We have audited the accompanying Standalone Financial Statements of IP RINGS LIMITED (“the Company”), whichcomprise the Standalone Balance Sheet as at March 31, 2025, the Standalone Statement of Profit and Loss (includingOther Comprehensive Income), Standalone Statement of Changes in Equity and Standalone Statement of Cash flowsfor the year then ended, and a summary of the material accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaidStandalone Financial Statements give the information required by the Companies Act 2013 ('the Act”) in the mannerso required and give a true and fair view in conformity with the Indian Accounting Standards prescribed underSection 133 of the Act read with the 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, the loss and total comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards arefurther described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute ofChartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act, and the Rules thereunder, and we have fulfilledour other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on thestandalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit ofthe standalone financial statements of the current period. These matters were addressed in the context of our auditof the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide aseparate opinion on these matters. We have determined the matters described below to be the key audit matters tobe communicated in our report.
Key Audit Matter Description
Response to Key Audit Matter
Revenue Recognition
Reference may be made to Note 57B(10) of materialaccounting policies and Note 22 and 29 to the standalonefinancial statements of the Company.
Revenue recognition is inherently an area of audit risk,which we have focused on mainly covering the aspectsof cut off.
Principal Audit Procedures
Our audit procedures relating to revenue comprised oftest of controls and substantive procedures includingthe following:
i. We performed procedures to assess the design andinternal controls established by the managementand tested the operating effectiveness of relevantcontrols related to the recognition of revenue.
Considering the above, impact of Ind AS 115 and cut-offare considered by us as key audit matters.
ii. Selected a sample of continuing and newcontracts, and tested the operating effectivenessof the internal control, relating to identificationof the distinct performance obligations anddetermination of transaction price. We carried outa combination of procedures involving enquiryand observation, reperformance and inspection ofevidence in respect of operation of these controls.
iii. We have tested, on a sample basis, whether specificrevenue transactions around the reporting datehas been recognised in the appropriate period bycomparing the transactions selected with relevantunderlying documentation, including goodsdelivery notes, customer acknowledgement/proofof acceptance and the terms of sales.
iv. We have also validated subsequent credit notesand sales returns up to the date of this Report toensure the appropriateness and accuracy of therevenue recognition.
v. We tested journal entries on a sample basis toidentify any unusual or irregular items.
vi. We also considered the adequacy of the disclosuresin Company’s financial statements in relationto Ind AS 115 and were satisfied they meet thedisclosure requirements.
Conclusion
Based on the procedures performed above, we did notfind any material exceptions with regards to timing ofrevenue recognition and disclosure requirement of IndAS 115 in the financial statements.
Impairment in Trade Receivables
Reference may be made to Note 5 to the standalonefinancial statements of the Company.
The Company is exposed to potential risk of financialloss when there is the risk of default on receivables fromthe customers for which the Management would makespecific provision against individual balances withreference to the recoverable amount. Such provision/allowance for credit losses is based on historicalexperience adjusted to reflect current and estimatedfuture economic conditions.
We have performed the following procedures in relationto the recoverability of trade receivables and computingallowance for credit losses:
• Tested the effectiveness of the control over themethodology for computing the allowance forcredit losses, including consideration of theeconomic conditions and completeness andaccuracy of information used in the estimation ofprobability of default. Tested the accuracy of agingof trade receivables at year end on a sample basis.
• Obtained a list of outstanding receivables andidentified any debtors with financial difficultythrough discussion with management.
For the purpose of impairment assessment, significantjudgements and assumptions, including the credit risksof customers, the timing and amount of realization ofthese receivables, are required for the identificationof impairment events and the determination of theimpairment charge.
In view of the above, we identified allowance for creditlosses as a key audit matter since significant judgementis exercised in calculating the expected credit losses/impairment charge.
• Assessed the recoverability of the unsettledreceivables on a sample basis through ourevaluation of management’s assessment withreference to the credit profile of the customers,historical payment pattern of customers, publiclyavailable information and latest correspondencewith customers and to consider if any additionalprovision should be made;
• Tested subsequent settlement of trade receivablesafter the balance sheet date on a sample basis.
Based on the above procedures we found the keyjudgements and assumptions used by managementin the recoverability assessment of trade receivablesto be supportable based on the available evidenceand consequently are satisfied on the sufficiency ofprovisions/allowance for credit losses.
Allowance for inventory obsolescence
Refer to Note 4 of the standalone financial statements.
The Company holds significant inventories and recordsallowance for identified and estimated inventoryobsolescence.
As at 31st March 2025, the Company had inventories ofRs. 5,343.07 lakhs.
The Company provides for obsolescence of Inventoryconsidering the inventory on hand, existing/probablecustomer orders, the production plan, expectedutilisation in production and expected sales. Furtherthe estimates are validated by technological changes/legislative changes in the auto business and trends ofthe obsolescence in the past. The obsolescence coversinventory under Raw material, work-in-progress,and finished goods. Given the significant judgmentinvolved in management’s assessment, the allowancefor inventory obsolescence is identified as a key auditmatter
Our audit procedures in respect of this matterincluded:
Understood management policy and process foridentification of providing of obsolete inventory,including performing testing of controls to assess theeffectiveness of the same. Reviewed the management’sjudgement applied in calculating the value of inventoryobsolescence, taking into consideration the expectedchanges in auto industry and management assessmentof the present and future condition of the inventory.Assessed the adequacy of the relevant disclosure in thenotes to the financial statements
Based on the above procedures performed, weconsider the provision for inventory obsolescence to bereasonable.
The Company’s Board of Directors is responsible for the preparation of other information in their Report tomembers, etc. The other information comprises the information included in the Annual report but does not includethe consolidated financial statements, standalone financial statements and our auditor’s report thereon. The annualreport is expected to be made available to us after the date of this auditors’ report.
Our opinion on the standalone financial statements does not cover the other information and we do not express anyform of assurance conclusion thereon.
In connection with our audit or the standalone financial statements, our responsibility is to read the other informationidentified above when it becomes available and, in doing so, consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appearsto be materially misstated. When we read the annual report, if we conclude that there is a material misstatementtherein, we are required to communicate the matter to those charged with governance and take appropriate actionas applicable under the relevant laws and regulations.
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act,2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fairview of the financial position, financial performance, total comprehensive income, changes in equity and cashflows 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 provisionsof the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; making judgments and estimates thatare 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 tothe preparation and presentation of the standalone financial statements that give a true and fair view and are freefrom material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company’s ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to cease operations, or has norealistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includesour opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraudor error and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence 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 skepticismthroughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that issufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatementresulting 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 areappropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsiblefor expressing our opinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based onthe audit evidence obtained, whether a material uncertainty exists related to events or conditions that maycast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in thestandalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor’s report. However, future events orconditions 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 thedisclosures, and whether the standalone financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or inaggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalonefinancial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identifiedmisstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and other matters that mayreasonably 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 ofmost significance in the audit of the standalone financial statements of the current period and are therefore thekey audit matters. We describe these matters in our auditor’s report unless law or regulation precludes publicdisclosure about the matter or when, in extremely rare circumstances, we determine that a matter should notbe communicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
1. As required by Section143 (3) of the Companies Act, 2013, 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 andbelief 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 itappears from our examination of those books, except for the matters stated in paragraph 1(i)(vi) belowon reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
c. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss including other Comprehensiveincome, the Standalone Statement of Cash Flows and the Standalone Statement of Changes in Equity dealtwith by this report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standardsprescribed under Section 133 of the Act read with the relevant rules issued thereunder.
e. On the basis of the written representations received from the directors as on March 31, 2025 taken onrecord by the Board of Directors, none of the directors is disqualified as on March 31,2025 from beingappointed as a director in terms of Section164(2) of the Companies Act, 2013.
f. The modifications relating to the maintenance of accounts and other matters connected therewith are asstated in the paragraph 1(b) above on reporting under Section 143(3)(b) of the Act and paragraph 1(i)(vi)below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
g. With respect to the adequacy of the Internal Financial Controls with reference to the financial statementsof 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 thecompany’s internal financial controls with reference to the financial statements.
h. With respect to the other matters to be included in the Auditor’s Report in accordance with therequirements of Section 197(16) of the Act, as amended in our opinion and to the best of our informationand according to the explanations given to us, remuneration paid by the company to its directors duringthe year is in compliance with the provisions of Section 197, read with Schedule V of the Act.
i. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11of the Companies (Audit and Auditor’s) Rules, 2014, as amended, in our opinion and to the best of ourinformation and according to the explanation given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its StandaloneFinancial Statements. (Refer Note 30)
ii. The company did not have any long-term contracts including derivative contracts for which therewere any material foreseeable losses as at March 31,2025.
iii. There were no amount which were required to be transferred to the Investor Education andProtection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief, as disclosed in
the Note 49 to the accounts, no funds have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kind of funds) by the Company toor in any other persons or entities, including foreign entities (“Intermediaries”), with theunderstanding, whether recorded in writing or otherwise, that the Intermediary shall, directlyor indirectly lend or invest in other persons or entities identified in any manner whatsoever byor on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or thelike on behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of its knowledge and belief, as disclosed inthe Note 49 to the accounts, no funds have been received by the Company from any personsor entities, including foreign entities (“Funding Parties”), with the understanding, whetherrecorded in writing or otherwise, that the Company shall, directly or indirectly, lend or investin other persons or entities identified in any manner whatsoever by or on behalf of the FundingParty (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of theUltimate Beneficiaries.
(c) Based on the audit procedures that have been considered reasonable and appropriate inthe circumstances, nothing has come to our notice that has caused us to believe that therepresentations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above,contain any material mis-statement.
v. There was no dividend declared / paid during the year by the company.\
vi. Based on our examination which included test checks, except for the instance mentioned below, theCompany has used accounting software for maintaining its books of account, which have a feature ofrecording audit trail (edit log) facility and the same has operated throughout the year for all relevanttransactions recorded in the software:
- The feature of recording audit trail (edit log) facility was enabled at the database level to log anydirect data changes to the accounting software only from May’2024.
Further, for the periods where audit trail (edit log) facility was enabled and operated throughout theyear for the respective accounting software, we did not come across any instance of the audit trailfeature being tampered with and Additionally, except where the audit trail (edit log) facility was notenabled at the database level in the previous year, the audit trail has been preserved by the Companyas per the statutory requirements for 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 paragraphs3 and 4 of the Order.
For M.S.Krishnaswami & Rajan
Chartered AccountantsRegistration No. 01554S
M.S. Murali
Partner
Membership No. 26453UDIN: 25026453BMFXXI5549May 29,2025Chennai