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Tata Chemicals Ltd.

BSE: 500770 Sector: Industrials
NSE: TATACHEM ISIN Code: INE092A01019
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OPEN 1079.35
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VOLUME 36826
52-Week high 1194.00
52-Week low 773.90
P/E 28.28
Mkt Cap.(Rs cr) 26,996
Buy Price 1060.15
Buy Qty 44.00
Sell Price 1061.15
Sell Qty 100.00
OPEN 1079.35
CLOSE 1093.25
VOLUME 36826
52-Week high 1194.00
52-Week low 773.90
P/E 28.28
Mkt Cap.(Rs cr) 26,996
Buy Price 1060.15
Buy Qty 44.00
Sell Price 1061.15
Sell Qty 100.00

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 ChemicalsLimited (the "Company") which comprise the Standalone Balance Sheet as at March31 2022 and the Standalone Statement of Profit and Loss (including Other ComprehensiveIncome) Standalone Statement of Changes in Equity and Standalone Statement of Cash Flowsfor the year then ended and notes to the Standalone Financial Statements including asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "Standalone Financial Statements") .

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 March 31 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

Revenue recognition (refer notes 2.14 and 23 to the StandaloneFinancial Statements)

The Key Audit Matter How the matter was addressed in our audit
Revenue is recognized when the control over the underlying products has been transferred to the customer. Our audit procedures included:
• Assessing the Company's revenue recognition accounting policies for compliance with Ind AS;
Due to the Company's sales under various contractual terms and across locations delivery to customers in different regions might take different time periods and may result in undelivered goods at the period end. We consider there to be a risk of misstatement of the financial statements related to transactions occurring close to the year end as transactions could be recorded in the wrong financial period (cut-off risk). • Testing the design implementation and operating effectiveness of the Company's manual and automated (Information Technology - IT) controls on recording revenue. We also involved IT specialists for testing of IT general and application controls.
There is also a risk of revenue being fraudulently overstated through booking fictitious sales due to pressure on the Company to achieve performance targets. Accordingly revenue recognition is a key audit matter. • Testing the controls around the timely and accurate recording of sales transactions. We also tested the Company's lead time assessment and quantification of any sales reversals for undelivered goods. In addition we tested the terms and conditions set out in the sales contracts and the transit time required to deliver the goods;
• Performing testing on selected statistical samples of revenue transactions recorded throughout the year and at the year end and checking delivery documents and customer purchase orders (as applicable);
• Assessing high risk manual journals posted to revenue to identify any unusual items.
Impairment evaluation of Investments in unlisted subsidiaries (refer notes 2.3.5 2.12 and 8(a)(i) and 8(a)(ii) to the Standalone Financial Statements)
The Key Audit Matter How the matter was addressed in our audit
The carrying amount of the investments in unlisted subsidiaries (held at cost less impairment) represents 25% of the Company's total assets. Our audit procedures included:
The investments are assessed for impairment when indicators of impairment exists. • Assessing the indicators for impairment of the unlisted subsidiaries and understanding the Company's assessment of those indicators;
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. The discounted cash flow models use several key assumptions including estimates of terminal value growth rates and the weighted-average cost of capital (discount rate). • Evaluating design and implementation and testing operating effectiveness of controls over the Company's process of impairment assessment and approval of forecasts;
In view of the significance of these investments and estimates and judgments involved we consider impairment evaluation of investments in unlisted subsidiaries to be a key audit matter. • Assessing the valuation methods and testing the arithmetical accuracy of the impairment models used for determining recoverable amount financial position of the unlisted subsidiaries and assessing historical financial performance of those subsidiaries;
• Understanding the basis and assumptions used for the financial forecasts ;
• Testing the key assumptions associated with significant estimation uncertainty and subjectivity used in the discounted cash flow forecast analysis by comparing these inputs with externally derived data and based on our knowledge of the Company and the markets in which the unlisted subsidiaries operate. We challenged these assumptions including applying sensitivity analysis with the assistance of valuation specialists;
• Comparing the carrying amount of investments with recoverable amount based on discounted cash flow analysis.
Litigations and claims (refer notes 2.3.4 2.22 18 and 41.1 to the Standalone Financial Statements)
The Key Audit Matter How 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:
Resolution of litigations and claims proceedings may span over multiple years beyond March 31 2022 due to the complexity and magnitude of the legal matters involved and may involve protracted negotiation or litigation. • 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;
The determination of a provision or contingent liability requires significant judgement by the Company because of the inherent complexity in estimating whether it is probable that there will be an outflow of economic resources. The amount recognized as a provision is the best estimate of the probable expenditure. The provisions and contingent liabilities are subject to changes due to the outcomes of litigations and claims over time as new facts emerge as each legal case progresses. • 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;
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. • Testing completeness of litigations and claims recorded by verifying the Company's legal expenses and the minutes of the board meetings;
• 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 discussing with the Company's internal legal counsel;
• Evaluating the Company's internal control and judgements made 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.
Impairment evaluation of Property Plant and Equipment (referred to as 'PPE') and goodwill (refer notes 2.3.5 and 2.12 and 4 to the Standalone Financial Statements)
The Key Audit Matter How the matter was addressed in our audit
The Company periodically assesses if there are any triggers for recognising impairment loss in respect of Property plant and equipment relating to its Cement Silica and Nutraceutical Cash Generating Units (CGU). Our audit procedures included:
In making this determination the Company considers both internal and external sources of information to determine whether there is an indicator of impairment and accordingly whether the recoverable amount of the CGU needs to be estimated. Further Goodwill is required to be assessed for impairment annually. An impairment loss is recognised if the recoverable amount is lower than the carrying value. The recoverable amount is determined based on the higher of value in use (VIU) and fair value less costs to sell (FVLCS). • Analysing the indicators of impairment of PPE including understanding of Company's own assessment of those indicators;
As at March 31 2022 carrying Value of PPE of these CGUs was Rs 543.19 crore and Rs 45.53 crore for Goodwill. • Evaluating the design and implementation and testing the operating effectiveness of key controls over the impairment assessment process. This included the estimation and approval of forecasts determination of key assumptions and valuation models;
The assessment of indicators of impairment and recoverable value is considered to be a key audit matter due to the significant judgment required to assess the internal and external sources of information. The judgement in particular is with respect to estimation of future discounted Cash Flows (DCF) of the underlying CGUs due to the inherent uncertainty and subjectivity involved in forecasting and discounting future Cash Flows. The DCF uses several key assumptions including estimates of future sales prices EBIDTA terminal value growth rates and the weighted-average cost of capital (discount rate). • Assessing the valuation methodology used for determining recoverable amount and testing the arithmetical accuracy of the impairment models with the assistance of valuations specialists;
• Assessing the identification of relevant Cash Generating Units (CGU) to which goodwill is allocated and to which PPE belong that are being tested;
• Understanding from the Company the basis of the assumptions used for the projected future Cash Flows;
• Verifying the inputs used in projecting future Cash Flows. We challenged the business assumptions used such as sales growth EBIDTA and discount rate which included comparing these inputs with externally derived data as well as our own assessment based on our knowledge of the client and the industry. In addition we performed sensitivity analysis with the assistance of valuations specialists;
• Evaluating the past performance of the CGUs with actual performance where relevant and assessing historical accuracy of the forecast produced by the Company;
• Assessing the adequacy of the Company's disclosures of key assumptions judgments and sensitivities in respect of Goodwill impairment.

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

The Company's Management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany's annual report but does not include the Standalone Financial Statements andour auditor's report thereon.

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

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

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

The Company's Management and Board of Directors are responsiblefor the matters stated in Section 134(5) of the Act with respect to the preparation ofthese Standalone Financial Statements that give a true and fair view of the state ofaffairs

181 profit/loss and Other Comprehensive Income Changes in Equityand Cash Flows of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified underSection 133 of the Act. 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 design implementation and maintenance ofadequate 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.

In preparing the Standalone Financial Statements the Management andBoard of Directors are responsible for assessing the Company's ability to continue asa going 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 theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

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

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 the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls with reference to financial statements inplace 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 conditionsmay cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether 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 de_ciencies 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 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.

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 March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 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 controlswith reference to financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in theAuditor's Report in accordance with Rule_ 11 of the Companies (Audit andAuditor's) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us:

a) The Company has disclosed the impact of pending litigations as atMarch 31 2022 on its financial position in its Standalone Financial Statements - ReferNote 19 and 41.1 to the Standalone Financial Statements.

b) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

c) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company except for Rs0.62 crore due to legal disputes with regard to ownership that have remained unresolved.

d) (i) The management has represented that to the best of itsknowledge and belief as disclosed in note 42(b) to the accounts no funds have beenadvanced or loaned or invested (either from borrowed funds or share premium or any othersources or kind of funds) by the Company to or in any other persons or entities includingforeign entities ("Intermediaries") with the understanding whether recorded inwriting or otherwise that the Intermediary shall: directly or indirectly lend or investin other persons or entities identified in any manner whatsoever ("UltimateBeneficiaries") by or on behalf of the Company or provide any guarantee security orthe like to or on behalf of the Ultimate Beneficiaries.

(ii) The management has represented that to the best of its knowledgeand belief as disclosed in note 42(b) to the accounts no funds have been received by theCompany from any persons or entities including foreign entities ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall: directly or indirectly lend or invest in other persons or entitiesidentified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalfof the Funding Party or provide any guarantee security or the like from or on behalf ofthe Ultimate Beneficiaries.

(iii) Based on such audit procedures as considered reasonable andappropriate in the circumstances nothing has come to our 183 notice that hascaused us to believe that the representations under sub-clause (d) (i) and (d) (ii)contain any material misstatement.

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'sReport under Section 197(16) of the Act: In our opinion and according to the informationand explanations given to us the remuneration paid by the Company to its directors duringthe 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 thelimit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has notprescribed other details under Section 197(16) of the Act which are required to becommented upon by us.

Annexure A to the Independent Auditors' Report

With reference to the Annexure A referred to in the IndependentAuditors' Report to the members of the Company on the Standalone Financial Statementsfor the year ended March 31 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 Right-of-Use Assets and investment properties.

a) (B) The Company has maintained proper records showing fullparticulars of intangible assets.

b) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the Company has a regularprogramme of physical verification of its Property Plant and Equipment and investmentproperties by which all property plant and equipment and investment properties areverified in a phased manner over a period of three years. In accordance with thisprogramme certain property plant and equipment and investment properties were verifiedduring the year. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets. We are informedthat the discrepancies were not material and have been properly dealt with in the books ofaccount.

c) According to the information and explanations given to us and on thebasis 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

Description of property Gross carrying value Held in the name of Whether promoter director or their relative or employee Period held- indicate range where appropriate Reason for not being held in the name of the company Also indicate if in dispute
Freehold land in Mambattu Rs 15.05 crore Andhra Pradesh Industrial Infrastructure No Since 2019 The Company is in the process of signing necessary documents
Nellore Freehold land in Poshitra * Corporation Government of Gujarat No Since 1970 It is under litigation since 2019
Leasehold land at Nanded Rs 2.03 Crore Maharashtra Industrial Development Corporation No Since Dec 2008 Lease deed is not executed

*net of amount paid under protest / refund adjusted by tax authorities

* value below Rs 50000/-

d) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the Company has not revalued itsProperty Plant and Equipment (including Right-of-Use assets) or intangible assets or bothduring 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 inventory except goods-in-transit and stocks lying withthird parties has been physically verified by the management during the year. For stockslying with third parties at the year-end written confirmations have been obtained and forinward goods-in-transit subsequent evidence of receipts has been linked with inventoryrecords to the extent of goods received. In our opinion the frequency of suchverification is reasonable and procedures and coverage as followed by management wereappropriate. No discrepancies were noticed on verification between the physical stocks andthe book records that were more than 10% in the aggregate of each class of inventory.

b) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the Company has been sanctionedworking capital limits in excess of five crore rupees in 185 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 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 granted loans and provided guarantees to companies and otherparties in respect of which the requisite information is provided in clause (a) to (f ) asbelow to the extent applicable. The Company has not made any investments in or providedany guarantee or security to firms or limited liability 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 as below:

(INR in Crore)

Particulars Guarantees Loans
Aggregate amount during the year
- Subsidiaries* 143.12 --
- Other parties (employees) -- 4.17
Balance outstanding as at balance sheet date
- Subsidiaries* 1452.67 --
- Other parties (employees) -- 0.53

*As per Companies Act 2013

b) According to the information and explanations given to us and basedon the audit procedures carried out by us in our opinion the investments made andguarantees provided during the year and the terms and conditions of the grant of loans andguarantees provided during the year are prima facie not prejudicial to the interest ofthe Company.

c) According to the information and explanations given to us and on thebasis of our examination of the records of the Company in the case of loans given in ouropinion the repayment of principal and payment of interest has been stipulated and therepayments or receipts have been regular. Further the Company has not given any advancesin the nature of loans to any party during the year.

d) According to the information and explanations given to us and on thebasis 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 on thebasis of our examination of the records of the Company there is no loan or advance in thenature of loan granted falling due during the year which has been renewed or extended orfresh loans granted to settle the overdues of existing loans given to same parties.

f ) 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 grantedany loans or advances in the nature of loans either repayable on demand or withoutspecifying any terms or period of repayment.

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

(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 the Companypursuant to the rules prescribed by the Central Government for maintenance of cost recordsunder Section 148(1) of the Companies Act 2013 in respect of its manufactured goods andare of the opinion that prima facie the prescribed accounts and records have been madeand maintained. However we have not carried out a detailed examination of the recordswith a view to determine whether these are accurate or complete.

(vii) a) The Company does not have liability in respect of Service taxDuty of excise Sales tax and Value added tax during the year since effective July 1 2017these statutory dues has been subsumed into GST.

According to the information and explanations given to us and on thebasis of our examination of the records of the Company amounts deducted / accrued in thebooks of account in respect of undisputed statutory dues including Goods and Services Tax(‘GST') Provident fund Employees' State Insurance Income-Tax Duty ofCustoms Cess and other statutory dues have been regularly deposited by the Company withthe appropriate authorities.

According to the information and explanations given to us noundisputed amounts payable in respect of GST Provident fund Employees' StateInsurance Income-Tax Duty of Customs Cess and other statutory dues were in arrears asat March 31 2022 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us statutorydues relating to Goods and Service Tax Provident Fund Employees State InsuranceIncome-Tax Duty of Customs or Cess or other statutory dues which have not been depositedon account of any dispute are as follows:

Name of Statute Nature of Dues Amount (Rs in crore)* Period to which it relates Forum where dispute is pending
The Income Tax Act 1961 Income Tax 81.91 AY 2015-16 Tribunal (ITAT)
27.72 AY 2016-17 Commissioner of Income Tax (Appeals)
5.80 AY 2017-18 Tribunal (ITAT)
Customs Act 1962 Custom Duty 25.94 2012-13 2015-16 2017-18 Tribunal (CESTAT)
1.14 1987-88 1992-93 2001-02 2011-12 2014-17 Appellate Authority upto Commissioner's level
The Central Excise Act 1944 Excise Duty 49.93 2005-06 High Court of India
64.83 2008-09 2010-12 2014-18 Appellate Authority upto Commissioner's level
556.70 1999-2005 Supreme Court of India
The Central Sales Tax 1956 and Sales Tax Act of various states Sales Tax (Central and State) and Value Added Tax 32.61 2006-10 2012-13 2015-16 High Court of India
2.51 2004-06 2011-14 2016-17 Tribunal (CESTAT)
7.82 1997-2000 2003-06 2009-18 Appellate Authority upto Commissioner's level
50.48 2009-10 Supreme Court of India
The West Bengal tax on entry of Goods into Local Areas Act 2012 Entry Tax 127.45 2012-13 to 2015-16 High Court of India
The Finance Act 1994 (Service Tax) Service Tax 11.67 2010-112011-12 Tribunal (CESTAT)
Goods and Services Tax Act 2017 GST 0.65 2017-18 Appellate Authority upto Commissioner's level
Gujarat Green Cess Act 2011 Green Cess 9.18 2012-13 to 2021-22 Supreme Court of India
The Environment (Protection) Act 1986 Afforestation charges 13.25 2006-07 High Court of India
Gujarat Land Revenue Act 2017 Land revenue 0.67 2013-14 to 2017-18 Mamlatdar Kacheri Mithapur Gujarat

*net of amount paid under protest / refund adjusted by tax authorities

(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 during the year.

b) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the Company has not been declareda willful defaulter by any bank or financial institution or government or governmentauthority.

c) In our opinion and according to the information and explanationsgiven to us by the management the Company has not obtained any term loans during theyear. Accordingly clause 3(ix)(c) of the Order is not applicable.

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 not taken any funds from any entity or person on account of or to meet theobligations of its subsidiaries associates or joint ventures as defined under CompaniesAct 2013.

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 joint ventures or associatecompanies (as defined under Companies Act 2013).

(x) a) The Company has not raised any moneys by way of initial publicoffer or further public offer (including debt instruments). Accordingly clause 3(x)(a) ofthe Order is not applicable. b) According to the information and explanations given to usand on the basis of our examination of the records of the Company the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year. Accordingly clause 3(x)(b) of the Order is notapplicable.

(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 no reportunder sub-section (12) of Section 143 of the Companies Act 2013 has been filed by theauditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors)Rules 2014 with the Central Government.

c) We have taken into consideration the whistle blower complaintsreceived by the Company during the year while determining the nature timing and extent ofour audit procedures.

(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 Section 177 and188 of the Companies Act 2013 where applicable and the details of the related partytransactions have been disclosed in the Standalone Financial Statements as required by theapplicable Indian accounting standards.

(xiv) a) Based on the information and explanations provided to us andour audit procedures in our opinion the Company has an internal audit systemcommensurate with 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 informationand explanations given to us the Company has not entered into any non-cash transactionswith its directors or persons connected to its directors and hence provisions of Section192 of the Companies Act 2013 are not 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 and the Company is not a Core InvestmentCompany (CIC) as defined in the regulations made by the Reserve Bank of India.Accordingly clauses 3(xvi)(a) 3(xvi)(b) and 3(xvi)(c) of the Order are not applicable.

b) According to the information and explanations provided to us theGroup (as per the provisions of the Core Investment Companies (Reserve Bank) Directions2016) has more than one CIC as part of the Group. The Group has six CICs as part of theGroup.

(xvii) The Company has not incurred cash losses in the current and inthe 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 financialstatements our knowledge of the Board of Directors and management plans and based on ourexamination of the evidence supporting the assumptions nothing has come to our attentionwhich causes us to believe that any material uncertainty exists as on the date of theaudit report that the Company is not capable of meeting its liabilities existing at thedate of balance sheet as and when they fall due within a period of one year from thebalance sheet date. We however state that this is not an assurance as to the futureviability of the Company. We further state that our reporting is based on the facts up tothe date of the audit report and we neither give any guarantee nor any assurance that allliabilities falling due within a period of one year from the balance sheet date will getdischarged by the Company as and when they fall due.

(xx) a) In our opinion and according to the information andexplanations given to us there is no unspent amount under sub-section (5) of section 135of the Companies Act 2013 pursuant to any project other than ongoing projects.Accordingly clause 3(xx)(a) of the Order is not applicable.

b) 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 theCompanies Act 2013 pursuant to any ongoing project. Accordingly clause 3(xx)(b) of theOrder is not applicable.

Annexure B to the Independent Auditors' report on the StandaloneFinancial Statements of Tata Chemicals Limited for the year ended March 31 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 toStandalone Financial Statements of Tata Chemicals Limited ("the Company") as ofMarch 31 2022 in conjunction with our audit of the Standalone Financial Statements of theCompany for the year ended on that date.

In our opinion the Company has in all material respects adequateinternal financial controls with reference to Standalone Financial Statements and suchinternal financial controls were operating effectively as at March 31 2022 based on theinternal financial controls with reference to Standalone Financial Statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued 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 areresponsible for establishing and maintaining internal financial controls based on theinternal financial controls with reference to Standalone Financial Statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation 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'sinternal financial controls with reference to Standalone Financial Statements based on ouraudit. We conducted our audit in accordance with the Guidance Note and the Standards onAuditing prescribed under Section 143(10) of the Act to the extent applicable to anaudit of internal financial controls with reference to Standalone Financial Statements.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to Standalone Financial Statements were established andmaintained and whether such controls operated effectively in all material respects. Ouraudit involves performing procedures to obtain audit evidence about the adequacy of theinternal financial controls with reference to Standalone Financial Statements and theiroperating effectiveness. Our audit of internal financial controls with reference toStandalone Financial Statements included obtaining an understanding of such internalfinancial controls 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 judgment includingthe assessment of the risks of material misstatement of the Standalone FinancialStatements whether due to fraud 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 internalfinancial controls with reference to Standalone Financial Statements.

Meaning of Internal Financial controls with Reference to StandaloneFinancial Statements

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

Inherent Limitations of Internal Financial controls with Reference toStandalone Financial Statements

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

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Vijay Mathur
Partner
Mumbai Membership No: 046476
April 29 2022 UDIN: 22046476AIAYFT9792

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