We have audited the accompanying financial statements of Phyto Chem (India) Limited (‘the Company'),which comprise the Balance Sheet as at 31 March, 2025, the Statement of Profit and Loss (including OtherComprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the yearthen ended, and notes forming part of financial statements, including a summary of Material AccountingPolicies and other explanatory information (hereinafter referred to as ‘the financial statements').In our opinion and to the best of our information and according to the explanations given to us, theaforesaid financial statements give the information required by the Companies Act, 2013 (‘the Act') in themanner so required and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 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 ofaffairs of the Company as at 31 March, 2025 and its profit, total comprehensive income, changes in equityand its cash flows for the year ended on that date.
Basis for opinion
We conducted our audit of the 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 describedin the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilledour other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the financial statements.
Key audit matters
Key audit matters (‘KAM') are those matters that, in our professional judgement, were of most significancein our audit of the financial statements of the current period. These matters were addressed in the contextof our audit of the financial statements as a whole and informing our opinion thereon, and we do notprovide a separate opinion on these matters. We have determined the matters described below to be thekey audit matters to be communicated in our report.
S. No.
Key Audit Matter
Auditor’s Response
1
Timing of revenue recognition in theproper period as per Ind AS 115.
Refer to Note-2.18 (Material AccountingPolicies on Revenue Recognition).
In accordance with Ind AS 115, Revenue fromContracts with Customers, revenue fromsale of goods is recognized when control ofthe products being sold is transferred to thecustomer based on terms of sale. Revenueis measured at consideration to which anentity expects to be entitled in exchange fortransferring promised goods or services to
Our audit procedures included the following:
i. We evaluated the design and tested operatingeffectiveness of the relevant controls withrespect to revenue recognition including thoserelating to cut off at year end;
ii. We assessed the appropriateness of the revenuerecognition accounting policies in line with IndAS 115 “Revenue from Contracts withCustomers”;
iii. We performed substantive testing of revenuetransactions, recorded during the year by testingthe underlying documents which included
S. No
a customer, excluding amounts collected onbehalf of third parties. The transaction priceof the goods sold is net of variableconsideration on account of variousdiscounts offered by the Company as partof contract.
We identified timing of revenue recognitionin the proper period as a key audit mattersince it involves higher assessed risk ofmaterial misstatement and is required to berecognized as per the requirements ofapplicable accounting framework.
customer order and directions, goods dispatchnotes, shipping documents and customeracknowledgments as applicable;
iv. We tested a sample of manual journal entriesposted to revenue and assessed theirappropriateness;
v. We tested, on a sample basis, specific revenuetransactions recorded before and after thefinancial year end date including examinationof credit notes issued after the year end todetermine whether the revenue has beenrecognized in the appropriate financial period.Based on the above stated procedures, nosignificant exceptions were noted in revenuerecognition.
2
Trade Receivables:
The trade receivables stands at Rs.1,424.64lakhs which constitutes 101.19% of totalturnover for the financial year 2024-25.
This indicates a very low average collectionperiod of trade receivables, and the ageprofile of the trade receivables indicates that59.11% of trade receivables are over duesare in the age-wise bucket of 6 months to 36months.
Against the outstanding trade receivables,the Company made a provision for doubtfuldebts at (ECL) Rs.10.71 lakhs.
The Company considered current andanticipated future economic conditionsrelating to industries the Company deals withand the areas where it operates, incalculating expected credit losses, theCompany also considered credit reports andother related credit information for itscustomers to estimates the probability ofdefault in future.
The estimation of realisable debts involvessignificant management judgements. Sinceamount involved is material and significantmanagement judgement, we consider this asone of the key audit matters.
Our audit approach consisted testing of the designand operating effectiveness of the internalcontrols and substantive testing as follows:
We have evaluated the methodology for age-wisebucketing of trade receivables and keyassumptions underlying the probability of defaultestimates on the same, to ascertain that the samewere broadly in-line with the Corporation'shistorical default rates.
We tested the effectiveness of controls over the(1) development of the methodology for theallowance for credit losses, includingconsideration of the current and estimated futureeconomic conditions, (2) completeness andaccuracy of information used in the estimation ofprobability of default, and (3) computation of theallowance for credit losses.
For a sample of customers we tested the inputdata such as credit reports and other credit relatedinformation used in estimating the probability ofdefault by comparing them to external and internalsources of information.
We evaluated the incorporation of the applicableassumptions into the estimate of expected creditlosses and tested the mathematical accuracy andcomputation of the allowances by using the sameinput data used by the Company.
The Company's management and Board of Directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the Management Discussion andAnalysis, Board's Report including Annexures to Board's Report, Business Responsibility and sustainableReport, Corporate Governance and Shareholder's information, but does not include the consolidatedfinancial statements and financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not express anyform of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other informationand, in doing so, consider whether the other information is materially inconsistent with the financialstatements, or our knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report in this regard.
The Company's management and Board of Directors are responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that give a true and fairview of the financial position, financial performance, including other comprehensive income, changes inequity and cash flows of the Company in accordance with the Indian Accounting Standard (‘Ind AS') andother accounting principle generally accepted in India, including Ind AS specified under section 133 of theAct. This responsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accounting policies; makingjudgements and estimates that are reasonable and prudent; and design, implementation and maintenanceof adequate internal financial controls, that were operating effectively for ensuring the accuracy andcompleteness of the accounting records, relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement, whether due to fraudor error.
In preparing the 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 thegoing concern basis of accounting unless management and Board of Directors either intends to liquidatethe Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors of the Company are responsible for overseeing the Company's financial reportingprocess.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor's report thatincludes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that anaudit 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 ofthese financial statements.
As part of an audit in accordance with SAs, we exercise professional judgement and maintain professionalskepticism throughout the audit. We also:
* Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detectinga material misstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
* Obtain an understanding of internal financial controls relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible forexpressing our opinion on whether the Company has adequate internal financial controls with referenceto financial statements in place and the operating effectiveness of such controls.
* Evaluate the appropriateness of accounting policies used and reasonableness of accounting estimatesand 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 orconditions that may cast significant doubt on the Company's ability to continue as a going concern. Ifwe conclude that a material uncertainty exists, we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourAuditor's Report. However, future events or conditions may cause the Company to cease to continueas a going concern.
* Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Financial Statements that, individually or in aggregate,makes it probable that the economic decisions of a reasonably knowledgeable user of the FinancialStatements 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 anyidentified misstatements in the Financial Statements.
We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies in internalcontrol that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.
From the matters communicated with those charged with governance, we determine those matters thatwere of most significance in the audit of the financial statements of the current period and are thereforethe key audit matters. We describe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when, in extremely rare circumstances, we determine that a mattershould not be communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2020 (‘the Order') issued by the Central Governmentof India in terms of sub-section (11) of section 143 of the Act, we give in ‘Annexure-A' a statement on thematters specified in paragraphs iii and iv of the Order.
a. We have sought and obtained all the information and explanations which to the best of ourknowledge 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 Companyso far as it appears from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income,the Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Reportare in agreement with the relevant books of account.
d. In our opinion, the aforesaid financial statements comply with the Ind AS specified undersection 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 onMarch 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 controls over financial reporting of the Companyand the operating effectiveness of such controls, refer to our separate Report in ‘Annexure-B'. Our report expresses an unmodified opinion on the adequacy and the operatingeffectiveness of the Company's internal financial controls with reference to FinancialStatements.
g. With respect to other matters to be included in the Auditors Report in accordance withrequirements of section 197(6) of the Act, as amended:
In our opinion and to the best of our information and according to the explanation given to us,the remuneration paid by the Company to its directors during the year is within the limitsprescribed as per 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 withRule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion andto 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 itsfinancial statements. Refer note.38 to the Financial Statements.
ii. The Company has made provision, as required under the applicable law or accountingstandards, for material foreseeable losses, if any, on long-term contracts (includingderivative contracts).
iii. There has been no delay in transferring amounts, required to be transferred, to theInvestor Education and Protection Fund by the Company.
iv.
a. The Management has represented that, to the best of its knowledge and belief, nofunds (which are material either individually or in the aggregate) have been advancedor loaned or invested (either from borrowed funds or share premium or any othersources or kind of funds) by the Company to or in any other person or entity,including foreign entity (“Intermediaries”), with the understanding, whether recordedin writing or otherwise, that the Intermediary shall, whether, directly or indirectly lendor invest in other persons or entities identified in any manner whatsoever by or onbehalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, securityor the like on behalf of the Ultimate Beneficiaries;
b. The Management has represented, that, to the best of its knowledge and belief, nofunds (which are material either individually or in the aggregate) have been receivedby the Company from any person or entity, including foreign entity (“Funding Parties”),with the understanding, whether recorded in writing or otherwise, that the Companyshall, whether, directly or indirectly, lend or invest in other persons or entities identifiedin any manner whatsoever by or on behalf of the Funding Party (“UltimateBeneficiaries”) or provide any guarantee, security or the like on behalf of the UltimateBeneficiaries;
c. Based on the audit procedures that have been considered reasonable and appropriatein the circumstances, nothing has come to our notice that has caused us to believethat the representations under sub-clause (i) and (ii) of Rule 11(e), as providedunder (a) and (b) above, contain any material misstatement.
v. No dividend is declared or paid during the year by the Company and accordingly,compliance with section 123 of the Act is not applicable to the Company.
vi. The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 isapplicable from 1 April 2023.
Based on our examination which included test checks, the Company has used accountingsoftware for maintaining its books of account, which have a feature of recording audittrail (edit log) facility and the same has operated throughout the year for all relevanttransactions recorded in the respective software. Further, we did not come across anyinstance of the audit trail feature being tampered with.
Chartered AccountantsFirm Regn. No. 000041S
Place : Hyderabad Partner, M.N°.25266
Date : 26*h May 2025 ICAI UDIN: 25025266BMHWU5886