SRF Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2020

1 The above results were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on June 4, 2020. The audit report of the Statutory Auditors is being filed with BSE and National Stock Exchange. For more details on the standalone results, visit Investors section of our website at www.srf.com and financial results at Corporates section of www.nseindia.com and www.bseindia.com.

2 These financial results of the Company have been prepared in accordance with the Indian Accounting Standards ("Ind AS") as prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and the other accounting principles generally accepted in India.

3 Engineering Plastics Business has been divested with effect from August 1, 2019. The business was reported under “Others segment” in accordance with the requirements of Ind AS 108 – "Operating Segments" in the financial statements till previous year. The relevant financial information of the said business has been disclosed under discontinued operations in terms of Ind AS 105- "Non-current assets held for sale and discontinued operations". The particulars of discontinued operations are as under:

(Rs. in Crores)

S.no. Particulars Quarter Ended Year Ended

31-Mar-20 31-Dec-19 31-Mar-19 31-Mar-20 31-Mar-19

I (a) Total income - - 58.01 75.13 253.94

(b) Total expenses - - 53.27 67.05 229.87

(c) Profit before tax for the period from discontinued operations {I(a)-I(b)} - - 4.74 8.08 24.07

(d) Tax expense related to discontinued operations - - 1.66 2.82 8.41

(e) Net Profit after tax for the period from discontinued operations {I(c)-I(d)} - - 3.08 5.26 15.66

II (a) Profit before tax on disposal of discontinued operations - - - 233.74 -

(b) Tax expense related to disposal of discontinued operations - - - 58.41 -

(c) Net Profit after tax on disposal of discontinued operations {II(a)-II(b)} - - - 175.33 -

III Net Profit after tax for the period from discontinued operations {I(e)+II(c)} - - 3.08 180.59 15.66



4 The Company has adopted Ind AS 116, w.e.f. April 1, 2019 by using the modified retrospective approach. Accordingly, the comparative information has not been restated. This has resulted in recognising a right-of-use assets of Rs. 205.65 Crores, including reclassification amounting to Rs. 135.77 Crores from non-current / current assets to right-of-use assets for prepaid lease rentals. Also a corresponding liability of Rs. 69.88 Crores has been recognised as at April 1, 2019.

In the statement of profit and loss for the current period, the nature of expenses in respect of operating leases has changed from lease rent in previous periods to depreciation cost for the right-of-use asset and finance cost for interest accrued on lease liability. There is no material impact on profit / (loss) after tax and earnings per share for the quarter and year ended March 31, 2020, on adoption of Ind AS 116.

5 7.33% Listed, Secured Redeemable Non-Convertible Debentures of Rs. 10 lakhs each aggregating to Rs. 300 Crores were allotted on June 30, 2017. These have been secured against first pari-passu charge over some of the moveable and immovable properties of the Company to the extent of asset cover of 2.50 times. These debentures have been rated as AA+ by CRISIL at the time of issue and there has been no change in the credit rating since then. The previous date for payment of interest was July 1, 2019 on which an interest amount of Rs. 21.99 Crores was paid. The next due date for payment of interest of Rs. 21.99 Crores for these debentures is June 30, 2020 and these debentures shall be due for redemption for an amount of Rs. 300 Crores on June 30, 2020.

6 The Company had Rs. 186.32 Crores of carried forward long term capital losses as per Income Tax Act, 1961, available for set off, on which no deferred tax asset was recognized till previous year. Pursuant to recognition of long term capital gain, a tax credit of Rs. 43.40 Crores has been recognised during the current year in respect of such losses in accordance with Ind AS 12 - "Income Taxes" under continuing operations.

7 Section 115BAA of the Income Tax Act, 1961 was introduced by the Taxation Laws (Amendment) Ordinance, 2019. Based on the current estimate of expected timing of exercising of the option under Section 115BAA, the Company has re-measured its deferred tax balances. Consequently, credit of Rs. 136.11 Crores (net of MAT adjustment) has been recorded in the Statement of Profit and Loss during the year.

8 In March 2020, the World Health Organization declared COVID-19 to be a pandemic. Consequent to this, Government of India declared a national lockdown on March 25, 2020, which has impacted the business activities of the Company. The Company has assessed the impact that may result from this pandemic on its liquidity position, carrying amounts of receivables, inventories, tangible and intangible assets, investments, and other assets / liabilities. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company has considered internal and external information available till the date of approval of these financial results and has assessed its situation.

In that context and based on the current estimates, the Company believes that COVID-19 is not likely to have any material impact on its financial statements, liquidity or ability to service its debt or other obligations. However, the overall economic environment, being uncertain due to COVID-19, may affect the underlying assumptions and estimates in future, which may differ from those considered as at the date of approval of these financial statements. The Company would closely monitor such developments in future economic conditions and consider their impact on the financial statements of the relevant periods.



9 The figures of the last quarters ended March 31, 2019 and March 31, 2020 are the balancing figures between the audited figures in respect of full financial year and published year to date figures upto third quarter of the relevant financial years. The figures upto the end of the third quarter had only been reviewed and not subject to audit.