We have audited the accompanying Standalone Financial
Statements of SIGACHI INDUSTRIES 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 Changes in Equity and the Statement
of Cash Flows ended on that date, and a summary of material
accounting policies and other explanatory information
(hereinafter referred to as the "Standalone Financial Statements").
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid Standalone Financial
Statements give the information required by the Companies Act,
2013 as amended (the "Act") in the manner so required and give
a true and fair view in conformity with the Indian Accounting
Standards prescribed under section 133 of the Act read with
the Companies (Indian Accounting Standards) Rules, 2015, as
amended, ("Ind AS") and other accounting principles generally
accepted in India, of the state of affairs of the Company as at
March 31, 2025, the profit and total comprehensive income,
changes in equity and its cash flows for the year ended on that
date.
BASIS FOR OPINION
We conducted our audit of the Standalone Financial Statements
in accordance with the Standards on Auditing ("SA"s) 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 made thereunder, and we
have fulfilled our other ethical responsibilities in accordance with
these requirements and the ICAI's Code of Ethics. We believe that
the audit evidence obtained by us is sufficient and appropriate to
provide a basis for our audit opinion on the Standalone Financial
Statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the Standalone
Financial Statements for the financial year ended March 31,2025.
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. We have determined the matters described below
to be the key audit matters to be communicated in our report.
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Sr.
No
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Key Audit Matter
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How our audit addressed the key audit matter
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1
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Appropriateness of capitalization of costs included in
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Our Audit procedures included the following:
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Property Plant and Equipment as per Ind AS 16 Property,
Plant and Equipment.
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i. We understood from the management details of
the capitalization costs.
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Refer to Note - 2.06 (Material Accounting Policies on
Property, Plant and equipment), Note - 3 (Property, plant
and equipment and Capital work-in progress) of the enclosed
standalone financial statements.
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ii. Understood, evaluated and tested the design and operating
effectiveness of key controls relating to capitalization of
various costs incurred in relation to Property Plant and
Equipment.
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During the year, the Company has capitalized significant
capital expenditure towards production plants at Dahej and
Jhagadia
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iii. Performed test of details with focus on those items that we
considered significant due to their amount or nature and
tested a sample of items capitalized during the year against
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Opening Balance of CWIP as on 1st April 2024 was H 9,056.46
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underlying supporting documents to ascertain nature
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lakhs. During the year there was addition of H 3,798.37 lakhs
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of costs and whether they meet the recognition criteria
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to CWIP (including borrowing cost of H159.50 lakhs) and
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provided in the Ind AS 16, Property, Plant and Equipment
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capitalization of assets worth H12,367.57lakhs.
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in this regard.
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The Capitalization majorly includes below projects
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vi.
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Verified the other related costs including those incurred
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undertaken by the Company:
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towards repairs and maintenance and debited to Statement
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d) The Company is Expanding additional production
plant unit Dahej & Jhagadia situated at Bharuch,
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of Profit and Loss, to ascertain whether these meet the
criteria for capitalization.
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Gujarat-393110, which will be used for production of
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vii.
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Reviewed the management's procedure to review the
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Micro Crystalline Cellulose.
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periodic progress of the projects based on certification by
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e) The Company is expanding its capacity of Dahej Sez
From 4800 MTPA to 8400 MTPA in Dahej and from 2750
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the project management consultants and correspondent
running bills submitted by the contractors.
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MTPA To 6350 MTPA in Jhagadia
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viii.
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As it is a Qualifying Asset at the management discretion
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Given the significance of the capital expenditure during the
year, there is a risk that elements of costs that are ineligible
for capitalization in accordance with the recognition criteria
provided in Indian Accounting Standard 16 -Property, Plant
and Equipment are capitalized and that costs that should
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and the period of completion involves Substantial period of
time the related Borrowing costs have been appropriately
capitalized to the Capital work in progress according to the
compliances mentioned in the Ind AS-23 (i.e., Borrowing
Cost).
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have capitalized have been expensed.
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ix.
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Discussion of audit observations with the management/
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Since the amounts involved in the development of the above
project was significant and material, the audit of the above
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accounts and finance team for clarification as and when
required.
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area was considered to be a key audit matter for reporting
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x.
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We have verified the documents obtained from concerned
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purpose
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chartered engineer regarding capitalization costs.
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Our procedures as mentioned above did not identify any costs that
had been inappropriately capitalized and that costs that should
have capitalized have been expensed
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2 Share Capital:
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Our Audit procedures included the following:
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Preferential Allotment of shares:
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i.
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Enquiry with those charged with the governance and the
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The Company made an allotment of Convertible Equity
share warrants which were in compliance of Sec 42(7) of the
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key managerial personnel about the procedure followed for
issue of the Convertible Warrants
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Companies Act, 2013(read with the respective rules) and in
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ii.
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review of the minute books of
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accordance with Chapter-V of SEBI(ICDR) Regulations 2018,
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• the board of directors and
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on a preferential allotment basis consisting of 1,09,75,000
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• shareholders;
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warrants of '10 each at a premium of '251 per share
amounting to ' 28,644.75 lakhs which was then spilt into
the ratio of 10:1.
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iii.
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Referred the relevant provisions of the Companies Act 2013
read with the Companies (Share Capital and Debenture
Rules) 2014, as applicable to ascertain whether the same
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The warrants were converted into equity shares in the two
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have been complied with;
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allotments as stated below:
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iv.
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Review of compliance with respect to applicable guidelines
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On 30th August 2024 the company made an allotment
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of SEBI regulations
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52,52,190 equity shares of HI/- each to non -promoters
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v.
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review of various e-forms submitted to the Ministry of
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Group on conversion of 5,25,219 warrants at an issue price
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Corporate Affairs (MCA) in compliance with the provisions
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of ' 261/- per share of '10/- each.
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of the Companies Act 2013 and the relevant rules;
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On 08th February 2025 the company made an allotment
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vi.
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review of valuation report issued by the registered valuer in
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4,86,69,840 equity shares of H1/- each to promoters and
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accordance with the provisions of the Companies (Registered
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non -promoters group on conversion of 48,66,984 warrants
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Valuers and Valuation) Rules 2017 for fair value for issue of
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at an issue price of H 261/- per share of '10/- each.
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the shares at the price at| which theses equity shares were
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Some of the warrant holders were not fully subscribed within
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issued during the year
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due date as required by the scheme . The proportionate
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vii.
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Companies act requirements have been verified in respect of
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amount of H 22.87 crores was forfeited during the year due
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forfeiture of shares along with the board resolution.
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to non payment .
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viii.
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appropriate disclosure in the financial statements in
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Since the amount involved is material and significant, audit
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accordance with the IND AS, and the requirements of
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of above area was considered to be key audit matter for
reporting purpose
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schedule III
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3 Timing of Revenue recognition in the proper period as
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Our audit procedures included the following:
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per Ind AS 115.
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i.
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We evaluated the design and tested operating effectiveness
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Refer to Note-2.14 (Material Accounting Policies on Revenue
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of the relevant controls with respect to revenue recognition
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Recognition) and Note-24 (Revenue from operations) of the
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including those relating to cut off at year end;
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standalone financial statements.
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ii.
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We assessed the appropriateness of the revenue recognition
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In accordance with Ind AS 115, Revenue from Contracts
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accounting policies in line with Ind AS 115 "Revenue from
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with Customers, revenue from sale of goods is recognized
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Contracts with Customers";
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when control of the products being sold is transferred to
the customer based on terms of sale. Revenue is measured
at consideration to which an entity expects to be entitled
in exchange for transferring promised goods or services
to a customer, excluding amounts collected on behalf of
third parties. The transaction price of the goods sold is net
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iii.
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We performed substantive testing of revenue transactions,
recorded during the year by testing the underlying
documents which included customer order and directions,
goods dispatch notes, shipping documents and customer
acknowledgments as applicable;
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of variable consideration on account of various discounts
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iv.
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We tested a sample of manual journal entries posted to
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offered by the company as part of contract.
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revenue and assessed their appropriateness;
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We identified timing of revenue recognition in the proper
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v.
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We tested, on a sample basis, specific revenue transactions
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period as a key audit matter since it involves higher assessed
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recorded before and after the financial year end date
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risk of material misstatement and is required to be recognized
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including examination of credit notes issued after the year
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as per the requirements of applicable accounting framework.
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end to determine whether the revenue has been recognized
in the appropriate financial period. Based on the above
stated procedures, no significant exceptions were noted in
revenue recognition.
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INFORMATION OTHER THAN THE FINANCIAL STATEMENTS
AND AUDITOR'S REPORT THEREON
The Company's Management & Board of Directors is responsible
for the other information. The other information comprises the
information included in the Management Discussion and Analysis,
Board's Report including Annexures to Board's Report, Business
Responsibility Report, Corporate Governance and Shareholder's
Information, but does not include the Standalone Financial
Statements and our auditor's report thereon. The Company's
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 do not express any form of
assurance conclusion thereon.
In connection with our audit of the Standalone Financial
Statements, our responsibility is to read the other information
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 during the course of our audit or otherwise appears to
be materially misstated.
If, based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
MANAGEMENT'S & BOARD OF DIRECTORS'
RESPONSIBILITIES FOR THE STANDALONE FINANCIAL
STATEMENTS
The Company's Management &Board of Directors is responsible for
the matters stated in section 134(5) of the Act with respect to the
preparation of these Standalone Financial Statements that give a
true and fair view of the financial position, financial performance,
including other comprehensive income, changes in equity and
cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the Indian
Accounting Standards (Ind AS) specified under Section 133 of the
Act read with the Companies (Indian Accounting Standards) Rules,
2015, as amended. This responsibility also includes maintenance
of adequate accounting records in accordance with the provisions
of the Act for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the Standalone Financial
Statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, management
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
management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the
Company's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE
STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether
the Standalone Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue
an auditor's report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with SAs will always detect a material
misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional skepticism throughout the
audit. We also:
• Identify and assess the risks of material misstatement of the
Standalone Financial Statements, whether due to fraud or
error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
• Obtain an understanding of internal financial 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 system 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 the management.
• Conclude on the appropriateness of Management & Board
of Directors use of the going concern basis of accounting
in preparation of standalone financial statements and,
based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the Company's ability to
continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our
auditor's report to the related disclosures in the Standalone
Financial Statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor's
report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the
Standalone Financial Statements, including the disclosures,
and whether the Standalone Financial Statements represent
the underlying transactions and events in a manner that
achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone
Financial Statements that, individually or in aggregate, makes
it probable that the economic decisions of a reasonably
knowledgeable user of the Standalone Financial Statements
may be influenced. We consider quantitative materiality and
qualitative factors in (i)planning the scope of our audit work
and in evaluating the results of our work; and (ii)to evaluate the
effect of any identified misstatements in the Standalone Financial
Statements.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the Standalone Financial Statements
of the current period and are therefore the key audit matters.
We describe these matters in our 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
1. As required by Companies (Auditor's Report) Order 2020("the
order"), issued by the Central government of India in terms
of sub-section (11) of section 143 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.
2. A. As required by section 143(3) of the act, we report that:
a) We have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by
law have been kept by the Company so far as it appears
from our examination of those books of account
c) The Standalone Balance Sheet, the Standalone
Statement of Profit and Loss including Other
Comprehensive Income, the Standalone Statement of
Changes in Equity and the Standalone Statement of
Cash Flows dealt with by this Report are in agreement
with the relevant books of account.
d) In our opinion, the aforesaid Standalone Financial
Statements comply with the Ind AS specified under
Section 133 of the Act, read with Companies (Indian
Accounting Standards) Rules, 2015, as amended.
e) On the basis of the written representations received
from the directors as on March 31, 2025 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) With respect to the adequacy of the internal financial
controls over financial reporting of the Company and
the operating effectiveness of such controls, refer
to our separate Report in "Annexure-B" Our report
expresses an unmodified opinion on the adequacy
and operating effectiveness of the Company's internal
financial controls over financial reporting.
g) 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:
a) The Company has disclosed the impact of
pending litigations on its financial position in its
Standalone Financial Statements.
b) The Company did not have any long-term
contracts including derivative contracts for which
there were any material foreseeable losses.
c) There has been no delay in transferring amounts,
required to be transferred, to the Investor
Education and Protection Fund by the Company
and its subsidiary companies incorporated in
India.
d) i. The Management has represented that, to
the best of its knowledge and belief, no
funds (which are material either individually
or in the aggregate)have been advanced or
loaned or invested(either from borrowed
funds or share premium or any other
sources or kind of funds) by the Company
to or in any other person or entity, including
foreign entity ("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 ("Ultimate Beneficiaries") or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries;
ii. The Management has represented, that,
to the best of its knowledge and belief, no
funds (which are material either individually
or in the aggregate) have been received by
the Company from any person or entity,
including foreign entity ("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;
iii. Based on the audit procedures that
have been considered reasonable and
appropriate in the circumstances, nothing
has come to our notice that has caused us
to believe that the representations under
sub-clause (i) and (ii) of Rule 11(e), as
provided under (i) and (ii) above, contain
any material misstatement.
e) The dividend paid by the Company during the year, in
respect of the same declared for the previous year is in
accordance with Section 123 of the Act to the extent it
applies to payment of dividend.
f) The reporting under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014 is applicable from 1
April 2023.
Based on our examination which included test checks,
the Company has used accounting software for
maintaining its books of account, which have a feature
of recording audit trail (edit log) facility and the same
has operated throughout the year for all relevant
transactions recorded in the respective software.
Further, we did not come across any instance of the
audit trail feature being tampered with.
3. With respect to the matter to be included in the Auditor's
Report under Section 197(16) of the Act:
In our opinion and according to the information and
explanations given to us, the remuneration paid by the
Company to its directors during the current year is in
accordance with the provisions of Section 197 of the Act.
The remuneration paid to any director is not in excess of the
limit laid down under Section 197 of the Act. The Ministry
of Corporate Affairs has not prescribed other details
under Section 197(16) of the Act which are required to be
commented upon by us.
For Yelamanchi & Associates
Chartered Accountants
Firm Reg No :000041S
G Jayanth Srinivas (FCA)
Partner
Membership No:251026
Date: 30/05/2025
Place: Hyderabad
UDIN: 25251026BMLXLY9484
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