Sr. No. Key Audit Matter
Auditor's Response
1 Accuracy, Completeness, and disclosure with reference
Our audit procedures, amongst others, include the following -
to Ind AS-16 of Property, Plant and Equipment (includingCapital Work-in-Progress
a)
Obtaining an understanding of operating effectiveness ofmanagement’s internal control over capital expenditure.
The carrying value of property, plant and equipment(including capital work in progress) as on 31 March 2025
b)
We assessed Company’s process regarding maintenance of
of H7,506.28 Crores (as on 31 March 2024 of H6,597.52
records, valuation and accounting of transactions pertaining
Crores) includes H1,124.12 Crores capitalised /transferred
to Property, Plant and Equipment including Capital Work in
from capital work in progress during the year (H1,174.99Crores for FY 2024).
Progress with reference to Indian Accounting Standard 16:Property, Plant and Equipment.
Cost Recognition of Property, Plant and Equipment as
c)
We have reviewed management judgment pertaining to
specified in Ind AS 16 is based on completion of asset
estimation of useful life and depreciation of the Property,
construction activities and management assessment and
Plant and Equipment as well as its assessment that the
judgement that the asset is capable of operating in the
asset is ready for its intended use.
manner intended.
e)
We have verified the capitalization of borrowing cost
The asset capitalisation is the outcome of various
incurred on qualifying asset in accordance with the Indian
procurements, approvals from operations experts in
Accounting Standard 23: Borrowing Costs.
the Company and judgements by the management and
d)
Ensuring adequacy of disclosures in the standalone financial
therefore, required significant audit attention.
statements.
Refer Note 3: Property, Plant and Equipment in Notes tothe standalone financial statements.
We have audited the accompanying standalone financialstatements of Aarti Industries Limited (the "Company”),which comprise the Balance Sheet as at 31 March 2025, theStatement of Profit and Loss (including the statement onOther Comprehensive Income), the Statement of Changesin Equity and the Statement of Cash Flows for the yearended on that date and notes to the financial statements(including summary of the material accounting policies andother explanatory information (hereinafter referred to as the"standalone financial statements”).
In our opinion and to the best of our information and accordingto the explanations given to us, the aforesaid standalonefinancial statements give the information required by theCompanies Act, 2013 (the "Act”) in the manner so requiredand give a true and fair view in conformity with the IndianAccounting Standards prescribed under section 133 of theAct read with the Companies (Indian Accounting Standards)Rules, 2015, as amended, ("Ind AS”) and other accountingprinciples generally accepted in India, of the state of affairsof the Company as at 31 March 2025 and its profit, and totalcomprehensive income, changes in equity and its cash flowsfor the year ended on that date.
We conducted our audit of the standalone financialstatements in accordance with the Standards on Auditing("SA”s) specified under section 143(10) of the Act. Ourresponsibilities under those standards are further describedin the Auditor's Responsibilities for the audit of thestandalone financial statements section of our report. We areindependent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants ofIndia ("ICAI”) together with the independence requirementsthat are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rulesmade thereunder, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements andthe ICAI's Code of Ethics. We believe that the audit evidenceobtained by us is sufficient and appropriate to provide a basisfor our audit opinion on the standalone financial statements.
Key audit matters are those matters that, in our professionaljudgment, were of most significance in our audit of thestandalone financial statements of the current period.These matters were addressed in the context of our auditof the standalone financial statements as a whole, andin forming our opinion thereon, and we do not provide aseparate opinion on these matters. We have determined thematters described below to be the key audit matters to becommunicated in our report.
The Company’s Board of Directors is responsible for thepreparation of the other information. The other informationcomprises information included in the ManagementDiscussion and Analysis, Board’s Report including annexuresthereto, Business Responsibility and Sustainability Report,Corporate Governance Report, and Shareholder Information,but does not include the standalone financial statementsand our auditor’s report thereon, which we expect to be madeavailable to us after the date of this auditor's report. Ouropinion on the standalone financial statements does notcover the other information, and we do not express any formof assurance conclusion thereon.
In connection with our audit of the standalone financialstatements, our responsibility is to read the other informationidentified above and, in doing so, consider whether the otherinformation is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit,or otherwise appears to be materially misstated.
If, based on the work we have performed on the otherinformation obtained prior to the date of this auditor’s report,we conclude that there is a material misstatement of thisother information, we are required to report that fact. Wehave nothing to report in this regard.
When we read the additional information mentioned abovethat will be included in the Annual Report, if we conclude thatthere is a material misstatement therein, we are required tocommunicate the matter to those charged with governanceand take appropriate action as applicable under the relevantlaws and regulations.
The Company's Board of Directors is responsible for thematters stated in section 134(5) of the Act with respect tothe preparation of these standalone financial statementsthat give a true and fair view of the financial position,financial performance, including other comprehensiveincome, changes in equity and cash flows of the Company inaccordance with the Ind AS and other accounting principlesgenerally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets ofthe Company and for preventing and detecting frauds andother irregularities; selection and application of appropriateaccounting policies; making judgements and estimates thatare reasonable and prudent; and design, implementation andmaintenance of adequate internal financial controls, thatwere operating effectively for ensuring the accuracy andcompleteness of the accounting records, relevant to thepreparation and presentation of the standalone financial
statements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.
In preparing the standalone financial statements,management is responsible for assessing the Company'sability to continue as a going concern, disclosing, asapplicable, matters related to going concern and using thegoing concern basis of accounting unless managementeither intends to liquidate the Company or to ceaseoperations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeingthe Company's financial reporting process.
Our objectives are to obtain reasonable assurance aboutwhether the standalone financial statements as a wholeare free from material misstatement, whether due to fraudor error, and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurancebut is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, theycould reasonably be expected to influence the economicdecisions of users taken on the basis of these standalonefinancial statements.
As part of an audit in accordance with SAs, we exerciseprofessional judgment and maintain professional scepticismthroughout the audit. We also:
• Identify and assess the risks of material misstatement ofthe standalone financial statements, whether due to fraudor error, design and perform audit procedures responsiveto those risks, and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraudmay involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial controlrelevant to the audit in order to design audit proceduresthat are appropriate in the circumstances. Under section143(3)(i) of the Act, we are also responsible for expressingour opinion on whether the Company has adequate internalfinancial controls with reference to standalone financialstatements in place and the operating effectiveness ofsuch controls.
• Evaluate the appropriateness of accounting policies usedand the reasonableness of accounting estimates andrelated disclosures made by the management.
• Conclude on the appropriateness of management's use ofthe going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty
exists related to events or conditions that may castsignificant doubt on the Company's ability to continueas a going concern. If we conclude that a materialuncertainty exists, we are required to draw attentionin our auditor's report to the related disclosures in thestandalone financial statements or, if such disclosuresare inadequate, to modify our opinion. Our conclusionsare based on the audit evidence obtained up to thedate of our auditor's report. However, future events orconditions may cause the Company to cease to continueas a going concern.
• Evaluate the overall presentation, structure and contentof the standalone financial statements, including thedisclosures, and whether the standalone financialstatements represent the underlying transactions andevents in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in thestandalone financial statements that, individually or inaggregate, makes it probable that the economic decisionsof a reasonably knowledgeable user of the standalone IndAS financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the resultsof our work; and (ii) to evaluate the effect of any identifiedmisstatements in the standalone financial statements.
We communicate with those charged with governanceregarding, among other matters, the planned scope andtiming of the audit and significant audit findings, includingany significant deficiencies in internal control that weidentify during our audit.
We also provide those charged with governance with astatement that we have complied with relevant ethicalrequirements regarding independence, and to communicatewith them all relationships and other matters that mayreasonably be thought to bear on our independence, andwhere applicable, related safeguards.
From the matters communicated with those charged withgovernance, we determine those matters that were ofmost significance in the audit of the standalone financialstatements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances,we determine that a matter should not be communicatedin our report because the adverse consequences of doingso would reasonably be expected to outweigh the publicinterest benefits of such communication.
1. As required by the Companies (Auditor's Report) Order,2020 (the "Order”) issued by the Central Government interms of Section 143(11) of the Act, we give in "AnnexureA” a statement on the matters specified in paragraphs3 and 4 of the Order.
2. As required by Section 143(3) of the Act, based on ouraudit we report that:
a) We have sought and obtained all the informationand explanations which to the best of ourknowledge and belief were necessary for thepurposes of our audit.
b) In our opinion, proper books of account as requiredby law have been kept by the Company so far asit appears from our examination of those books.Insofar as the modification on maintaining an audittrail in the accounting software is concerned, referparagraph (i) (vi) below;
c) The Balance Sheet, the Statement of Profit andLoss including Other Comprehensive Income,Statement of Changes in Equity and the Statementof Cash Flows dealt with by this Report are inagreement with the books of accounts.
d) In our opinion, the aforesaid financial statementscomply with the Ind AS specified under Section133 of the Act read with Rule 7 of the Companies(Accounts) Rules, 2014.
e) On the basis of the written representationsreceived from the directors taken on record bythe Board of Directors, none of the directors isdisqualified as on 31 March 2025 from beingappointed as a director in terms of Section 164(2)of the Act.
f) The modification arising from the maintenanceof the audit trail on the accounting software,comprising the application and database are asstated in the paragraph (i) (vi) below on reportingunder Rule 11(g);
g) With respect to the adequacy of the internalfinancial controls over financial reporting of theCompany and the operating effectiveness of suchcontrols, refer to our separate Report in "Annexure
B”. Our report expresses an unmodified opinionon the adequacy and operating effectiveness ofthe Company's internal financial controls withreference to standalone financial statements.
h) In our opinion and to the best of our informationand according to the explanations given to us,the remuneration paid by the Company to itsdirectors during the year is in accordance withthe provisions of Section 197 of the Act.
i) With respect to the other matters to be includedin the Auditor's Report in accordance with Rule11 of the Companies (Audit and Auditors) Rules,2014, as amended, in our opinion and to the best ofour information and according to the explanationsgiven to us:
i. The Company has disclosed the impact ofpending litigations on its financial positionin its standalone financial statements- Refer note 36 to the standalonefinancial statements.
ii. The Company did not have any long-termcontracts including derivative contractsfor which there were any materialforeseeable losses.
iii. There has been no delay in transferringamounts, required to be transferred, to theInvestor, Education and Protection Fund bythe Company.
iv. (a) The Management has represented
that, to the best of its knowledge andbelief as disclosed in note no 45(v) tothe standalone financial statements,no funds (which are material eitherindividually or in the aggregate) havebeen advanced or loaned or invested(either from borrowed funds or sharepremium or any other sources or kindof funds) by the Company to or inany other person or entity, includingforeign entity ("Intermediaries”),with the understanding, whetherrecorded in writing or otherwise,that the Intermediary shall, whether,directly or indirectly lend or invest inother persons or entities identified
in any manner whatsoever by or onbehalf of the Company ("UltimateBeneficiaries”) or provide anyguarantee, security or the like on behalfof the Ultimate Beneficiaries;
(b) The Management has represented,that, to the best of its knowledge andbelief, as disclosed in note no 45(vi) tothe standalone financial statements,no funds (which are material eitherindividually or in the aggregate) havebeen received by the Company fromany person or entity, including foreignentity ("Funding Parties”), with theunderstanding, whether recorded inwriting or otherwise, that the Companyshall, whether, directly or indirectly, lendor invest in other persons or entitiesidentified in any manner whatsoeverby or on behalf of the Funding Party("Ultimate Beneficiaries”) or provideany guarantee, security or the like onbehalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures thathave been considered reasonable andappropriate in the circumstances,nothing has come to our notice thathas caused us to believe that therepresentations under sub-clause(i) and (ii) of Rule 11(e), as providedunder (a) and (b) above, contain anymaterial misstatement.
v. As stated in note no 16.7 to the standalone
financial statements
(a) The final dividend proposed in theprevious year, declared and paid bythe Company during the year is inaccordance with Section 123 of the Act,as applicable.
(b) The Board of Directors of the Companyhave proposed final dividend for theyear which is subject to the approvalof the members at the ensuing AnnualGeneral Meeting. The amount ofdividend proposed is in accordance withsection 123 of the Act, as applicable.
vi. Based on our examination which includedtest checks, the Company has used theaccounting software for maintaining itsbooks of account which has a feature ofrecording audit trail (edit log) facility inrespect of the application and the samehas operated throughout the year for allrelevant transactions. We did not comeacross any instance of the audit trailfeature being tampered with in respect ofaccounting software. Normal/Regular usersare not granted direct database or super userlevel access.
However, unauthorised changes to thedatabase by a super user specifically doesnot carry the feature of a concurrent real timeaudit trail.
With the exception of audit trail functionalityat the database level as mentioned above,we confirm that the Company has preservedthe audit trail in accordance with statutoryrequirements for record retention.
For Gokhale & Sathe
Chartered Accountants
FRN:-103264W
Uday Girjapure
Partner
Membership No. 161776
UDIN: 25161776BMOHSE1701
Place: Mumbai
Date: May 8, 2025