
In view of the significance of these investments and estimates and judgments involved we consider impairment evaluation of investments in unlisted subsidiaries and joint ventures to be a key audit matter.
 Comparing the carrying amount of investments with recoverable amount based on discounted cash flow analysis;
 Considering the adequacy of disclosures in respect of the investments in unlisted subsidiaries.

Litigations and claims (refer notes 2.3.4 2.22 19 and 45 to the Standalone Financial Statements)

The Key Audit MatterHow the matter was addressed in our audit
The Company operates in various States within India exposing it to a variety of different Central and State laws regulations and interpretations thereof. The provisions and contingent liabilities relate to ongoing litigations and claims with various authorities. Litigations and claims may arise from direct and indirect tax proceedings legal proceedings including regulatory and other government/department proceedings as well as investigations by authorities and commercial claims.Our audit procedures included:
 Obtaining an understanding of actual and potential outstanding litigations and claims against the Company from the Company's in-house Legal Counsel and other senior personnel of the Company and assessing their responses;
 Assessing status of the litigations and claims based on correspondence between the Company and the various tax/legal authorities and legal opinions obtained by the Company;
Resolution of litigations and claims proceedings may span over multiple years beyond March 31 2020 due to the complexity and magnitude of the legal matters involved and may involve protracted negotiation or litigation.
 Testing completeness of litigations and claims recorded by verifying the Company's legal expenses and the minutes of the board meetings;
The determination of a provision or contingent liability requires significant judgement by the Company because of the inherent complexity in estimating future costs. The amount recognised as a provision is the best estimate of the possible expenditure. The provisions and contingent liabilities are subject to changes in the outcomes of litigations and claims over time as new facts emerge as each legal case progresses and positions taken by the Company.
 Assessing and challenging the Company's estimate of the possible outcome of litigations and claims. This is based on applicable tax laws and legal precedence by involving our tax specialists in taxation related matters and internal legal counsel;
There is an inherent complexity and magnitude of potential exposures is significant across the Company. Significant judgment is necessary to estimate the likelihood timing and amount of the cash outflows interpretations of the legal aspects legislations and judgements previously made by the authorities. Accordingly this is identified as a key audit matter. Evaluating judgements made by the Company by comparing the estimates of prior year to the actual outcome;
 Assessing and testing the adequacy and completeness of the Company's disclosures in respect of litigations and claims.

Information Other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company's annual report but does not include the Financial Statements and our auditors' report thereon.

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

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

Management's and Board of Directors' Responsibility for the Standalone Financial Statements

The Company's Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the state of affairs profit/loss and other comprehensive income changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements management and Board of Directors are responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.

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

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

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

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

 Identify and assess the risks of material misstatement of the Standalone Financial Statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to Standalone Financial Statements in place and the operating effectiveness of such controls.

 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the Standalone Financial Statements made by the Management and Board of Directors.

 Conclude on the appropriateness of the Management's and Board of Directors use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the Standalone Financial Statements or if such disclosures are inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However future events or conditions may cause the Company to cease to continue as a going concern.

 Evaluate the overall presentation structure and content of the Standalone Financial Statements including the disclosures and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.

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

From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors' Report) Order 2016 (the Order) issued by the Central Government in terms of Section 143 (11) of the Act we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

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

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

c) The Standalone Balance Sheet the Standalone Statement of Profit and Loss (including other comprehensive income) the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31 2020 taken on record by the Board of Directors none of the directors is disqualified as on March 312020 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure B.

(B) With respect to the other matters to be included in the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at March 31 2020 on its financial position in its Standalone Financial Statements - Refer Notes 19 and 45 to the Standalone Financial Statements;

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

iii. There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company except for Rs 0.57 crores wherein legal disputes with regard to ownership have remained unresolved.

iv. The disclosures in the Standalone Financial Statements regarding holdings as well as dealings in specified bank notes during the period from November 8 2016 to December 30 2016 have not been made in these Financial Statements since they do not pertain to the financial year ended March 312020.

(C) With respect to the matter to be included in the Auditors' Report under Section 197(16) of the Act:

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

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/ W-100022
Vijay Mathur
Partner
MumbaiMembership No: 046476
May 15 2020UDIN : 20046476AAAABR1367

Annexure A to the Independent Auditors' Report - March 31 2020

With reference to the Annexure A referred to in the Independent Auditors' Report to the members of the Company on the Standalone Financial Statements for the year ended March 31 2020 we report the following:

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of property plant and equipment and investment properties.

(b) The Company has a programme of physical verification of its property plant and equipment and investment properties by which the property plant and equipment and investment properties are verified by the management according to a phased programme designed to cover all the items over a period of three years. In our opinion this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the policy the Company has physically verified certain property plant and equipment and investment properties during the year and we are informed that the discrepancies were not material and have been properly dealt with in the books of account.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company the title deeds of immovable properties of land and buildings as disclosed in Note 4 and Note 5 to the Standalone Financial Statements are held in the name of the Company except for freehold land in Mambattu Nellore admeasuring 162095.63 sq. meters and amounting to Rs 15.05 crore where the Company is in the process of entering into a Land Sale Agreement with the Government of Andhra Pradesh.

(ii) The inventory except for goods-in-transit and stocks lying with third parties has been physically verified by the management during the year. In our opinion the frequency of such verification is reasonable. In respect of stocks lying with third parties at the year-end written confirmations have been obtained. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us the Company has not granted any loans secured or unsecured to companies firms limited liability partnerships or other parties covered in the register maintained under Section 189 of the Companies Act 2013 ('the Act'). Accordingly paragraphs 3 (iii) (a) (b) and (c) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us the Company has complied with the provisions of Sections 185 and 186 of the Companies Act 2013 in respect of grant of loans making investments and providing guarantees and securities as applicable.

(v) In our opinion and according to the information and explanations given to us the Company has not accepted deposits as per the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. Accordingly paragraph 3 (v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for the maintenance of cost records under Section 148(1) of the Act for soda ash caustic soda lye sodium bicarbonate clinker cement and liquid bromine and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident fund Profession tax Income- tax Duty of customs Employees'State Insurance Goods and Service tax Cess and other material statutory dues have been regularly deposited during the year with the appropriate authorities.

According to the information and explanations given to us there are no dues in respect of Sales-tax Value added tax Duty of excise and Service tax payable by the Company.

According to the information and explanations given to us no undisputed amounts payable in respect of Provident fund Profession tax Income-tax Employees' State Insurance Duty of customs Goods and Service tax Cess and other material statutory dues were in arrears as at March 312020 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues of Income-tax Sales tax Service tax Duty of customs Duty of excise Goods and Service tax and Value added tax as at March 312020 which have not been deposited with the appropriate authorities on account of any dispute except as stated below:

Name of StatuteNature of DuesAmounts*Period to which the amount relatesForum where Dispute is pending
(Rs In crore)
1 Customs Act 1962Custom Duty23.532012-132015-16Tribunal (CESTAT)
0.351987-88 1992-93 2001-Appellate Authority upto
02 2011-12 2012-13Commissioner's level
2 Central Excise Act 1944Excise Duty50.312005-06High Court
45.962008-09 2014-15 2015-16Tribunal (CESTAT)
3 Central Sales Tax 1956 andSales Tax32.612006-10 2009-10 2012-High Court
Sales Tax Act of Various state(Central and13 2015-16
State) and Value Added Tax3.812004-06 2007-08 200910 2011-14 2016-17Tribunal (CESTAT)
12.031997 to 2017Appellate Authority upto Commissioner's level
4 The West Bengal tax on entry of Goods into Local Areas ActEntry Tax111.782012-13 to 2015-16High Court
2012
5 The Finance Act 1994 (Service Tax)Service Tax11.672010-112011-12Tribunal (CESTAT)
6 Income Tax Act 1961Income Tax10.87AY 2012-13Commissioner of Income Tax (Appeals)
8.22AY 2014-15Tribunal (ITAT)
94.56AY 2015-16Tribunal (ITAT)
15.55AY 2016-17Commissioner of Income Tax (Appeals)

* net of amounts paid under protest.

(viii) In our opinion and according to the information and explanations given to us the Company has not defaulted in repayment of loans or borrowings to banks and dues to debenture holders. The Company does not have any outstanding dues to financial institutions and Government.

(ix) According to the information and explanations given to us and based on our examination of the records of the Company the Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) and has not obtained any term loans during the year. Accordingly paragraph 3 (ix) of the Order is not applicable to the Company.

(x) According to the information and explanations given to us by the management we report that no material fraud by the Company or on the Company by its officers and employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and based on our examination of the records of the Company the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us the Company is not a Nidhi company. Accordingly paragraph 3 (xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Standalone Financial Statements as required by applicable Ind AS.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly paragraph 3 (xv) of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/ W-100022
Vijay Mathur
Partner
MumbaiMembership No: 046476
May 15 2020UDIN : 20046476AAAABR1367

Annexure B to the Independent Auditors' report on the Standalone Financial Statements of Tata Chemicals Limited for the year ended March 31 2020

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

(Referred to in paragraph 1(A) (f) under 'Report on Other Legal and Regulatory Requirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to Standalone Financial Statements of Tata Chemicals Limited (the Company) as of March 312020 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequate internal financial controls with reference to Standalone Financial Statements and such internal financial controls were operating effectively as at March 31 2020 based on the internal financial controls with reference to Standalone Financial Statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the Guidance Note).

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to Standalone Financial Statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to Company's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information as required under the Companies Act 2013 (hereinafter referred to as the Act).

Auditors' Responsibility

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

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to Standalone Financial Statements and their operating effectiveness. Our audit of internal financial controls with reference to Standalone Financial Statements included obtaining an understanding of such internal financial controls assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment including the assessment of the risks of material misstatement of the Standalone Financial Statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls with reference to Standalone Financial Statements.

Meaning of Internal Financial Controls with Reference to Standalone Financial Statements

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

Inherent Limitations of Internal Financial Controls with Reference to Standalone Financial Statements

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

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/ W-100022
Vijay Mathur
Partner
MumbaiMembership No: 046476
May 15 2020UDIN : 20046476AAAABR1367

   

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