Indian Metals and Ferro Alloys Limited
Report on the Audit of the Standalone Financial StatementsOpinion
1. We have audited the accompanying standalone financial statements of Indian Metals and Ferro Alloys Limited ('the Company'), which comprise the Standalone Balance Sheet as at 31 March 2025, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Cash Flow and the Standalone Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including material accounting policy information and other explanatory information.
2. 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 ('the Act') in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards ('Ind AS') specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2025, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards 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 ('ICAI') 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.
Key Audit Matters
4. 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.
5. We have determined the matters described below to be the key audit matters to be communicated in our report.
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Key audit matters
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How our audit addressed the key audit matters
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Existence of inventories
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Our audit procedures with respect to existence of inventory
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Refer note 2 to the accompanying standalone financial statements for
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included, but were not limited to the following:
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material accounting policy information on inventories and note 10 to the
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Obtained an understanding of process and controls
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accompanying standalone financial statements for details of carrying
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implemented by Company for physical count of inventories.
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value of inventories along with classification into raw materials, work-
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Evaluated the design and implementation and tested the
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in-progress and finished goods of inventory as of 31 March 2025.
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operating effectiveness of such controls.
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As at 31 March 2025, the company has inventory of H 736.15 crore
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Evaluated the competence and objectivity of management
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which represents 23.24 % of the total assets of the Company. The
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and auditors' experts involved in physical verification exercise.
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inventory comprises of raw material, work-in-progress and finished
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Tested and agreed the inventory as per physical verification
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goods. Raw material includes Chrome Ore, Coal, met coke and other
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with the book records and performed cut-off and roll-forward
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materials and Finished goods for the company is Ferro Chrome.
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procedures on a sample basis.
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Such inventories are located at different locations such as mines,
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Evaluated the appropriateness and adequacy of disclosures
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yards and ports. Determination of physical quantities of inventories
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made in the financial statements in accordance with
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is done based on volumetric measurements and involves special consideration with respect to measurement of the surface area, density of material and moisture content, etc. The physical verification of such inventory is performed by the management with help of management experts on different dates across various locations through the year.
Considering the materiality of amounts involved and complexity involved in determining physical quantities of inventories, physical verification of inventories has been considered as a key audit matter.
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applicable accounting standards.
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Key audit matters
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How our audit addressed the key audit matters
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Capital expenditure in respect of underground mining infrastructure
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Our audit procedures included, but were not limited
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Refer note 2 to the accompanying standalone financial statements
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to, the following:
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for material accounting policy information on capitalisation of
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•
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Obtained an understanding of the business process relating
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mining infrastructure and note 3 for details of mining infrastructure
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to accounting for capital expenditure relating to underground
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recognised as capital work-in-progress ('CWIP') during the current
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mining infrastructure;
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year aggregating to H 12.27 crore as per such accounting policy.
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•
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Assessed the appropriateness of accounting policy of the
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As stated in note 3, the Company has established the stability
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Company in accordance with Ind AS 16;
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of its underground mines in the current year based on technical
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•
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Evaluated the design and implementation, and tested the
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feasibility and stability reports obtained from experts and
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operating effectiveness of key internal controls over the
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accordingly, recognised capital expenditure incurred for developing shafts, declines and other mining infrastructure under CWIP Upon
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capitalisation of expenditure;
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the readiness of mining infrastructure of particular phase for ore
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•
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Evaluated the competence and objectivity of management
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extraction, the CWIP would be capitalised as mining infrastructure
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experts involved;
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assets in accordance with the Company's accounting policy and
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•
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Obtained the technical feasibility and stability reports
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depreciated using the units of production method.
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prepared by management's experts to determine whether the
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The determination of whether the said expenditure meets the
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criteria for capitalisation under Ind AS 16 were met.
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recognition and capitalisation criteria under Ind AS 16, Property,
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•
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Evaluated the reasonableness and appropriateness of
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Plant and Equipment ('Ind AS 16') involves significant management
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allocation of costs between capital expenditure and expenses
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judgment, particularly regarding technical feasibility, future
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incurred for ore extraction; and
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economic benefits, etc.,
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•
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Evaluated the appropriateness and adequacy of the
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Given the materiality of the amounts involved and the significant
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related presentation and disclosures in the standalone
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judgment required, this area has been considered as a key audit
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financial statements in accordance with the applicable
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matter for the current year audit.
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accounting standards.
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Implementation of a new Information Technology (‘IT’) system
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Our audit procedures with respect to implementation of new IT
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for financial reporting and related migration of Data
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system included, but were not limited to, the following:
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The Company has implemented a new IT system, Oracle Fusion
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Obtained understanding of the process followed and controls
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('new IT system') with effect from 1 April 2024, for supporting its
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implemented by the Company for implementing the new IT
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operations and financial reporting, which required an extensive
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system and for migration of standing data from erstwhile IT
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exercise of data migration from erstwhile IT systems, Legacy
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systems into the new IT system.
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('erstwhile IT system').
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Evaluated the design and tested the operating effectiveness
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Such significant change in IT system increases the risks to the
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of key controls over the new system implementation and data
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internal financial controls environment of the Company. These
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migration, which includes controls over change management
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changes create a financial reporting risk while migration takes
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and system development.
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place as processes and controls that have been established
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Reviewed the reconciliations prepared by the management
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over a number of years are migrated and updated into a new IT
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relating to data migration and tested movement of a sample
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environment. The significant data migration required for the above
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of general/sub-ledger accounts and balances, including
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exercise also leads to risk of errors.
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standing data, from erstwhile IT systems to the new IT system.
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Considering the significance of the activity and its pervasive impact on the standalone financial statements, this matter has been determined as a key audit matter for current year audit.
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Validated whether appropriate approval and go-live sign-offs were taken by the respective authorised users.
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Evaluated the design and operating effectiveness of the IT General Controls (ITGC) and business process controls post-migration (both automated and manual) of the new IT system and evaluated the impact of results in planning our audit procedures.
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Information other than the Standalone Financial Statements and Auditor's Report thereon
6. The Company's Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report but does not include the standalone financial statements and our auditor's report 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.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
7. The accompanying standalone financial statements have been approved by the Company's Board of Directors. The Company's Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act 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 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
8. In preparing the standalone financial statements, the Board of Directors 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
9. The Board of Directors is also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
10. 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 Standards on Auditing 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.
11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify 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 management;
• Conclude on the appropriateness of Board of Directors' 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 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; and
iv. a. The management has represented that, to the best of its knowledge and belief, as disclosed in note 54 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person or entity, including foreign entities ('the 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 ('the Ultimate Beneficiaries') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;
b. The management has represented that, to the best of its knowledge and belief, as disclosed in note 54 to the standalone financial statements, no funds have been received by the Company from any person or entity, including foreign entities ('the 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; and
c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.
• 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.
12. 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.
13. 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.
14. 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
15. The standalone financial statements of the Company for the year ended 31 March 2024 were audited by the predecessor auditor, SCV and Co. LLP, who have expressed an unmodified opinion on those standalone financial statements vide their audit report dated 23 May 2024.
16. Further, the comparative financial information of the Company for the year ended 31 March 2024 presented in the accompanying standalone financial statements also includes the financial information of the erstwhile subsidiary, Utkal Coal Limited (hereinafter referred to as the "Amalgamating Company”), which has been amalgamated with the Company pursuant to the Scheme of Amalgamation ("the Scheme”) as detailed in Note 46 to the standalone financial statements. The financial statements of Utkal Coal Limited for the years ended 31 March 2024 were audited by another firm of Chartered Accountants, M/s RKP Associates, who expressed an unmodified opinion on those financial statements vide their audit reports dated 22 May 2024. Such audit report has been furnished to us by the management and has been relied upon by us for the purpose of our audit of the accompanying standalone financial statements.
Report on Other Legal and Regulatory Requirements
17. As required by section 197(16) of the Act, based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the
provisions of and limits laid down under section 197 read with Schedule V to the Act.
18. 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.
19. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, 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 purpose of our audit of the accompanying standalone financial statements;
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.
c) The standalone financial statements dealt with by this report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;
e) On the basis of the written representations received from the directors and 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) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company as on 31 March 2025 and the operating effectiveness of such controls, refer to our separate report in Annexure B wherein we have expressed an unmodified opinion; and
g) 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, as detailed in note 39 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2025;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2025;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2025;
v. a. The interim dividend declared and paid
by the Company during the year ended 31 March 2025 and until the date of this audit report is in compliance with section 123 of the Act.
b. As stated in note 53 to the accompanying standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year ended 31 March 2025 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.
vi. As stated in note 56 to the standalone financial statements and based on our examination which included test checks, the Company, in respect of financial year commencing on 1 April 2024, has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with. Furthermore, the audit trail has been preserved by the Company as per the statutory requirements for record retention.
For Walker Chandiok and Co LLP
Chartered Accountants Firm's Registration No.: 001076N/N500013
Rajni Mundra
Partner
Place: New Delhi Membership No.: 058644
Date: 21 May 2025 UDIN: 25058644BMODKT2089
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