We have audited the accompanying Standalone Financial Statements
of IOL Chemicals and Pharmaceuticals Limited ("the Company")
(CIN:L24116PB1986PLC007030), 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 for the year ended on that date, and
notes to the Financial Statements, including 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
("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, ("Ind AS") and other accounting principles
generally accepted in India, of the state of affairs of the Company
as at March 31, 2025 and its profit, 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 (SAs). 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 of the current period. These matters were addressed in the
context of our audit of the Standalone Financial Statements as a whole,
and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. 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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Revenue recognition:
Refer note 2(i)(v) and note 25 of the Standalone Financial
Statements. The Company's sales revenue mainly arose from
sale of Bulk Drugs and Chemical products. The Company
recognizes sales revenue based on the terms and conditions
of transactions, which vary with different customers. For sales
transactions in a certain period around balance sheet date, it
is essential to ensure whether the transfer of control of the
goods by the Company to the customer occurs before the
balance sheet date or otherwise. Considering that there is
significant volume of sales transactions close to the year end,
involving material amounts and such revenue recognition
is subject to whether transfer of control to the customers
has occurred before the balance sheet date or otherwise,
we consider the risk of revenue from sale of goods being
recognised in the incorrect period, a key audit matter.
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Principal Audit Procedures:
• We evaluated the design of internal controls over recognition
of revenue in the appropriate period in accordance with the
Company's accounting policy. On a sample basis, we tested
the operating effectiveness of the internal control relating to
determination of point in time at which the transfer of control of
the goods occurs.
• We tested the relevant information technology systems used
in recording revenue including Company's system generated
reports, based on which selection of samples was undertaken.
• On sample basis, we performed test of details of sales recorded
close to the year-end through following procedures:
i. Analysed the terms and conditions of the underlying
contract with the customer, and
ii. Verified evidence for transfer of control of the goods prior
to the balance sheet date or otherwise from relevant
supporting documents.
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2.
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Property, Plant and Equipment:
Refer note 3 of the Standalone Financial Statements.
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Principal Audit Procedures:
• Understood, evaluated and tested the design and operating
effectiveness of key controls relating to capitalisation of various
costs incurred, in relation to Buildings, Plant and Machinery and
Capital work-in-progress.
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S.no. Key Audit Matter
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Auditors' Response
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During the year, the company has incurred substantial capital
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• Tested the direct and indirect costs capitalised, on a sample
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expenditure on Property, Plant and Equipment and Capital
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basis, with the underlying supporting documents to ascertain
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work in progress towards assets under construction/ erection
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the nature of costs and the basis for allocation, where applicable,
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and expansion.
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and evaluated whether they meet the recognition criteria
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With regard to capitalisation of Plant and Machinery,
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provided in the Ind AS 16, Property, Plant and Equipment.
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Buildings and Capital work in progress, Management has
identified specific expenditure including employee costs and
other specific overheads relating to each of the assets and has
applied judgement to assess if the costs incurred in relation to
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• Tested, on a sample basis, the appropriateness of employee
costs capitalised in relation to Plant and Machinery and
Buildings based on verification of their payroll data etc.
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these assets meet the recognition criteria on Property, Plant
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• Tested other costs debited to Standalone Statement of Profit
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and Equipment in accordance with Ind AS 16.
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and Loss, on a sample basis, to ascertain whether these meet
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This has been determined as a key audit matter due to the
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the criteria of capitalisation
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significance of the capital expenditure during the year and the
risk that the elements of costs that are eligible for capitalisation
are not appropriately capitalised or costs capitalised are not in
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• Assessed the adequacy of disclosures in the Standalone
Financial Statements.
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accordance with the recognition criteria provided in Ind AS 16.
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Our procedures did not identify, any costs that are eligible for
capitalisation are not appropriately capitalised or costs capitalised
are not in accordance with the recognition criteria provided in Ind
AS 16.
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Information Other than 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, Board's Report
including Annexures to Board's Report, Business Responsibility and
Sustainability Report, Corporate Governance and Shareholder's
Information, but does not include the Consolidated Financial
Statements, 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 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.
Responsibilities of Management and Those Charged
with Governance 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, including
other comprehensive income, changes in equity and cash flows of
the Company in accordance with the Ind AS and other accounting
principles generally accepted in India.This responsibility also includes
maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding 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
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 are 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.
As part of our 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
with reference to Standalone 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 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 Section 143(3) of the Act, based on our audit,
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 Balance Sheet, the Statement of Profit and Loss
including Other Comprehensive Income, Statement
of Changes in Equity and the Statement of Cash Flows
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 Ind AS 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 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 with reference to Standalone Financial
Statements of the Company and the operating
effectiveness of such controls, refer to our separate Report
in "Annexure A". Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of
the Company's internal financial controls with reference
to Standalone Financial Statements.
g) With respect to the other matters to be included in the
Auditor's 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 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
Financial Statements - Refer Note 35
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, if any, 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 (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;
(b) 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;
(c) 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 (a) and (b)
above, contain any material misstatement.
v. As stated in Note 2(i)(vi)(i) and note 14(b) to the
Standalone Financial Statements
(a) The interim dividend declared and paid by
the Company during the year and until the
date of this report is in compliance with
Section 123 of the Act.
vi. Based on our examination, which included
test checks, the Company has used accounting
softwares 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 softwares.
Further, during the course of our audit we did not
come across any instance of the audit trail feature
being tampered with and the audit trial has been
preserved by the company as per the statutory
requirements for the record retention.
2. As required by the Companies (Auditor's Report) Order, 2020
(the "Order") issued by the Central Government in terms of
Section 143(11) of the Act, we give in "Annexure B" a statement
on the matters specified in paragraphs 3 and 4 of the Order.
For and on behalf of
Ashwani & Associates
Chartered Accountants
Firm Registration Number: 000497N
by the hand of
Sd/-
Aditya Kumar
Partner
Place: Ludhiana Membership No.:506955
Dated: May 16th, 2025 UDIN:25506955BMMHWU5300
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