We have audited the standalone financial statements of
Rane (Madras) Limited (the "Company”) which comprise
the standalone balance sheet as at 31 March 2025, and the
standalone statement of profit and loss (including other
comprehensive income), standalone statement of changes
in equity and standalone statement of cash flows for the
year then ended, and notes to the standalone financial
statements, including 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 aforesaid
standalone financial statements give the information
required by the Companies Act, 2013 ("Act”) in the manner
so required and give a true and fair view in conformity with
the accounting principles generally accepted in India, of the
state of affairs of the Company as at 31 March 2025, and its
profit and other comprehensive income, changes in equity
and its cash flow for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards
on Auditing (SAs) specified under Section 143(10) of
the Act. Our responsibilities under those SAs 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 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.
Key Audit Matter(s)
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.
Revenue Recognition
See Note 23 to standalone financial statements
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The key audit matter
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How the matter was addressed in our audit
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Revenue recognition involves identification of contracts
with customers, identification of distinct performance
obligations, determination of transaction price and the
basis used to recognize revenue at a point in time. Revenue
is recognised when (or as) a performance obligation is
satisfied i.e. when 'control' of the goods underlying the
particular performance obligation is transferred to the
customer.
Revenue recognition has been identified as a key audit
matter because the Company and its external stakeholders
focus on revenue as a key performance metric. Therefore,
there may be a possibility for revenue to be overstated or
recognised before control has been transferred.
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In view of the significance of the matter, the following key
audit procedures were performed by us:
• Assessed the compliance of the Company's
revenue recognition accounting policies with
applicable accounting standards.
• Evaluated the design and implementation of the key
internal financial controls with respect to the revenue
recognition and tested the operating effectiveness of
such controls on a sample basis.
• Performed substantive testing of revenue transactions
recorded during the year on a sample basis by
verifying the underlying documents including
shipping document, customer acknowledgement,
dispatch notes, etc, as applicable.
• Performed testing for samples of revenue transactions
recorded closer to the year-end by verifying
underlying documents, to determine the accuracy of
the period in which revenue was recognized.
• Performed testing of non-standard journal entries
posted in revenue on a sample basis.
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Recognition and recoverability of deferred tax assets
See Note 22 to standalone financial statements
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The key audit matter
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How the matter was addressed in our audit
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The Company has recorded deferred tax assets
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In
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view of the significance of the matter, the following key
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on brought forward business losses, deductible
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audit procedures were performed by us:
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temporary differences, unabsorbed depreciation and
unused tax credits. As at March 31, 2025, the Company
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•
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Assessed the compliance of the Company's
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carries a deferred tax asset of INR 99.48 crores.
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accounting policies with applicable accounting
standards.
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The recognition and recoverability of these deferred tax
assets involves:
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•
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Evaluated the design and implementation of the
key internal financial controls with respect to the
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• assessment of the underlying tax laws;
• dependency on the generation of sufficient future
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measurement and recognition of deferred tax assets
and tested the operating effectiveness of such
controls.
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taxable income that can be set off against the losses
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recognized
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Involved our tax specialists to assist us in evaluating
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and hence, involves significant judgement. These
judgements could change over time as the matter
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the appropriateness of the nature of the tax losses
that can be set off against the future profits.
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progresses depending on experience on actual
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•
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Evaluated the appropriateness of the key
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assessment proceedings by tax authorities and other
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assumptions used in the projections considered for
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judicial precedents. Where considered necessary, the
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estimating future taxable profits.
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Company has obtained legal advice.
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Performed sensitivity analysis on the key assumptions
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Recoverability of deferred tax assets has been identified
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used in the evaluation.
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as a key audit matter due to the high degree of judgment
required and significance of the amounts involved.
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•
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Assessed the adequacy of the disclosures in the
standalone financial statements.
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Business combination under common control
See Note 44 to standalone financial statements
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The key audit matter
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How the matter was addressed in our audit
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Pursuant to the National Company Law Tribunal (NCLT)
Order dated March 24, 2025, fellow subsidiaries of the
Company viz. Rane Engine Valve Limited and Rane Brake
Lining Limited ("Transferor Companies”) were merged
with the Company. The Company has accounted for
the business combination using the pooling of interest
method in accordance with Appendix C of Ind AS
103 - Business Combination. Accordingly, the comparitives
have been restated to give effect of the amalgamation
from the beginingng og the previous year. The difference
betweent the assets, liabilities, acquired reserves and
shares transferred were transferred to capital reserves.
The aforesaid business combination has been identified
as key audit matter due to the significance of amounts
involved and complexity of accounting thereof.
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In view of the significance of the matter, the following key
audit procedures were performed by us:
• Assessed the compliance of the Company's
accounting policies in respect of business
combination accounting with applicable accounting
standards and the requirements of the approved
scheme of amalgamation.
• We understood from the management, assessed
and tested the design and operating effectiveness of
the Company's key controls over the accounting of
business combination.
• We have traced the assets, liabilities and reserves
of transferor companies from the audited financial
statements and tested the management's
computation of determining the amount determined
to be recorded in the capital reserve.
• We also assessed the adequacy and appropriateness
of the disclosures made in the standalone financial
statements.
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Other Information
The Company's Management and Board of Directors are
responsible for the other information. The other information
comprises the information included in the Company's
annual report, but does not include the financial statements
and auditor's report(s) 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 in the 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.
Management's and Board of Director's Responsibilities for
the Standalone Financial Statements
The Company's Management and Board of Directors are
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 state of affairs,
profit/loss and other comprehensive income, changes in
equity and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including
the Indian Accounting Standards (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; 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, the
Management and Board of Directors are 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 the 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 is also responsible for overseeing the
Company's financial reporting process.
Auditor's Responsibility 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 an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:
• I dentify 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 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 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 the Management and
Board of Directors.
• Conclude on the appropriateness of the Management
and Board of Directors use of the going concern basis
of accounting in preparation of standalone financial
statements 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.
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.
Other Matter
As stated in Note 44, the corresponding financial
information in the standalone financial statements were
restated to account for the scheme of amalgamation as
per the requirement of applicable Accounting Standards.
The figures for the year ended 31 March 2024 in so far it
pertains to the erstwhile Rane Engine Valve Limited, were
audited by another auditor whose report dated May 7, 2024
had expressed an unmodified opinion. Our opinion is not
modified in respect of this matter.
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 Section 143(11) 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 A. 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.
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 except for the matters stated in the
paragraph 2(B)(f) below on 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
comprehensive income), the standalone
statement of changes in equity and the
standalone 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 10 April 2025
taken on record by the Board of Directors, none
of the directors is disqualified as on 31 March
2025 from being appointed as a director in terms
of Section 164(2) of the Act.
f. the qualification relating to the maintenance of
accounts and other matters connected therewith
are as stated in the paragraph 2(A)(b) above on
reporting under Section 143(3)(b) of the Act and
paragraph 2(B)(f) 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 financial
statements of the Company and the operating
effectiveness of such controls, refer to our
separate Report in "Annexure B”.
B. 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, 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 as at 31 March 2025 on its
financial position in its standalone financial
statements - Refer Note 40 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,
as disclosed in the Note 38 (iii) to the
standalone financial statements, 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 person(s) or entity(ies), 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 by or on behalf of
the Company ("Ultimate Beneficiaries”) 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,
as disclosed in the Note 38 (iv) to the
standalone financial statements, no funds
have been received by the Company
from any person(s) or entity(ies), 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 by or on behalf of the
Funding Parties ("Ultimate Beneficiaries”) or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries.
(iii) 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 (i) and (ii) above, contain any material
misstatement.
e. The final dividend paid by the erstwhile
transferror companies during the year, in respect
of the same declared for the previous year, is in
accordance with Section 123 of the Act to the
extent it applies to payment of dividend.
As stated in Note 16 to the standalone financial
statements, 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 declared is in accordance
with Section 123 of the Act to the extent it applies
to declaration of dividend.
f. Based on our examination which included test
checks, the Company has used accounting
softwares for maintaining its books of account
which have a feature of recording audit trail (edit
log) facility and the same has been operating
throughout the year for all relevant transactions
recorded in the respective softwares, except that:
• the feature of audit trail at the database
layer to log any direct changes was enabled
and operated from 7 June 2024 onwards.
• the feature of audit trail at the application
layer for the accounting softwares used for
maintaining books of accounts for certain
fields relating to payroll was enabled from
4 June 2024 onwards.
• the feature of audit trail was not enabled at
the application and database layer for the
accounting software used for maintaining
books of account in relation to price change
system for sales/purchases.
Further, for the periods where audit trail (edit log) facility
was enabled for the respective accounting softwares,
we did not come across any instance of the audit trail
feature being tampered with. Additionally, except
where audit trail (edit log) facility was not enabled in
the previous year, the audit trail has been preserved by
the company as per statutory requirements for record
retention.
C. With respect to the matter to be included in the
Auditor's Report under Section 197(16) of the Act:
I n our opinion and according to the information and
explanations given to us, the remuneration paid by
the Company to its directors during the current 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
of the Act. The Ministry of Corporate Affairs has not
prescribed other details under Section 197(16) of the
Act which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants
Firm's Registration No.:101248W/W-100022
S Sethuraman
Partner
Place : Chennai Membership No.: 203491
Date: 27 May 2025 ICAI UDIN:25203491BMLJSM7081
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