1. We have audited the accompanying Standalone Financial Statements of Excel Industries Limited (“the Company”), which comprise the Standalone Balance Sheet as at March 31,2024, and the Statement of Standalone Profit and Loss (including Other Comprehensive Income), the Statement of Standalone Changes in Equity and the Statement of Standalone Cash Flows for the year then ended, and notes to the standalone financial statements, including material accounting policy information and other explanatory information (hereinafter referred to as “standalone financial statements”).
2. I n 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 accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2024, and total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.
Basis for opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) 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 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 judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Key audit matter
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How our audit addressed the key audit matter
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A. Assessment of the valuation of an investment in unquoted equity instrument:
(Refer Notes 2(a), 8 and 41 to the standalone financial statements)
The Company has an investment amounting to Rs. 34,795.95 lakhs in unquoted equity instrument valued at ‘Fair value through Other comprehensive income' in accordance with Indian Accounting Standard (Ind AS 109), Financial Instruments, at each reporting date.
An independent professional valuation expert is engaged by the management to determine the fair value, who ascertains the fair value based on the Comparable Companies' Multiple Inputs.
The key judgements involved in the valuation are identification of comparable companies, assessment of maintainable EBIDTA (Earnings before interest, depreciation, taxes and amortisation) and other relevant valuation parameters.
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Our procedures in relation to management's assessment of
the valuation of an investment in unquoted equity instrument
include following:
• Obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over determination of fair value including valuation model and management assumptions / judgements involved.
• Evaluated independence, competence and capabilities of the management's expert.
• 1 nvolved auditor's expert to assist in evaluation of valuation methodology and key valuation assumptions and judgements involved.
• Evaluated competence and capabilities of the auditor's expert.
• Assessed the reasonableness of the input data provided by the management to the independent professional valuation expert, such as Revenue, EBIDTA and Profit after tax of investee company for the year ended March 31,2024.
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Key audit matter
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How our audit addressed the key audit matter
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Given the inherent subjectivity in the valuation of
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Tested the mathematical accuracy of the valuation report.
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the above investments, relative significance of this
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Assessed appropriateness of relevant disclosures in the
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investment to the standalone financial statements
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standalone financial statements.
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and the nature and extent of audit procedures involved, we determined this to be a key audit matter.
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Based on the audit procedures performed, we found management's assessment of the valuation of investment in unquoted equity instrument and related disclosures to be reasonable.
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B. Assessment of indicators of impairment
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Our procedures in relation to assessment of indicators of impairment
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and the recoverable amount of goodwill and
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and the recoverable amount of goodwill and property, plant and
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property, plant and equipment
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equipment include the following:
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(Refer Notes 1(H), 2(b), 3 and 6 to the standalone
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Analysed the indicators of impairment of property, plant and
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financial statements)
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equipment including understanding of Company's assessment
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The Company has goodwill amounting to
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of those indicators;
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Rs. 1,885.28 lakhs and property, plant and
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Obtained an understanding, evaluated the design, and tested
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equipment amounting to Rs. 36,403.53 lakhs as on
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the operating effectiveness of controls over assessment of any
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March 31,2024. Goodwill is tested for impairment
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potential impairment indicators, determination of CGU and
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annually or more frequently if events or changes in
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determination of recoverable value of goodwill and property,
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circumstances indicate that they might be impaired.
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plant and equipment including management assumptions/
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The Company periodically assesses the carrying
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judgements.
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amount of its property, plant and equipment to
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Involved auditor's expert to assist in evaluation of key valuation
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determine whether there is an indication that those
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assumptions and judgements such as discount rate and
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assets have suffered impairment loss.
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terminal growth rate.
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In making such assessments, the Company considers both internal and external sources of
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Evaluated competence and capabilities of the auditor's experts.
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information to determine whether there is an
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Assessed the reasonableness of assumptions around the key drivers of the cash flow forecasts such as future sales, input
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indicator of impairment and, accordingly, whether the recoverable amount of the cash generating unit
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costs, discount rate and terminal value growth rate.
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(CGU) needs to be estimated.
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Performed sensitivity analysis over key assumptions to
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An impairment loss is recognised if the recoverable amount is lower than the carrying value. The
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corroborate that recoverable amount of goodwill and property, plant and equipment is within a reasonable range.
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recoverable amount is determined based on the
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Tested the mathematical accuracy of the impairment working.
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higher of value in use and fair value less costs
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Assessed appropriateness of relevant disclosures in the
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to sell.
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standalone financial statements.
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The assessment of indicators of impairment and
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Based on the above procedures performed, we found management's
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recoverable value of goodwill and property, plant and
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assessment of indicators of impairment and the recoverable
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equipment is considered to be a key audit matter as
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amount of goodwill and property, plant and equipment and related
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the amount is significant to the standalone financial
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disclosures to be reasonable.
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statements and there is significant judgement involved in estimating the recoverable value including future cash flows, terminal value growth rate and the weighted-average cost of capital (discount rate).
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Other Information
5. The Company's Board of Directors is responsible for the other information. The other information comprises the information
included in the annual report, but does not include the 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 and take appropriate action as applicable under the relevant laws and regulations.
Responsibilities of management and those charged with governance for the standalone financial statements
6. The Company's Board of Directors is 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, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards 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.
7. In preparing the standalone 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. Those Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor’s responsibilities for the audit of the standalone financial statements
8. 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.
9. As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional scepticism 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 standalone 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 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 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 financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
10. 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.
11. 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.
12. 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.
Report on other legal and regulatory requirements
13. As required by the Companies (Auditor's Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure B, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
14. 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 paragraph 14(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended).
(c) The Standalone Balance Sheet, the Statement of Standalone Profit and Loss (including other comprehensive income), the Statement of Standalone Changes in Equity and the Statement of Standalone Cash Flows dealt with by this Report are in agreement with the books of account.
(d) I n our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March 31,2024, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2024, from being appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our remarks in paragraph 14(b) above on reporting under Section 143(3)(b) of the Act.
(g) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”.
(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, 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 in its standalone financial statements - Refer Note 46(a) to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
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.
iv. (a) The management has represented that, to the best of its knowledge and belief, 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, 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 (Refer Note 55(vii) to the standalone financial statements);
(b) The management has represented that, to the best of its knowledge and belief, 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, 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 (Refer Note 55(vii) to the standalone financial statements); and
(c) Based on such audit procedures that we 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 (a) and (b) contain any material misstatement.
v. The dividend declared and paid during the year by the Company is in compliance with Section 123 of the Act.
vi. Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility. The audit trail feature for one accounting software (ERP application), including at the database level, has operated only towards the end of the financial year, except for certain information or data. The audit trail feature for another software application (supporting payroll) has operated throughout the financial year, except for direct database changes. During the course of performing our procedures, other than the aforesaid instances where the question of our commenting on whether the audit trail feature was tampered with does not arise, we did not notice any instance of the audit trail feature being tampered with.
15. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
For Price Waterhouse Chartered Accountants LLP Firm Registration Number: 012754N/N500016
Bhavesh Gada Partner
Membership Number: 117592 UDIN: 24117592BKEPIZ4807 Place: Mumbai Date: May 24, 2024
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