1. We have audited the accompanying standalone financial
statements of Indo Rama Synthetics (India) Limited ('the
Company'), which comprise the Balance Sheet as at March
31 2025, the Statement of Profit and Loss (including Other
Comprehensive Income), the Statement of Cash Flow
and the Statement of Changes in Equity for the year then
ended, and notes to the standalone financial statements,
including material accounting policy information and other
explanatory information.
2. 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 ('the Act') in the manner so required
and give a true and fair view in conformity with the Indian
Accounting Standards ('Ind AS') specified under section
133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015 and other accounting principles
generally accepted in India, of the state of affairs of the
Company as at March 31 2025, and its profit (including other
comprehensive income), its cash flows and the changes in
equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards
on Auditing specified under section 143(10) of the Act.
Our responsibilities under those standards 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 ('ICAI') 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.
Key Audit Matter
4. 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.
5. We have determined the matters described below to be the key audit matters to be communicated in our report.
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Key audit matter
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How our audit addressed the key audit matter
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Recoverability of deferred tax assets (refer note 47 to the accompanying
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Our audit procedures in relation to the recoverability of deferred tax
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standalone financial statements)
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assets included, but were not limited to, the following:
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As detailed in note 47 to the accompanying standalone financial
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•
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Evaluated the design and tested the operating effectiveness of
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statements, the Company has deferred tax assets (net) aggregating to
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key controls implemented by the Company over recognition and
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H 258.61 crores as at March 31 2025.
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recoverability of deferred tax assets based on the assessment of
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The Company's ability to recover the deferred tax assets is assessed by
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Company's ability to generate sufficient taxable profits in foreseeable
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the management at the close of each reporting period which depends on
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future allowing the use of deferred tax assets within the time
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the forecasts of the future results and taxable profits that Company expects
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prescribed by income tax laws.
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to earn within the period by which such brought forward losses and
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•
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Reconciled the future taxable profit projections to future business
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unabsorbed depreciation can be adjusted against the taxable profits
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plans of the Company as approved by the management.
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as governed by the Income-tax Act, 1961.
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•
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Tested the assumptions used in the aforesaid future projections such
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The projected cash flows involve key assumptions such as future growth
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as growth rates, expected saving, increased utilization of plants,
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rate and market conditions. Any change in these assumptions could have
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etc. considering our understanding of the business, actual historical
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a material impact on the carrying value of deferred tax assets. These
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results, other relevant existing conditions, external data and market
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assumptions and estimates are judgmental, subjective and depend on the
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conditions.
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future market and economic conditions, including industry focused trade
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•
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Tested the arithmetical accuracy of the calculations including those
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policies, materialisation of the Company's expansion plans.
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related to sensitivity analysis performed by the management.
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We have identified the recoverability of deferred tax assets recognized
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Performed independent sensitivity analysis to test the impact of
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on carried forward tax losses and unabsorbed depreciation as a key
audit matter for the current year audit considering the materiality of the
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possible variations in key assumptions.
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amounts, complexities and significant judgments involved, as described
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•
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Reviewed the historical accuracy of the cash flow projections
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above.
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prepared by the management in prior periods.
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In addition to the above, the corresponding disclosures made in the
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Evaluated management's assessment of time period available
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accompanying standalone financial statements with respect to above
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for adjustment of such deferred tax assets as per provisions of
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matter have also been considered as fundamental to user's understanding
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the Income-tax Act, 1961 and appropriateness of the accounting
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of such financial statements.
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treatment with respect to the recognition of deferred tax assets as
per requirements of Ind AS 12, Income Taxes.
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•
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Evaluated the appropriateness and adequacy of the disclosures made
in the standalone financial statements in respect of deferred tax
assets in accordance with applicable accounting standards.
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Key audit matter
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How our audit addressed the key audit matter
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Provisions and contingent liabilities relating to litigations (refer note 20
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Our audit procedures in relation to the assessment of litigations and
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and note 35 to the accompanying standalone financial statements)
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provisions included, but were not limited to, the following:
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As detailed in note 20 and note 35 to the standalone financial statements,
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• Obtained an understanding of the management process for:
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the Company is exposed to a large number of litigations including matters
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- identification of legal and tax matters initiated against the
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pertaining to income tax and prior years' matters pertaining to excise,
service tax, customs, goods and service tax, etc., which could have a
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Company,
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significant impact on the financial position of the Company, if the potential
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- assessment of accounting treatment for each such litigation
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exposures were to materialise.
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identified under Ind AS 37 accounting principles, and
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Provision for such litigations amounts to H 27.41 crores as at March 31
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- measurement of amounts involved
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2025 based on its estimate of the likelihood of such liability devolving upon
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• Evaluated the design and tested the operating effectiveness of key
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the Company.
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controls around above process including for completeness and
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The amounts involved are material and the application of accounting
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accuracy of the list of litigations outstanding against the Company.
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principles as given under Ind AS 37, 'Provisions, Contingent Liabilities and
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• Obtained understanding of the developments during the year in
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Contingent Assets', in order to determine the amount to be recognised as a
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each existing litigation, and understanding of the new litigations
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liability or to be disclosed as a contingent liability, in each case, is inherently
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initiated against the Company during the year by inquiry with the
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subjective, and needs careful evaluation and judgement to be applied by
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management, inspection of case related documents such as notices,
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the management.
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orders, etc. and correspondence of the Company with their external
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The key judgements involved are with respect to the potential exposure of
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counsels handling such matters on behalf of the Company.
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each litigation and the likelihood and/or timing of cash outflows from the
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• Conducted a critical review of the assessment done by the
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Company, requires interpretation of laws and past legal rulings.
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management with the help of its experts for the likelihood and
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Considering the significant judgments, materiality of the amounts involved,
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potential impact of each litigation, examining the available supporting
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inherent high estimation uncertainty and reliance on experts, this matter
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documents. Tested the independence, objectivity and competence of
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has been identified as a key audit matter for the current year audit.
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such experts involved.
• Exercised our professional judgment to assess the management's
assessment of the potential likelihood of liability devolving upon the
Company with respect to each legal case.
• Involved auditor's experts to assess the Company's interpretation
and application of relevant tax laws to evaluate the appropriateness
of key assumptions used and the reasonableness of estimates
made in relation to uncertain tax positions, taking into account past
precedents.
• Reviewed significant movements in provision with supporting
documents.
• Tested the underlying calculations of amount of liability recognised
and contingent liability disclosed in the standalone financial
statements.
• Evaluated the appropriateness and adequacy of disclosures made
in the standalone financial statements with respect to provisions
and contingent liability in accordance with applicable accounting
standards.
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information other than the Financial Statements and
Auditor's Report thereon
6. The Company's Board of Directors are responsible for the
other information. The other information comprises the
information included in the Annual Report, but does not
include the standalone financial statements and our auditor's
report thereon. The Annual Report is expected to be made
available to us after the date of this auditor's report.
Our opinion on the standalone financial statements does not
cover the other information and we will 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
identified above when it becomes available 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.
When we read the Annual Report, if we conclude that there
is a material misstatement therein, we are required to
communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with
Governance for the Standalone Financial Statements
7. The accompanying standalone financial statements have
been approved by the Company's Board of Directors. The
Company's Board of Directors are responsible for the
matters stated in section 134(5) of the Act with respect
to the preparation and presentation of these standalone
financial statements that give a true and fair view of the
financial position, financial performance including other
comprehensive income, changes in equity and cash flows
of the Company in accordance with the Ind AS specified
under section 133 of the Act and other accounting principles
generally accepted in India. 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 financial statements
that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
8. In preparing the standalone financial statements, the Board
of Directors is 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 the Board of Directors either
intends to liquidate the Company or to cease operations, or
has no realistic alternative but to do so.
9. 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
10. 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 Standards on Auditing 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 financial statements.
11. As part of an audit in accordance with Standards on Auditing,
specified under section 143(10) of the Act we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of
the 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 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 made by management;
• Conclude on the appropriateness of 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
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; and
• Evaluate the overall presentation, structure and content
of the financial statements, including the disclosures,
and whether the financial statements represent the
underlying transactions and events in a manner that
achieves fair presentation.
12. 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.
13. 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.
14. 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 auditor's
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
15. As required by section 197(16) of the Act based on our audit,
we report that the Company has paid remuneration to its
directors during the year in accordance with the provisions
of and limits laid down under section 197 read with Schedule
V to the Act.
16. 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 matters specified in paragraphs 3 and 4
of the Order, to the extent applicable.
17. Further to our comments in Annexure A, as required by
section 143(3) of the Act based on our audit, we report, to
the extent applicable, 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 purpose of our audit of
the accompanying standalone financial statements;
b) Except for the matters stated in paragraph 17(h)(vi)
below on reporting under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014 (as amended), 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 financial statements dealt with by this
report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone financial
statements comply with Ind AS specified under section
133 of the Act;
e) On the basis of the written representations received
from the directors and taken on record by the Board
of Directors, none of the directors is disqualified as on
March 31 2025 from being appointed as a director in
terms of section 164(2) of the Act;
f) The modification relating to the maintenance of
accounts and other matters connected therewith are
as stated in paragraph 17(b) above on reporting under
section 143(3)(b) of the Act and paragraph 17(h)(vi)
below on reporting under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014 (as amended);
g) With respect to the adequacy of the internal financial
controls with reference to financial statements of
the Company as on March 31 2025 and the operating
effectiveness of such controls, refer to our separate
report in Annexure B wherein we have expressed an
unmodified opinion; and
h) With respect to the other matters to be included
in the Auditor's Report in accordance with rule 11
of the Companies (Audit and Auditors) Rules, 2014
(as amended), in our opinion and to the best of our
information and according to the explanations given
to us:
i. The Company, as detailed in note 35 to the
standalone financial statements, has disclosed
the impact of pending litigations on its financial
position as at March 31 2025.
ii. The Company did not have any long-term
contracts including derivative contracts for which
there were any material foreseeable losses as at
March 31 2025.;
iii. There were no amounts which were required
to be transferred to the Investor Education and
Protection Fund by the Company during the year
ended 31 March 2025;
iv. (a) The management has represented that, to the best of
its knowledge and belief, as disclosed in note 51(e) to
the standalone financial statements, no funds have
been advanced or loaned or invested (either from
borrowed funds or securities premium or any other
sources or kind of funds) by the Company to or in any
person(s) or entity(ies), including foreign entities ('the
intermediaries'), with the understanding, whether
recorded in writing or otherwise, that the intermediary
shall, whether, directly or indirectly lend or invest in
other persons or entities identified in any manner
whatsoever by or on behalf of the Company ('the
Ultimate Beneficiaries') or provide any guarantee,
security or the like on behalf the Ultimate Beneficiaries;
(b) The management has represented that, to the best of
its knowledge and belief, as disclosed in note 51(f) to
the standalone financial statements, no funds have
been received by the Company from any person(s)
or entity(ies), including foreign entities ('the Funding
Parties'), with the understanding, whether recorded in
writing or otherwise, that the Company shall, whether
directly or indirectly, lend or invest in other persons or
entities identified in any manner whatsoever by or on
behalf of the Funding Party ('Ultimate Beneficiaries') or
provide any guarantee, security or the like on behalf of
the Ultimate Beneficiaries; and
(c) Based on such audit procedures performed as
considered reasonable and appropriate in the
circumstances, nothing has come to our notice
that has caused us to believe that the management
representations under sub-clauses (a) and (b) above
contain any material misstatement.
v. The Company has not declared or paid any dividend during
the year ended March 31 2025.
vi. Based on our examination which included test checks, the
Company, in respect of financial year commencing on April
01 2024, has used accounting software for maintaining its
books of account which has a feature of recording audit trail
(edit log) facility and the same has operated throughout the
year for all relevant transactions recorded in the software
except that, audit trail feature was not enabled at database
level for accounting software to log any direct data changes,
as described in note 52 to the financial statements. Further,
during the course of our audit we did not come across any
instance of audit trail feature being tampered with and the
audit trail has been preserved by the Company as per the
statutory requirements for record retention other than the
consequential impact of the exception given above.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Kartik Gogia
Partner
Membership No.: 512371
UDIN: 25512371BMNUDD9131
Place: Gurugram
Date: May 13 2025
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