We have audited the accompanying standalone Ind AS financial
statements of Sudarshan Chemical Industries Limited ("the
Company"), which comprise the Balance sheet as at March 31,
2025, the Statement of Profit and Loss, including the statement
of Other Comprehensive Income, the Cash Flow Statement and
the Statement of Changes in Equity for the year then ended, and
notes to the standalone Ind AS financial statements, including a
summary of material accounting policies and other explanatory
information (hereinafter referred to as "the standalone Ind AS
financial statements").
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone Ind
AS 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
accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31,2025, its profit including
other comprehensive income, its cash flows and the changes in
equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial
statements in accordance with the Standards on Auditing (SAs),
as 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 Ind AS 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
standalone Ind AS 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 audit opinion on the standalone Ind AS 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 Ind AS financial statements for the financial year
ended March 31, 2025. These matters were addressed in
the context of our audit of the standalone Ind AS financial
statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters. For each
matter below, our description of how our audit addressed the
matter is provided in that context.
We have determined the matters described below to be
the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the 'Auditor's
Responsibilities for the Audit of the standalone Ind AS financial
statements' section of our report, including in relation to these
matters. Accordingly, our audit included the performance of
procedures designed to respond to our assessment of the risks
of material misstatement of the standalone Ind AS financial
statements. The results of our audit procedures, including the
procedures performed to address the matters below, provide
the basis for our audit opinion on the accompanying standalone
Ind AS financial statements.
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Key audit matters
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How our audit addressed the key audit matter
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Timing of recognition of revenue (as described in note 2.3(d) (Summary of material accounting policies) and note 26 forming
part of the standalone Ind AS financial statements)
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The Company manufactures and sells a wide
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Our audit procedures included the following:
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range of goods such as organic, inorganic and
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We obtained understanding of the Company's sales process, including
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effect pigments. Revenue from sale of goods
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design and implementation of controls and tested the design and operating
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is recognised net of discounts, rebates, sales
return and taxes when control of the goods are
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effectiveness of these controls.
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transferred to the customer in accordance with
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We read the Company's accounting policies pertaining to revenue recognition
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the recognition and measurement principles of
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and assessed compliance with Ind AS 115 - Revenue from Contracts with
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Ind AS 115.
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Customers.
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Determination of point in time when control of
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We obtained and read the terms of customer contracts on a sample basis to
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the goods is transferred to the customer involves
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assess various performance obligations in the contract, the point in time of
transfer of control of goods to customers and pricing terms.
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establishing the present right to receive payment
for the products, delivery specifications, shipping
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We tested on a sample basis sales invoice for identification of point in time for
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terms, timing of transfer of legal title of the goods
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transfer of control and terms of contract with customers. Further, we performed
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and determination of the point of acceptance of
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procedures to test on a sample basis whether revenue was recognized in the
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goods by the customers. These considerations
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appropriate period (including at year end) by testing underlying sales orders,
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require exercise of significant judgements by the
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sales invoice copies, lorry receipts, shipping records, customer acceptances
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management.
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etc. and tested the management assessment involved in the process, wherever
applicable.
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Considering the multitude and variety of
contractual terms and significant judgments
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We performed various analytical procedures to identity any unusual sales
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involved, determination of point in time of
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trends for further testing.
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transfer of control of goods has been identified
as a key audit matter.
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We also assessed the disclosure relating to revenue in accordance with
applicable accounting standards in the standalone Ind AS financial statements
of the Company.
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Hedge accounting including valuations thereof (as described in note 2.3(s) (Summary of material accounting policies)
and note 15, note 17, note 22 and note 51 of notes forming part of the standalone Ind AS financial statements)
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The Company enters into derivative instruments
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Our audit procedures included the following:
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which comprise of interest rate swaps, cross
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We obtained understanding of the Company's overall hedge accounting
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currency swaps and also designates its foreign
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strategy, derivative instrument valuation and hedge accounting process from
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currency borrowings against highly probable
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initiation to settlement of derivative instruments including assessment of the
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forecasted export sales for hedge accounting to
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design and implementation of controls and tested the design and operating
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manage its foreign currency exposure.
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effectiveness of these controls.
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These instruments are measured at fair values
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We read the Company's accounting policy for hedge accounting in accordance
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at each reporting period resulting in derivative
financial assets and derivative financial liabilities.
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with relevant accounting standards.
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The gain / loss on maturity/ termination of
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We tested the existence of derivative instruments by tracing to the independent
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such derivative instruments is recorded in the
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confirmations obtained from respective banks.
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statement of profit and loss along with the
relevant hedged item.
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We tested management's hedge documentation and contracts, on a sample
basis.
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Key audit matters
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How our audit addressed the key audit matter
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Considering the significant complexities and
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We tested on a sample basis the fair values of derivative instruments recorded
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judgements involved in estimating highly
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by the Company with the independent balance confirmations obtained from
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probable forecasted sales transactions, future
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banks.
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foreign exchange rates, determination of
effectiveness of hedge and the fact that these
transactions have a significant financial effect
and extensive accounting and disclosure
requirements, hedge accounting has been
identified as a key audit matter.
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We involved valuation specialists in re-performing the year-end fair valuations
including evaluation of hedge effectiveness of derivative instruments on
a sample basis and compared these valuations with those recorded by the
Company and assessed the valuation methodology and key assumptions used
therein.
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We assessed the disclosure is in accordance with applicable accounting
standards in the standalone Ind AS financial statements of the Company.
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Impairment assessment of material investments in subsidiaries (as described in note 2.3(b) (Summary of material
accounting policies) and note 6 of notes forming part of the standalone Ind AS financial statements)
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The Company has significant investments
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Our audit procedures included the following:
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in subsidiaries as at March 31, 2025. These
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We obtained an understanding of the Company's policy on assessment
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investments are accounted for at cost
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of impairment of investment in subsidiaries and assumptions used by the
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less allowance for impairment, if any. The
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management including design and implementation of relevant controls. We
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management assesses at least annually the
existence of impairment indicators of each
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have tested the design and operating effectiveness of these controls.
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shareholding in such subsidiaries by reference
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We compared the carrying values of the Company's investment in these
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to the requirements under Ind AS 36. If such
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subsidiaries with their respective net worth as per audited financial statements.
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indicator exists, impairment loss is determined
and recognized in the standalone Ind AS financial
statements in accordance with the accounting
policies.
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We have evaluated the valuation model used by the Company's management
/ valuation experts of the management. We assessed the competencies,
capabilities and objectivity of the management's expert.
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During the year impairment indicators were
identified for certain material investments. The
processes and methodologies for assessing and
determining the recoverable amount of such
investments are based on complex assumptions
and require use of significant management's
judgment, in particular with reference to forecast
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We involved valuation specialists to evaluate methodology, assumptions and
estimates used in the calculations. We considered potential changes in key
drivers as compared to previous year / actual performance with management
to evaluate whether the inputs and assumptions used in the cash flow forecasts
were appropriate. We also assessed the assumptions around the key drivers of
the cash flow forecasts including discount rates, expected growth rates and
terminal growth rates used.
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of future cash flows relating to the period
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We assessed the recoverable value by performing sensitivity testing of key
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covered by the Company's strategic business
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assumptions used, analysed and examined the business plans approved
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plan, normalized cash flows assumed as a basis
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along with assumptions and estimates used by management and tested the
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for terminal value, as well as the long-term
growth rates and discount rates applied to such
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arithmetical accuracy of these models.
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forecasted cash flows.
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We assessed the disclosure is in accordance with applicable accounting
standards in the standalone Ind AS financial statements of the Company.
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Considering the significant level of judgment
required in estimating the cash flows and the
complexity of the assumptions used, this matter
has been identified as a key audit matter.
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We have determined that there are no other key audit matters to communicate in our report.
Other Information
The Company's Board of Directors is responsible for the other
information. The other information comprises the information
included in the Annual report, but does not include the
standalone Ind AS 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 Ind AS 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 Ind AS financial
statements, our responsibility is to read the other information
and, in doing so, consider whether such other information is
materially inconsistent with the standalone Ind AS 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.
Responsibilities of Management and Those Charged
with Governance for the Standalone Ind AS 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 Ind AS financial statements that give a true
and fair view of the financial position, financial performance
including other comprehensive income, cash flows and changes
in equity 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 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 the 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 Ind AS 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 Ind AS 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.
Those Charged with Governance are also responsible for
overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone
Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about
whether the standalone Ind AS 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 Ind AS 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 Ind AS 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 standalone Ind AS 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 auditor's
report to the related disclosures in the standalone Ind AS
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 Ind AS financial statements, including the
disclosures, and whether the standalone Ind AS financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.
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 Ind AS financial
statements for the financial year ended March 31, 2025 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 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 the "Annexure 1" a statement on the matters
specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, 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 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 for the matters
stated in the paragraph i (vi) below on reporting under
Rule 11(g);
(c) The Balance Sheet, the Statement of Profit and Loss
including the Statement of Other Comprehensive Income,
the Cash Flow Statement and Statement of Changes in
Equity dealt with by this Report are in agreement with the
books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial
statements comply with the Accounting Standards
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) The modification relating to the maintenance of accounts
and other matters connected therewith are as stated in
paragraph (b) above on reporting under Section 143(3)(b)
and paragraph (i (vi)) below on reporting under Rule 11(g);
(g) With respect to the adequacy of the internal financial
controls with reference to these standalone Ind AS
financial statements and the operating effectiveness of
such controls, refer to our separate Report in "Annexure
2" to this Report;
(h) In our opinion, the managerial remuneration for the year
ended March 31, 2025 has been paid / provided by the
Company to its directors in accordance with the provisions
of section 197 read with Schedule V to the Act.
(i) 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 has disclosed the impact of pending
litigations on its financial position in its standalone
Ind AS financial statements - Refer note 45(b) to the
standalone Ind AS financial statements;
ii. The Company has made provision, as required
under the applicable law or accounting standards,
for material foreseeable losses, if any, on long-term
contracts including derivative contracts - Refer note
15 and note 22 to the standalone Ind AS financial
statements;
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, other than as
disclosed in the note 46(e) to the standalone
Ind AS financial statements, 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, 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;
b) The management has represented that, to the
best of its knowledge and belief, other than as
disclosed in the note 46(e) to the standalone
Ind AS financial statements, 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, 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
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 (a)
and (b) contain any material misstatement.
v. The final 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.
As stated in note 18 to the standalone financial
statements, the Board of Directors of the Company
have proposed final dividend for the year which
is subject to the approval of the members at the
ensuing Annual General Meeting. The dividend
declared is in accordance with section 123 of the Act
to the extent it applies to declaration of dividend.
vi. Based on our examination which included test
checks, the Company has used accounting software
for maintaining its books of account which has a
feature of recording audit trail (edit log) facility and
the same has operated throughout the year for all
relevant transactions recorded in the software except
that, audit trail feature is not enabled for changes,
if any, made using certain administrative access
rights to the application and underlying database
as described in note 58 to the standalone Ind AS
financial statements. Further, 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 where the audit trail has
been enabled. Additionally, the audit trail has been
preserved by the Company as per the statutory
requirements for record retention to the extent it
was enabled and recorded in the respective year.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Huzefa Ginwala
Partner
Membership Number: 111757
UDIN: 25111757BMIWIJ2579
Place of Signature: Pune
Date: July 25, 2025
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