1. We have audited the accompanying standalone financial
statements of Sona BLW Precision Forgings Limited (‘the
Company’), which comprise the Standalone Balance
Sheet as at 31st 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 31st 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 matter
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Impairment of goodwill and brands having indefinite useful life
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Our audit procedures included, but were not limited to the following:
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(together ‘intangibles’)
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a)
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Obtained an understanding from the management with
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As detailed in Note 46 to the standalone financial statements, the
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respect to its impairment assessment process, assumptions
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Company carries goodwill amounting to INR 1,582.24 million and
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used and estimates made by the management;
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brands amounting to INR 687.40 million in its standalone balance
sheet as at 31st March 2025.
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b)
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Evaluated the design and tested the operating effectiveness
of controls related to aforementioned process of
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The goodwill (related to Comstar) was recorded pursuant to scheme
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impairment testing;
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of amalgamation being approved by the Hon’ble National Company
Law Tribunal vide its order dated 7th January 2022 post which the
Company and its wholly owned subsidiary Comstar Automotive
Technologies Private Limited were merged.
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c)
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Obtained the impairment analysis carried out by the
management and tested its mathematical accuracy.
Understood and evaluated the basis of identification of CGUs
to which goodwill is allocated for impairment assessment;
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The brands were recognised pursuant to Company acquiring SONA
Intellectual property rights and all intellectual property rights thereto
from SONA Management Services Limited.
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d)
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Traced the cash flows considered in future projections to
approved business plans and compared past projections
with actual results to evaluate efficacy of the business
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In terms with Indian Accounting Standard 36, Impairment of Assets,
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projections process;
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Goodwill and indefinite lived assets are tested for impairment annually
by the management at the CGU level, whereby the carrying amount
of the CGU (including goodwill) is compared with the recoverable
amount of the CGU.
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e)
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Evaluated the inputs and assumptions used by the
management in future projections with respect to revenue
and cost growth trends for reasonableness thereof, basis our
understanding of the business and market trends;
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Impairment assessment requires significant estimations and
judgement with respect to inputs used and assumptions made to
prepare the forecasted financial information, used to determine the
recoverable amount, using discounted cash flow model (‘Model’).
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Key audit matters
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How our audit addressed the key audit matter
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Key assumptions used in management’s assessment of the carrying
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f)
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Engaged auditor’s valuation experts to assess
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amount of goodwill and indefinite life intangible assets includes the
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appropriateness of the valuation methodology applied
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expected growth rates, estimates of future financial performance,
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and the reasonableness of the assumptions used including
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market conditions and discount rates, amongst others.
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discount rate and long-term growth rates, basis comparison
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The management has concluded that the recoverable amount of the
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to economic and industry forecasts where appropriate;
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CGU is higher than its carrying amount and accordingly, no impairment
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g)
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Performed sensitivity analysis on these key assumptions to
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provision has been recorded as at 31st March 2025.
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assess the degree of estimation uncertainty involved in the
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Considering the materiality of the amount involved and significant
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estimates and
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degree of judgement and subjectivity involved in the estimates
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h)
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Assessed the adequacy and appropriateness of
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and assumptions used in determining the cash flows used in the
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the disclosures made by the management in the
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impairment evaluation, we have determined impairment of such
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standalone financial statements in accordance with the
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intangibles as a key audit matter for the current year audit.
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accounting standards.
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Impairment assessment of investment in a subsidiary company.
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Our audit procedures included, but were not limited to, the following:
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As described in Note 46 to the standalone financial statements,
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a)
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Obtained an understanding from the management with
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the Company has completed the acquisition of 54% share capital
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respect to its impairment assessment process, assumptions
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and voting rights in Novelic d.o.o. Beograd on 6th September 2023,
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used and estimates made by management.
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as per terms of the definitive documents executed in this regard.
The subsidiary’s net worth is lower than the carrying value of the
investment and thus, the management has performed a detailed
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b)
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Evaluated the design and tested the operating effectiveness
of controls related to aforementioned annual impairment.
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impairment investment in accordance with the requirements of Ind AS
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c)
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Obtained the impairment analysis carried out by the
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36, Impairment of Assets.
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management and tested its mathematical accuracy.
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The management has determined the recoverable value of the
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d)
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Traced the cash flows considered in future projections to
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investment through fair valuation using discounted cash flow method,
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approved business plans of the investee company and
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which requires the management to make significant estimates and
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compared past projections with actual results to evaluate
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judgements with respect to detailed cash flow projections based
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efficacy of the business projections process;
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on underlying business plans of the subsidiary company, expected
growth rates in the business and other market related factors.
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e)
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Evaluated the inputs and assumptions used by the
management in future projections with respect to revenue
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The management has concluded that the recoverable amount of the
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and cost growth trends for reasonableness thereof, basis our
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Investment is higher than its carrying amount and accordingly, no
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understanding of the business and market trends;
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impairment provision has been recorded as at 31st March 2025.
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f)
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Engaged auditor’s valuation experts to assess
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Considering the materiality of the amounts involved and significant
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appropriateness of the valuation methodology applied
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degree of judgement and subjectivity involved in the estimates and
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and the reasonableness of the assumptions used including
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key assumptions used in determining the cash flows used in the
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discount rate and long-term growth rates, basis comparison
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impairment evaluation, we have determined impairment of such
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to economic and industry forecasts where appropriate;
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investment as a key audit matter for current year audit.
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g)
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Performed sensitivity analysis on these key assumptions
to assess the degree of estimation uncertainty involved in
the estimates;
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h)
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Assessed the adequacy and appropriateness of the disclosures
made by the management in the standalone financial
statements in accordance with the accounting standards.
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• 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
• 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.
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. The Annual Report is
expected to be made available to us after the date of
this auditor's report.
Our opinion on the standalone financial statements
does not cover the other information and we will 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 identified above when it becomes available
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.
When we read the Annual Report, if we conclude
that there is a material misstatement therein, we are
required to communicate the matter to those charged
with governance.
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;
REPORT ON OTHER LEGAL AND
REGULATORY REQUIREMENTS
15. As required by Section 197(16) of the Act, based on
our audit, we report that the Company has paid and
provided for 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.
16. 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 I a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
17. Further to our comments in Annexure I, 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) Except for the matters stated in paragraph 17(h)
(vi) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014
(as amended), 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 31st March 2025 from being
appointed as a director in terms of Section 164(2)
of the Act;
f) The modification relating to the maintenance of
accounts and other matters connected therewith
are as stated, paragraph 17(b) above on reporting
under Section 143(3)(b) of the Act and paragraph
17(h)(vi) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014 (as
amended);
g) With respect to the adequacy of the internal
financial controls with reference to financial
statements of the Company as on 31st March 2025
and the operating effectiveness of such controls,
refer to our separate report in Annexure II wherein
we have expressed an unmodified opinion; and
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, as detailed in note 39 to
the standalone financial statements, has
disclosed the impact of pending litigations on
its financial position as at 31st 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 31st March 2025;
iii. There were no amounts which were required
to be transferred to the Investor Education
and Protection Fund by the Company during
the year ended 31st March 2025;
iv. a) The management has represented
that, to the best of its knowledge and
belief, as disclosed in note 49 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(s) or entity(ies), 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 49 to the standalone
financial statements, no funds have
been received by the Company from any
person(s) or entity(ies), 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.
v. The interim dividend declared and paid by
the Company during the year ended 31st
March 2025 and until the date of this audit
report is in compliance with Section 123
of the Act. The final dividend paid by the
Company during the year ended 31st March
2025 in respect of such dividend 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 34
to the accompanying standalone financial
statements, the Board of Directors of the
Company have proposed final dividend for
the year ended 31st 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. Based on our examination which included test
checks, the Company, in respect of financial
year commencing on 1st April 2024, has used
accounting software for maintaining its books
of account which have a feature of recording
audit trail (edit log) facility and the same
have been operated throughout the year
for all relevant transactions recorded in the
software except that, audit trail feature was
not enabled at database level for accounting
software to log any direct data changes.
Further, during the course of our audit we did
not come across any instance of audit trail
feature being tampered with in respect of
the accounting software where such feature
is enabled. Furthermore, the audit trail has
been preserved by the Company as per the
statutory requirements for record retention.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm’s Registration No.: 001076N/N500013
Arun Tandon
Partner
Membership No.: 517273
UDIN: 25517273BMICZR6458
Place: New Delhi
Date: 30th April 2025
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