1. We have audited the accompanying standalone financial
statements of Thirumalai Chemicals Limited (‘the
Company'), which comprise the Standalone Balance
Sheet as at 31 March 2025, the Standalone Statement
of Profit and Loss (including Other Comprehensive
Income), the Standalone Statement of Cash Flow and
the Standalone 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 31 March
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 (‘ICAO 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 Matters
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.
Impairment assessment of property, plant and equipment on Company’s D1 Dahej Plant:
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Key audit matter
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How the matter was addressed in the audit
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Refer note 2.7 and 3 to the accompanying standalone
financial statements for the material accounting policy
information on impairment of non-financial assets and
relevant details of impairment assessment.
As at 31 March 2025, the Company is carrying Property,
Plant and Equipment at D1 Dahej Plant aggregating to
' 9,068 Lakhs in the standalone financial statements of
the Company, which is considered to be a separate cash
generating unit (CGU) as included in aforesaid note.
Considering the increased downtime and non-operational
hours coupled with reduced margins recorded by the D1
Dahej Plant , the management has identified that indicators
exist that requires the management to test the carrying
value of related CGU for possible impairment in accordance
with the requirements of Ind AS 36, Impairment of Assets
(‘Ind AS 36').
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Our audit procedures included, but were not limited to, the
following:
a) Obtained an understanding of the management's process
and evaluated design and tested operating effectiveness
of key controls;
b) Evaluated the appropriateness of Company's accounting
policy in respect of impairment assessment and the
methods used to determine the recoverable amount of
CGU in accordance with the requirements of Ind AS 36;
c) Assessed the professional competence, objectivity and
capabilities of the valuation expert used by the management
for performing required value-in-use calculations to
estimate the recoverable amount of the CGU;
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Key audit matter
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How the matter was addressed in the audit
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The management's assessment of the recoverable amount
requires estimation and judgement around identification and
assumptions used in the determination of value-in use (VIU).
The principal driver of recoverable amount is the estimated
growth in the operations of the CGU and ability to generate
cash profits in the future. The key assumptions supporting
management's assessment of the recoverable amount of
CGU are the estimated future financial performance, capital
expenditure and the discount rates applied etc. Changes to
assumptions could lead to material changes in estimated
recoverable amounts, resulting in impairment of the CGU.
Based on the aforesaid assessment, the Company has not
recorded impairment expenses on the aforesaid Property,
Plant and Equipment during the year ended 31 March 2025
as the recoverable amount of the CGU is higher than its
carrying amount.
Considering the significance of the amounts involved,
and auditor attention required to test the appropriateness
of accounting estimate that involves high estimation
uncertainty and significant management judgement, this
matter has been determined to be a key audit matter for the
current year audit.
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d) Involved auditor's valuation expert to assess the
appropriateness of the value-in-use calculations used
by the management and to test reasonability of the
assumptions used therein relating to discount rates, risk
premium, industry growth rates etc.;
e) Evaluated the key assumptions applied in the value in-use
calculation, including the revenue growth rate, utilisation
rate of the plant and machinery and other key cost
elements, by comparing to the current utilisation rate and
historical performance of those plant and machinery;
f) Tested the arithmetical accuracy of the calculations
performed by the management's expert;
g) Assessed the sensitivity of the outcome of impairment
assessment to changes in key assumptions such as
discount rates; and
h) Assessed the appropriateness and adequacy of
disclosures made by the management in the standalone
financial statements in accordance with the requirements
of the applicable accounting standards.
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Revenue recognition - Sale of manufactured goods
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Key audit matter
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How the matter was addressed in the audit
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Refer Note 2.5 and Note 22 to the accompanying standalone
financial statements for the material accounting policy
information on revenue recognition and relevant details of
revenue recognised during the year.
Revenue of the Company consists primarily of sale of
manufactured products to the customers. The Company
recognises the revenue in accordance with the principles
of Ind AS 115, Revenue from Contracts with Customers (Ind
AS 115), at point in time when the Company satisfies its
performance obligation by transferring the control of goods
to its customers and there is no unfulfilled obligation. The
revenue is measured based on the transaction price specified
in the contract, net of discounts and goods and services tax.
The Company also focuses on revenue as a key performance
measure, which could create an incentive for overstating
revenue and thus, the timing of revenue recognition is critical
as there is a risk of revenue being recognised before the
control is transferred to the customers.
Owing to the above and volume of transactions, revenue is
determined to be an area involving significant risk and hence,
requires significant auditor attention.
Considering the volume of transactions, materiality of the
amount involved as mentioned above, revenue recognition
has been identified as a key audit matter for the current year
audit.
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Our audit procedures included, but were not limited to, the
following:
a) Obtained an understanding of the business process and
assessed the appropriateness of the Company's revenue
recognition accounting policy in accordance with Ind AS 115;
b) Evaluated the design and tested the operating effectiveness
of key controls in respect of revenue recognition;
c) Performed substantive testing by selecting samples of
revenue transactions recorded during the year including
specific periods before and after the financial year end
by verifying the underlying supporting documents, which
included sales invoices, contracts and shipping documents
to ensure that the correct amount of revenue is recorded in
the correct period;
d) Scrutinised for any unusual non-standard journal entries
based on certain criteria which impacts revenue recognized
during the year;
e) Tested the credits made to revenue account subsequent to
the period end; and
f) Assessed the appropriateness and adequacy of disclosures
made by the management in the standalone financial
statements in accordance with the requirements of the
applicable accounting standards.
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Information other than the Standalone 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
standalone 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 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 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
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; and
• 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.
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 31 March 2025 from being appointed as a
director in terms of section 164(2) of the Act;
f) The qualification relating to the maintenance of
accounts and other matters connected therewith
are as stated in 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 31 March 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 33 to the
standalone financial statements, has disclosed
the impact of pending litigations on its financial
position as at 31 March 2025;
ii. the Company did not have any long-term
contracts including derivative contracts for
which there were any material foreseeable
losses as at 31 March 2025;
iii. There has been no delay in transferring
amounts, 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,
other than as disclosed in note 4 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 persons or entities, 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,
other than as disclosed in note 4 to the
standalone financial statements, no funds
have been received by the Company
from any persons or entities, 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 final dividend paid by the Company during
the year ended 31 March 2025 in respect of
such dividend declared for the previous year
is in accordance with section 123 of the Act to
the extent it applies to payment of dividend.
vi. As stated in Note 38 to the standalone financial
statements and based on our examination
which included test checks, except for
instances mentioned below, the Company,
in respect of financial year commencing on 1
April 2024, has used accounting software for
maintaining its books of account which have a
feature of recording audit trail (edit log) facility
and the same have been operated throughout
the year for all relevant transactions recorded
in the software. Further, during the course of
our audit we did not come across any instance
of audit trail feature being tampered with,
other than the consequential impact of the
exceptions given below. Furthermore, except
for instances mentioned below, the audit trail
has been preserved by the Company as per
the statutory requirements for record retention.
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Nature of exception noted
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Details of Exception
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Instances of accounting software for
maintaining books of account for which the
feature of recording audit trail (edit log) facility
was not operated throughout the year for all
relevant transactions recorded in the software
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The audit trail feature was not enabled at the database level for accounting
software to log any direct data changes, used for maintenance of all
accounting records by the Company.
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Instances of accounting software maintained
by a third party where we are unable to
comment on the audit trail feature at database
level
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The accounting software used for maintenance of payroll records is
operated by a third-party software service provider. In the absence of any
information on existence of audit trail (edit logs) for any direct changes made
at the database level in the ‘Independent Service Auditor's Assurance Report
on the Description of Controls, their Design and Operating Effectiveness'
(‘Type 2 report' issued in accordance with SAE 3402, Assurance Reports on
Controls at a Service Organization), we are unable to comment on whether
audit trail feature with respect to the database of the said software was
enabled and operated throughout the year.
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For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Vijay Vikram Singh
Partner
Membership No.: 059139
UDIN: 25059139BMKTAO7373
Hyderabad
16 May 2025
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