We were engaged to audit the accompanying financial statements of IGC Industries Limited, ("the Company"),
which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss (including other
comprehensive income), Statement of Changes in Equity and Statement of Cash Flows for the year ended and notes
to the financial statement, including a summary of the significant accounting policies and other explanatory
information.
We do not express an opinion on the accompanying financial statements of the Company. Because of the
significance of the matter described in the Basis of Disclaimer of opinion section of our report, we have not been
able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial
statements.
Basis for Disclaimer of Opinion
a. The Company has not provided us with sufficient and appropriate audit evidence in respect of several material
items required for forming our audit opinion. Specifically, advances amounting to ?20.72 Crores made to
suppliers, which were disclosed under the head " Current Assets- Other Current Assets" (Note No. 6), were stated
to have been funded from the Right Issue proceeds of ?42.22 Crores. However, the Company failed to provide
the underlying documentation supporting these advances, such as purchase orders, contracts, or agreements.
In response to our alternative audit procedures, some counterparties submitted confirmations reflecting sales to
the Company totalling ^17,95,35,588/-. However, no corresponding purchases were recorded in the Company's
books in relation to these transactions. Furthermore, the Company failed to provide sales invoices, and it was
observed that applicable Goods and Services Tax (GST) was not charged on these purported transactions. These
inconsistencies cast significant doubt on the commercial substance and the accounting treatment of such
advances.
In the absence of supporting documentation, appropriate explanations, and due to the discrepancies observed
in external confirmations, we were unable to obtain sufficient and appropriate audit evidence to verify the
nature, accuracy, and recoverability of these balances. Consequently, we are unable to determine whether any
adjustments are necessary in respect of these reported amounts and the resultant impact on the financial
statements.
b. Further, an amount of ?20.00 Crores was paid to CNX Corporation Limited, a limited company, as disclosed
under the head "Financial Assets - Investments" (Note No. 3). However, the Company has not provided us with
any underlying documents to support the nature and purpose of this payment.
The absence of documentation relating to this material payment restricts our ability to assess whether the
transaction was appropriately authorized, correctly accounted for, and whether it complies with the applicable
financial reporting framework. We were also unable to evaluate whether the amount is recoverable or requires
provisioning. As a result, we were unable to obtain sufficient and appropriate audit evidence regarding the
accuracy, classification, and valuation of this amount. Consequently, we are unable to determine whether any
adjustments may be required in respect of this balance and the resultant impact on the financial statements.
c. We draw attention to the fact that the Company has accepted monies from various individuals aggregating to
?41.53 Lakhs during the year disclosed under the head "Financial Liabilities - Other Financial Liabilities" (Note No.
8b). Based on the information and explanations provided to us, and in the absence of appropriate supporting
documentation such as agreements, declarations, or other relevant records, we were unable to verify the nature
and terms of such receipts. In our view, the said transactions appear to be in contravention of the provisions
relating to acceptance of deposits as prescribed under the Companies Act, 2013 and the Companies (Acceptance
of Deposits) Rules, 2014. Due to the lack of sufficient and appropriate audit evidence, we are unable to determine
whether any adjustments or disclosures might have been necessary in respect of these transactions and their
consequential impact, if any, on the accompanying financial statements.
d. Further, we were not provided with adequate supporting documentation for several statutory and financial
matters including GST E-way bills, delivery challans, TDS challans, copies of TDS returns filed, professional tax
payment challans and returns. The absence of such audit evidence has limited the scope of our audit procedures
in these areas.
e. We draw attention to the fact that the Company has incurred continuous losses during all four quarters of the
financial year 2024-25 as well as in the preceding financial year 2023-24. These recurring losses raise significant
doubt about the Company's ability to continue as a going concern. The management has not provided us with
any comprehensive assessment or mitigation plan outlining how it intends to address the financial uncertainties
and maintain operational viability. In the absence of such evaluation and supporting evidence, we are unable to
assess the appropriateness of the going concern assumption used in the preparation of the financial statements.
Accordingly, we were unable to determine whether any adjustments might be required to the carrying value of
assets, liabilities, and classification of balances in the financial statements for the year ended 31st March, 2025.
f. Note No. 5(c) and 8(b) to the financial statements, in respect of Loans & Advances and Unsecured Loans, external
confirmations of the balances are not available. Due to non-availability of confirmation of balances, we are
unable to quantify the impact, if any, arising from the confirmation of balances.
g. Note No.4 to the financial statements, in respect of Inventories Verification of the Inventories are not available.
Due to non-availability of confirmation of balances, we are unable to quantify the impact, if any, arising from
the confirmation of balances.
Other Matters
The Company has various litigations pending before various authorities, the outcome of which are material but not
practicable for the Company to estimate the timings of cash outflows, as well as per Legal opinions obtained by the
management of the Company, it is not probable that an outflow of resources embodying economic benefits will be
required to settle the obligation.
Our report is not modified in respect of the above matters.
The Company's Board of Directors is responsible for the preparation of the other information. The other information
comprises the information included in the Management Discussion and Analysis, Board's Report including
Annexures to Board's Report, Business Responsibility Report, Corporate Governance and Shareholder's
Information, but does not include the 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 any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a no material misstatement of this other
information; we are required to report that fact. We have nothing to report in this regard.
Management's Responsibility for the 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 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 Ind AS and other accounting principles generally accepted in India. This responsibility also includes
maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 financial statements that give a true and fair view and are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, management 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 are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our responsibility is to conduct an audit of the financial statements in accordance with Standards on Auditing and
to issue an auditor's report. However, because of the matter described in the Basis for Disclaimer of Opinion section
of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion
on these financial statements. We are independent in accordance with the ethical requirements in accordance with
the Code of ethics and provisions of the Act, that are relevant to our audit of the financial statements and we have
fulfilled our other ethical responsibilities in accordance with the code of ethics and the requirements under the Act.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• 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.
• Obtain an understanding of internal financial controls 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 system 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 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 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
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 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 financial statements that, individually or in aggregate, makes
it probable that the economic decisions of a reasonably knowledgeable user of the 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
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
most significance in the audit of the 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.
1) As required by the Companies (Auditors' Report) Order, 2020 ("the Order") issued by the Central Government
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) 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 financial statements, except as stated in
Basis for disclaimer opinion section.
b) Except for the possible effects of the matters described in the Basis of disclaimer opinion section above, 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.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of
Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the
relevant books of account, except for the matters described in the Basis of disclaimer of opinion paragraph.
d) Except for the effects of the matter described in Basis for disclaimer opinion paragraph, the aforesaid
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 March 31, 2025 taken on record
by the Board of Directors, none of the directors is disqualified as on March 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 financial controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
g) 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.
h) 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:
i) The Company has disclosed the impact of pending litigations on its financial position as at 31st March
2025 in its financial statements, if any
ii) The Company did not have any long-term contracts including derivative contracts for which there were
any material foreseeable losses.
iii) There have been no amounts, required to be transferred, to the Investor Education and Protection Fund
by the Company.
iv)
(a) The Management has represented that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) 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 or entity, including foreign entity ("Intermediaries"), with the understanding,
whether recorded in writing or otherwise, that the Intermediary shall, whether, 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;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) have been received by the Company from any
person or entity, including foreign entity ("Funding Parties"), with the understanding, whether
recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of
the Ultimate Beneficiaries;
(c) 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 (a) and (b) above, contain any material
misstatement.
v) The Company has not declared or paid any dividend during the year, hence we have no comments on
the compliance with section 123 of the Companies Act, 2013.
vi) Based on our examination which included test checks, the company has used accounting software for
maintaining its books of account which does not have 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.
For and on behalf of
ADV & Associates
Chartered Accountants
FRN.128045W
Prakash Mandhaniya
Partner
Membership No: 421679
Place: Mumbai
Date: 13.08.2025
UDIN: 25421679BMTFCM2466
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