We have audited the accompanying Standalone Financial
Statements of Zodiac Clothing Company Limited (“the
Company”), which comprise the Balance Sheet as at March
31, 2025, and the Statement of Profit and Loss, including
Other Comprehensive Income, Statement of Changes in
Equity and Statement of Cash Flows for the year then
ended, and notes to the Standalone Financial Statements,
including material accounting policy information 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 (“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
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, and loss (including other
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 (SAs) 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 obtained by us 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
Standalone Financial Statements for the 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 the key audit matter was addressed in our audit
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1.
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Recoverability of deferred tax assets (Refer Note
37 to the Standalone Financial Statements))
The carrying value of deferred tax assets is
1,029.45 Lakhs as at March 31, 2025. Deferred tax
assets are recognised on unabsorbed depreciation
and other deductible temporary differences as it is
considered to be recoverable based on the
Company’s projected future taxable income, in line
with Ind AS 12-Income Taxes.
We considered this as a Key Audit Matter due to
uncertainties and significant judgement required by
the Management in preparation of projected future
taxable income considering the underlying
assumptions such as fair value of immovable
properties, as also assessed by an external registered
valuer.
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Our audit procedures with respect to this matter included, but
were not limited to, the following:
• Obtained an understanding, evaluated design and operating
effectiveness of the relevant key controls over recording and
review of deferred tax at each reporting date.
• Reviewed the Company’s accounting policy in respect of
recognizing deferred tax asset on temporary differences,
unabsorbed business loss and unabsorbed depreciation.
• Evaluated the judgements and assumptions made by the
Management in determining the projected future taxable
income for reasonableness.
• We tested the computation of the amounts recognized as
deferred tax assets and assessed the appropriateness of tax
rate applied to the projected future taxable income.
• Evaluated the competence, capabilities and objectivity of the
external registered valuer engaged by the Management.
• We engaged our valuation experts to assess the appropriateness
of the valuation methodology, evaluate the key underlying
assumptions, and verify the accuracy of the input data (such
as description, area) used in the valuation report of the
immovable properties.
• We involved our tax experts to review the utilization of
available tax benefits against projected future taxable income
in line with applicable tax laws, and the resulting recognition
of deferred tax assets.
• Reviewed the adequacy of disclosures made in the Standalone
Financial Statements with regards to deferred taxes.
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Sr.
No.
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Key audit matter
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How the key audit matter was addressed in our audit
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2.
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Assessment of carrying value of property,
plant and equipment
(Refer to Notes 4(a) in the Standalone Financial
Statements)
The carrying value of Assets is 7,938.47 Lakhs as at
March 31, 2025, which is significant to the balance
sheet. The Management has assessed whether there
are any indications for impairment of assets
considering internal and external sources of
information, as per Ind AS 36 Impairment of Assets.
For the purposes of impairment testing, the carrying
value of the cash generating unit (CGU) was
compared to the recoverable amount of CGU. The
Company has applied fair value less costs of disposal
method in determining the recoverable value of
CGU. In this connection, the Management has
engaged an external registered valuer to determine
the fair value of immovable properties and, the fair
value of other assets were determined on the basis of
management’s judgement and estimates. Based on
the assessment, the Management has concluded that
no impairment was required as of March 31, 2025.
Considering significant carrying value of Assets,
involvement of valuation expert, judgment and
estimates made by Management, we have considered
this as a Key Audit Matter.
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We have performed audit procedures including the following:
• Obtained an understanding, evaluated design and operating
effectiveness of the relevant key controls relating to
impairment assessment including determining recoverable
value of Assets.
• Assessed whether the Company’s identification of CGU is
appropriate.
• Perused the report issued by the external professional valuer
engaged by the management.
• Evaluated the competence, capabilities and objectivity of the
external registered valuer engaged by the Management for
valuation of immovable properties.
• We engaged our valuation experts to assess the appropriateness
of the valuation methodology, evaluate the key underlying
assumptions, and verify the accuracy of the input data (such
as description, area) used in the valuation report of the
immovable properties.
• Evaluated the reasonableness of assumptions applied by
management, in determining the fair value of other assets.
• Performed sensitivity analysis over the key assumptions, to
assess the potential impact on impairment results and the
range of possible outcomes of recoverable value of Assets.
• Reviewed the adequacy of disclosures made in the Standalone
Financial Statements.
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Information Other than the Standalone Financial
Statements and Auditor’s Report Thereon
The Company’s Board of Directors is responsible for the
other information. the other information comprises the
information included in the Management Discussion and
Analysis, Director’s Report including Annexure to Board’s
Report but does not include the Standalone Financial
Statements and our auditor’s report thereon.
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 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. 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.
Responsibilities of Board of Directors for the Standalone
Financial Statements
The Company’s 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,
changes in equity and cash flows of the Company in
accordance with the accounting principles generally
accepted in India, including the Accounting Standards
specified under section 133 of the Act. 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 standalone financial
statement 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, the
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 the Board of Directors either intends to liquidate
the Company or to cease operations, or has no realistic
alternative but to do so.
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
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.
We give in “Annexure A” a detailed description of
Auditor’s responsibilities for Audit of the Standalone
Financial Statements.
Report on Other Legal and Regulatory Requirements
1. 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 Act, we give in “Annexure B” a
statement on the matters specified in paragraphs 3 and
4 of the Order, to the extent applicable.
2. 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, except
that back-up of the books of account and other books
and papers maintained in electronic mode has neither
been taken on a daily basis as explained in Note 48
to the Standalone Financial Statements and also for
the matters stated in the paragraph 2 (h)(vi) below on
reporting under Rule 11(g).
(c) The Balance Sheet, the Statement of Profit and Loss
including other comprehensive loss, the Statement of
Changes in Equity and the Statement of Cash Flow
dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid Standalone Financial
Statements comply with the Accounting Standards
specified under Section 133 of the Act.
(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
are disqualified as on March 31, 2025 from being
appointed as a director in terms of Section 164 (2) of
the Act.
(f) The reservation relating to the maintenance of accounts
and other matters connected therewith are as stated
in paragraph 2 (b) above on reporting under Section
143(3)(b) and paragraph 2 (h)(vi) below on reporting
under Rule 11(g).
(g) With respect to the adequacy of the internal financial
controls with reference to Standalone Financial
Statements of the Company and the operating
effectiveness of such controls, refer to our separate
Report in “Annexure C”.
(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, in
our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending
litigations on its financial position in its Standalone
Financial Statements - Refer Note 39 to the
Standalone Financial Statements;
ii. The Company did not have any long-term contracts
including derivative contracts for which there were
any material foreseeable losses;
iii. There were no amounts which were required to be
transferred to the Investor Education and Protection
Fund by the Company.
iv.
1. 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 person(s) or entity(ies), 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 by or on behalf of the Company
(“Ultimate Beneficiaries”) or provide any guarantee,
security or the like on behalf of the Ultimate
Beneficiaries.
2. The Management has represented, that, to the
best of its knowledge and belief, no funds have
been received by the Company from any person(s)
or entity(ies), including foreign entities (Funding
Parties), with the understanding, whether recorded
in writing or otherwise, as on the date of this audit
report, that the Company shall, 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.
3. Based on the audit procedures performed that have
been considered reasonable and appropriate in the
circumstances, and according to the information and
explanations
provided to us by the Management in this regard
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 (1) and (2)
above, contain any material mis-statement.
v. The Company has neither declared nor paid any
dividend during the year.
vi. Based on our examination which included test
checks, the Company has used an accounting
software for maintaining its books of account
which has a feature of recording audit trail (edit
log) facility, as explained in Note 48 to the
Standalone Financial Statements.
Further, where enabled, audit trail feature has been
operated for all relevant transactions recorded in
the accounting software. Also, during the course of
our audit, we did not come across any instance of
audit trail feature being tampered with in respect
of such accounting software. Additionally, the
audit trail of prior year has been preserved by the
Company as per the statutory requirements for
record retention to the extent it was enabled and
recorded in previous year.
Based on our examination which included test
checks, the Company has used revenue accounting
software for maintaining its books of account
which has a feature of recording audit trail (edit
log) facility, except that no audit trail feature
was enabled at the database level in respect of
an accounting software to log any direct data
changes as explained in Note 48 to the Standalone
Financial Statements.
Further, where enabled, audit trail feature has been
operated for all relevant transactions recorded in
the accounting software. Also, during the course of
our audit, we did not come across any instance of
audit trail feature being tampered with in respect
of such accounting software. Additionally, the
audit trail of prior year has been preserved by the
Company as per the statutory requirements for
record retention to the extent it was enabled and
recorded in the previous year.
3. In our opinion, according to information, explanations
given to us, the remuneration paid by the Company to
its directors is within the limits laid prescribed under
Section 197 read with Schedule V of the Act and the
rules thereunder.
For M S K A & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Ankush Agrawal
Partner
Membership No. 159694
UDIN: 25159694BMLWGX5991
Place: Mumbai
Date: May 28, 2025
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