We have audited the Separate Financial Statements of RAJAPALAYAM MILLS LIMITED
("the Company"), which comprise the Separate Balance Sheet as at March 31, 2025, and the
Separate Statement of Profit and Loss, the Separate Statement of changes in Equity and the
Separate Statement of cash flows for the year ended on that date, and notes to the Separate
Financial Statements, including a summary of material accounting policies and other explanatory
information (hereinafter referred to as "the Separate Financial Statements")
In our opinion and to the best of our information and according to the explanations given to us,
the aforesaid Separate 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
accounting principles generally accepted in India, of the state of affairs of the Company as at
March 31, 2025, and the loss and total comprehensive loss, changes in equity and its cash flows
for the 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 Companies Act, 2013. Our responsibilities under those Standards are further
described in the Auditor's Responsibilities for the Audit of the Separate 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 together with the ethical requirements that
are relevant to our audit of the Separate Financial Statements under the provisions of the Companies
Act, 2013 and the Rules there under, 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
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the Separate Financial Statements of the current period. These matters were
addressed in the context of our audit of the Separate 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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S.No.
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Key Audit Matter
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Auditors' Response
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1
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Recognition and measurement of deferred
taxes
The recognition and measurement of
deferred tax items requires determination of
differences between the recognition and the
measurement of assets, liabilities, income
and expenses in accordance with the Income
Tax Act and other applicable tax laws
including application of ICDS and financial
reporting in accordance with Ind AS.
Assessment of Deferred Tax Assets is done
by the management at the close of each
financial year taking into account forecasts
of future taxable results.
We have considered the assessment of
deferred tax liabilities and assets as a key
matter due to the importance of
management's estimation and judgment and
the materiality of amounts.
(Refer to Note No. 5C (iii), (iv), (v) & 6(iv)
to the Separate Financial Statements)
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Principal Audit Procedures
The key matter was addressed by performing
audit procedures which involved assessment
of underlying process and evaluation of
internal financial controls with respect to
measurement of deferred tax and re¬
performance of calculations and assessment
of the items leading to recognition of deferred
tax in light of prevailing tax laws and
applicable financial reporting standards.
Furthermore we assessed the adequacy and
appropriateness of the disclosures in the
Separate Financial Statements.
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2
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Evaluation of uncertain Tax Position /
Other contingent liabilities
The Company has material uncertain tax
position in respect of possible or actual
taxation disputes, litigations and claims and
other contingent liabilities. The provisions
are estimated using a significant degree of
management judgment in interpreting the
various relevant rules, regulations and
practices and in considering precedents in
various legal forums.
(Refer to Note No. 45 to the Separate
Financial Statements)
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Principal Audit Procedures
The Audit addressed this Key Audit Matter
by assessing the adequacy of tax Provisions
by reviewing the management's underlying
assumptions in estimating the tax provisions
and the possible outcome of the disputes.
We reviewed the significant litigations and
claims and discussed with the Company's
legal counsel, external advisors about their
views regarding the likely outcome and
magnitude of and exposure to relevant
litigation and claims.
We also reviewed the relevant judgments
and the opinions given by the company's
advisers, which were relied on by the
management for such claims.
Furthermore we assessed the adequacy and
appropriateness of the disclosures in the
Separate Financial Statements.
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S.No.
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Key Audit Matter
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Auditors' Response
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3
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Existence and impairment of Trade
Receivables
Trade Receivables are significant to the
Company's financial statements. The
Collectability of trade receivables is a key
element of the company's working capital
management, which is managed on an
ongoing basis by its management. Due to
the nature of the Business and the
requirements of customers, various contract
terms are in place, there is a risk that the
carrying values may not reflective of their
recoverable amounts as at the reporting date,
which would require an impairment provision.
Where there are indicators of impairment,
the company undertakes assessment of the
recoverability of the amounts. Given the
magnitude and inherent uncertainty involved
in the judgment, involved in estimating
impairment assessment of trade receivables,
we have identified this as a key audit matter.
(Refer to Note no. 17 to the Separate
Financial Statements)
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Principal Audit Procedures
We performed audit procedures on the
assessment of trade receivables, which
included substantive testing of revenue
transactions, obtaining trade receivable
external confirmations and testing the
subsequent payments received. Assessing
the impact of impairment on trade
receivables requires judgment and we
evaluated management's assumptions in
determining the provision for impairment of
trade receivables, by analyzing the ageing
of receivables, assessing significant overdue
individual trade receivables and specific
local risks, combined with the legal
documentations, where applicable.
We also reviewed the system of obtaining
periodical confirmation from the customers,
which are kept in electronic mode by the
company. We tested the timing of revenue
and trade receivables recognition based on
the terms agreed with the customers. We
also reviewed, on a sample basis, terms of
the contract with the customers, invoices
raised, etc., as a part of our audit
procedures.
Furthermore we assessed the adequacy and
appropriateness of the disclosures in the
Separate Financial Statements.
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4
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Evaluation of Carrying value of
Non-Current Investments
The Company has Non-Current Investments
in listed associates and other companies,
amounting to $ 17,543.69 lakhs as at 31st
March 2025 which is 10.26% of the total
value of assets of the company. The
Company's investments are valued at Cost
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Principal Audit Procedures
We examined the policies and
methodologies used by the management to
estimate the carrying value of each
investment.
We evaluated the assessment techniques
for forecasting the future cash flows and
revenue estimates used by the management
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S.No.
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Key Audit Matter
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Auditors' Response
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less any impairment. These investments are
assessed for impairment when an indicator
of impairment exists. The management
assess annually the existence of impairment
indicators of each investment and made
necessary changes in the value of such
investment as on Balance Sheet date. The
processes and methodologies for valuation
and identification of impairment in the value
of investments of unlisted companies
requires application of significant judgment
by the Company. The judgment has to be
made with respect to the timing, quantity and
estimation of future discounted cash flows
of the unlisted entities. It involves significant
estimates and judgment by the management
because of the inherent uncertainty involved
in forecasting the investee's future
performance and discounting future cash
flows. We consider the valuation and
assessment of impairment in value of such
investments to be significant to the audit,
because of the materiality of the value of
investments in the separate financial
statements of the Company and estimates
and judgments involved in assessing the
various unobservable valuation inputs like
estimating the future cash flows. Accordingly,
the valuation and assessment of impairment
value in such investments of unlisted entities
is determined to be key audit matter in our
audit of the separate financial statements.
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to assess the future prospect of the investee
companies.
We examined the report furnished to us by
the management for the valuation of the
business to assess the investment value in
Companies.
We reviewed and compared the estimates
made by the management with the
externally available industry data.
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Information other than the Separate Financial Statements and Auditors' Report thereon
The Company's Management and Board of Directors are responsible for the other information.
The other information comprises the information included in the Company's annual report, Board's
Report including Annexure to Board's Report, Corporate Governance and Report on CSR activities,
and Shareholders information but does not include the Separate Financial Statements and our
auditors' report thereon.
Our opinion on the Separate 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 Separate Financial Statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the Separate 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 Responsibility for the Separate Financial Statements
The Company's Management and Board of Directors are responsible for the matters stated in
Section 134(5) of the Act with respect to the preparation of these Separate 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
Indian Accounting Standards (Ind AS) prescribed under Section 133 of Companies Act, 2013 read
with relevant rules issued there under and 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 Separate Financial Statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the Separate Financial Statements, Management and Board of Directors are 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.
Those Board of Directors are also responsible for overseeing the Company's financial reporting
process.
Auditors' Responsibilities for the Audit of the Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the Separate Financial Statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditors' 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 Separate 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 Separate 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 controls relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under Section 143(3)(i) of the Companies Act, 2013,
we are also responsible for expressing our opinion on whether the company has adequate internal
financial controls with reference to Separate 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 management's 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
auditors' report to the related disclosures in the Separate 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 auditors' 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 Separate Financial Statements,
including the disclosures, and whether the Separate Financial Statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Separate Financial Statements that, individually or
in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of
the Separate 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 Separate 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 Separate Financial Statements of the current period and
are therefore the key audit matters. We describe these matters in our auditors' 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
As required by the 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 Companies Act, 2013, we
give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
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.
(c) The Separate Balance Sheet, the Separate Statement of Profit and Loss including Other
Comprehensive Income, the Separate Statement of changes in equity and the Separate
statement of Cash Flow dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Separate Financial Statements comply with the Indian Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014.
(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 control over financial reporting.
(g) With respect to the other matters to be included in the Auditors' Report in accordance with the
requirements of Section 197(16) of the Act, as amended.
In our opinion and to the best of our information and according to the explanations given to
us, the remuneration paid by the Company to its directors during the year is in accordance
with the provisions of Section 197 of the Act.
(h) With respect to the other matters to be included in the Auditors' Report in accordance with
Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best
of our information and according to the explanations given to us:
i. The Company has disclosed the details of the pending litigations and its impact on the
financial position in its Separate Financial Statements have been disclosed in Note No.
45 of the Disclosures forming part of the Separate Financial Statements for the year
ended March 31, 2025;
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the
Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no
funds 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 persons or entities, including foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall,
directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented that, to the best of its knowledge and belief, no
funds have been received by the Company from any persons or entities, including
foreign entities ("Funding Parties"), with the understanding, whether recorded in
writing or otherwise, that the Company shall directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries")
by or on behalf of the Funding Parties or provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed 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) of
Companies (Audit and Auditors) Rules, 2014, as provide under (a) and (b) above,
contain any material mis-statement.
v. The dividend proposed in the previous year, declared and paid by the Company during
the year is in accordance with Section 123 of the Act.
As stated in Note No. 57 to the Separate Financial Statements, the Board of Directors of
the Company have proposed dividend for the year which is subject to the approval of the
members at the ensuing Annual General Meeting. The amount of dividend proposed is
in accordance with Section 123 of the Act.
vi. Based on our examination, which included test checks, the company has used accounting
software for maintaining its books of account for the financial year ended March 31, 2025
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. Further, during
the course of audit, we did not come across any instance of the audit trail feature being
tampered with and the audit trail has been preserved by the Company as per the statutory
requirements for record retention.
For N.A. JAYARAMAN & CO For SRSV & ASSOCIATES,
Chartered Accountants Chartered Accountants
Firm Registration No. 001310S Firm Registration No. 015041S
T.G HARISHA V. RAJESWARAN
Partner Partner
Membership No. 246983 Membership No. 020881
UDIN: 25246983BMOKNM2395 UDIN: 25020881BMKQGX7275
Rajapalayam Chennai
28th May, 2025 28th May, 2025
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