We have audited the accompanying Standalone Financial Statements of Manali Petrochemicals Limited (“the
Company”), which comprise the Standalone Balance sheet as on 31st March 2025, the Standalone Statement of
Profit and Loss (Including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the
Standalone Statement of Cash Flows for the year then ended, and notes to the Standalone 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 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 including
Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015 as amended (“Ind AS”), of the state of affairs of the Company as on 31st March 2025, and its loss
(including other comprehensive loss), its 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 we have obtained is sufficient and
appropriate to provide a basis for our opinion on the Standalone Financial Statements.
Emphasis of Matter
Attention is invited to:
(a) Note No.53 to the Standalone Financial Statements explains that the lease period for the leasehold land on which
one of the Company's manufacturing units (Unit-II) operates expired on 30th June 2017. The Company has submitted
requests for renewal with the Government of Tamil Nadu (the Lessor) and is currently awaiting an extension of the
lease. Pending this renewal, no adjustments have been made in the Standalone Financial Statements for the year,
as any potential impact of non-renewal cannot be determined at this time. Furthermore, management remains
confident that the lease renewal will be granted in due course, based on this, the implementation of Ind AS 116
- Leases has been premised on a lease renewal period of 30 years, with current lease rent payments calculated
according to the latest demand up to 30th June, 2025.
(b) Note No. 54 to the Standalone Financial Statements outlines the impact of floods caused by Cyclone Michaung
on the production plants. The Company's claim for damages to Inventories and Property, Plant, and Equipment is
currently under assessment by the insurer. Pending this assessment, Property, Plant, and Equipment are carried at
book values. Further a sum of Rs. 1,870 Lakhs (net of Rs. 300 lakhs on-account payment received from the insurer)
incurred until 31st March 2025 for repairs and reinstatement of property, plant, and equipment, derecognition of
affected assets, and differential value of inventories (net of salvage value) arising from disposal of inventories is
treated as insurance claims receivable. Consequently, the overall implications that may arise upon the eventual
approval of the Company's claim by the insurer are currently unascertainable; hence, no adjustments have been
made in the Standalone Financial Statements.
Our opinion is not modified with respect to the above matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of the most significance in our audit of the
Standalone Financial Statements for the financial year ended 31st March 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 following matters as Key Audit Matters to be
communicated in our Report:
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Key Audit Matter
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Auditor’s Response
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Revenue is measured net of discounts given
to the customers on the Company's sales.
The estimation towards the measurement of
discounts given to its customers corresponding
to the sales made during the year is material and
is considered to be complex and judgmental.
This is an area of significant judgment and
with varying complexity, depending on nature
of arrangement which differs from customer to
customer.
Therefore, there is a risk of revenue being
misstated as a result of faulty estimations relating
to discounts to its customers
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Our audit procedures included the following:
(i) We have assessed the appropriateness of the Company's
Revenue recognition accounting policies, including those
relating to estimation of discounts given to its customers.
(ii) We have tested the effectiveness of the entity's internal
controls over calculation of discounts.
(iii) We have evaluated the documentation associated with the
transactions of sale including credit notes and appropriate
approvals for discounts offered to customers from the
samples selected, to determine whether revenue was
recognised net of discounts in the relevant reporting period.
The results of our tests are satisfactory and we considered the
estimate of the accrual relating to discounts, and the amount
of revenue recognised is found to be acceptable on comparing
current year discounts accruals to the prior year and, where
relevant, completing further inquiries and testing.
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2) Evaluation of Contingent Liabilities
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Key Audit Matter
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Auditor’s Response
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The Company has contingent liabilities
comprising claims against the company not
acknowledged as debts and demands from
various statutory authorities which are inherent
to the normal course of their business, filed by
third parties, former employees, and statutory
authorities.
In general, the settlement of these proceedings
takes a long time and involve not only discussions
on the matter itself, but also complex process-
related aspects, depending on the applicable
legislation.
Among other things, the aspects used to
establish the likelihood of a loss attributed to
each proceeding are subjective and the evolution
of the jurisprudence over these disputes are not
always uniform.
In certain litigation and regulatory matters
significant judgement is required by the
Management to determine if there is a present
obligation under relevant accounting standard.
The complex nature of the Regulations and
jurisprudence make this an ongoing area of
judgement, and taking into consideration
Management's judgement in assessing the
likelihood that the pending claim will succeed,
or a liability will arise, time period for resolution
have been a matter of significance during the
audit and the exposure of each case there is
a risk that such cases may not be adequately
provided for or disclosed in the Standalone
Financial Statements and hence considered as
a key audit matter.
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Our audit procedures included the following:
(i) We have evaluated and tested the procedures and controls
relating to the identification, recognition and measurement
of provisions for disputes and disclosures in relation to
matters concerning the contingent liabilities;
(ii) We have considered the list of various orders/notices/
demands received with respect to various litigations from
the management;
(iii) Reviewed the confirmations obtained by the Company from
their legal counsel / consultants on a sample basis and
also discussed and analysed material legal cases with the
Company's Legal department. We have also analysed the
responses obtained from the Company's legal advisors
who conduct the court cases, tax and administrative
proceedings, in which the status of the cases and possible/
expected manner of proceedings were described.
(iv) We held discussions with the Management to understand
their assessment of the quantification and likelihood of
significant exposures and the provision required for specific
cases;
(v) Assessed the objectivity and competence of the
Management and independence of the legal experts; and
(vi) Evaluated the Management's assumptions and estimates
relating to the recognition of the provisions for disputes
and disclosures of contingent liabilities in the Standalone
Financial Statements.
(vii) Assessed the adequacy of the disclosures with regard to
facts and circumstances of the legal and litigation matters.
Based on the procedures stated above we found that the criteria
and assumptions adopted by Management for determining the
provision for contingent liabilities, as well as the information
disclosed relating to contingent liabilities in the financial
statements, are appropriate.
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Other Information
The Company's Board of Directors is responsible for the
preparation of the other information. The other information
comprises the information included in the Company's
Annual Report, but does not include the Standalone
Financial Statements and our auditor's report thereon.
The above reports are expected to be made available to us
after the date of the auditor's report thus, our report does
not deal with matters mentioned under other information
in the Annual Report.
Our opinion on the Standalone Financial Statements does
not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial
Statements, our responsibility is to read the other
information as identified above when made available
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.
When we read the above reports, if we conclude that
there is a material misstatement therein, we are required
to communicate the matter to those charged with
governance.
Management’s Responsibility 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 total comprehensive income,
changes in equity and cash flows of the Company in
accordance with the accounting principles generally
accepted in India, including the Ind AS 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; the selection
and application of appropriate accounting policies;
making judgments and the 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 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, Board
of Directors is responsible for assessing the Company's
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless management
either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Board of Directors 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 aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
a. Identify and assess the risks of material
misstatement of the 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.
b. 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 Financial Statements in place and the
operating effectiveness of such controls.
c. Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting
estimates and related disclosures made by
management.
d. 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.
e. Evaluate the overall presentation, structure and
content of the financial statements, including the
disclosures, and whether the 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 utmost significance in the audit of the Standalone
Financial Statements for the financial year ended 31st
March 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 A” 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 of the aforesaid
Standalone Financial Statements.
b. In our opinion, proper books of account as
required by law relating to preparation of the
aforesaid Standalone Financial Statements
have been kept by the Company so far as it
appears from our examination of those books.
c. The Standalone Balance Sheet, the Standalone
Statement of Profit and Loss (including Other
Comprehensive Income), the Statement of
Changes in Equity and the Statement of
Cash Flows dealt with by this Report are in
agreement with the books of accounts.
d. In our opinion, the aforesaid Standalone
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 31st March
2025, taken on record by the Board of
Directors, none of the directors is disqualified
as on 31st March 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 B” to this
report.
3. With respect to the other matters to be included in
the Auditor's Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014
as amended, in our opinion and to the best of our
information and according to the explanations given
to us:
a. The Company has disclosed the impact of
pending litigations on its financial position
in Note 41 (i) to the Standalone Financial
Statements.
b. The Company did not have any long-term
contracts, including derivative contracts, for
which there were any material foreseeable
losses.
c. There has been no delay in transferring
amounts required to be transferred to the
Investor Education and Protection Fund by the
Company
d. (i) The management has represented that, to
the best of its knowledge and belief, other
than those disclosed in note No 44 & 52(vii)
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.
(ii) 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 Party or provide
any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.
(iii) Based on such 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
subclause (i) and (ii) of Rule 11(e), as
provided under (i) and (ii) above, contain
any material misstatement.
e. The final dividend paid by the Company during
the year in respect of the same declared for
the previous year is in accordance with the
provisions of Section 123 of the Act.
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
proposed is in accordance with Section 123 of
the Act to the extent it applies to the declaration
of dividend.
f. 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 and the same has operated
throughout the year for all relevant transactions
recorded in the software. 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 trail has been
preserved by the Company as per the statutory
requirements for record retention.
4. 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. The remuneration paid to
any director is not in excess of the limit laid down
under section 197(16), which are required to be
commented upon by us.
For Brahmayya & Co.,
Chartered Accountants
FRN: 000511S
Lokesh Vasudevan
Partner
Place: Gurgaon Membership No: 222320
Date: 13th May 2025 UDIN: 25222320BMIKUV5612
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