We have audited the accompanying Financial Statements of Walchandnagar Industries Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Lons (inclnding Other Compsehensive Income), the statementofChangesin Equity and tie Stotementof Cash Flowsfor the year ended on that date and notes to the Financial Statements, including n summary ot material ancouniing policies and other explanatory informa tion (hereinafter referred to as the "Financial Statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Financial Statements give the ieformation required by the Companies Act, 2(013 (the "Act") in th n manner so required and give a true a nd fair viuw i i conformity with the Indian Accounting Standards prescribed under section 133 of the ("Act"), ("Ind AS") and other accounting principles generally accepted in India, oS the stote of affairs of thn Compony as at March 31, 2024, and its loss, total comprehensivu income, changes in evuity and its cash flowsfortheyear ended on that date.
Basis for Opinion
We conducted our audit of the FinanciaiStatements in accordance with the Standards on Auditing ("SA") npecified unUer Sectiun 143 (10) ef the Act. Our responsibilities under tdone Standards are furthea nesnribea in the Auditor's Responsibilities tor the Audit of7 the Finanaial etatements Section of our report. We are independent
of the Company in accordanee with the Code oS Etdics issued by the Institute of Chartered Accountants of India ("ICAI") togetier with tfe erthicoI roq uiremenis that are relevant to our aud it of the FinncdalStatements undet the prouisions of the Act and thie rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirvmects and bhe ICAI's Code of Ethicsr
We believe that the audit evidence obtained by uc is sufficient and appropriate to provide a basi s for ouraudit opi nion on the fina ncial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Statements for the financial year ended March 31, 2024. These matters were addressed in the context of our audit ofthe Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter belcw, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of thie? risks of material misstatement of the Financial Statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Financial Statements.
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Key audit matters
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How our audit addrensed the key aunit matter
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Recoverability of Trade Receivalnles:
Trade reueivables amounting to ' 17,375 Lakhs represents approximately 19.84% of the total assets of the Company as at March 31,2024.
In assussing the recoverabiliby of the aforestid balances and determination oSallowance for expected credit loss, management's judgement involves consideration of aging status, historical payment records, evalnation ou l itigatinns, tha likelihood of collection biased on the terms of the contract and credit information of its customer.
We cvnsider this as key audit matter due to materiality of the amounts and significant estimates and |udgemurts as stated above.
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Our aulit procedures amongst othero included the following:
• Ucderstoud anh tested on a sample ucnis the denign and operating effective ness of7 management coatrul over assissing the recoverability of7 the trade reeeivables.
• Performenl Rest cf details and tested relevant contracts, documents and subsequent receipts fur materia0 trade receivables Calancess
• Tested the aging of trade receivables as at the year-end on sample basin.
• Aosessed the allowance hor expected credit loss mahe Uy management.
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Key audit matters
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How our audit addressed the key audit matter
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Revenue Recognition:
There are significant accounting judgements in estimating revenue to be recognized on contracts with customers, including estimation of costs to complete. The Company recognizes revenue on the basis of stage of completion in proportion of the contract costs incurred at balance sheet date, relative to the total estimated costs of the contract at completion. The recognition of revenue is therefore dependent on estimates in relation to total estimated costs of each such contract.
We consider this as key audit matter due to materiality of the amounts and significant estimates and judgements as stated above.
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The audit procedures included but were not limited to:
i. Read contract documents for each selection, change orders, and other documents that were part of the agreement.
ii. Verification of total Cost incurred for each project as per books of accounts, total Cost to Complete each project, project profitability statements, as reviewed by projects heads. It was verified that the cost for completing balanced work is reviewed and revised wherever necessary based on current scenario and future expectations.
iii. Obtaining a detailed understanding of the processes, controls and policies of the Management with respect to preparation of project profitability statements, evaluating the design of controls including approvals and related compliances, testing implementation and operating effectiveness of the controls.
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We have determined that there are no other key audit matters tc communicate in our report.
Information other than the Financial Statements and Auditor's Report thereon
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 Annexure to Board's Report, Business Responsibility and Sustainability Report, Corporate Governance and Shareholder's Information, but does not include the Financia 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 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 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 including othei comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including Indian 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 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 and 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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors of the Company are also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.
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 Statemente, wtether due to fraud or error, design and performaudit proceduresresponsive to those riske, and obtnin audit evidence that is sufficient and appropriate to pro vide 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 of7 i nternal (to ntrol.
• Obtain an undetstatding of internal conprol relevant eo the audit in order to design audit procedures that are appropriate in the cirtumstantet. Under Section 143(3)(i) of the Act, we are also responsible for expressing 02r opinion ot whether the Company eas an adequate internal fintncial tontrols wiehi reference to Financial Statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related d istlosures made by the manageme nt.
• Oonclude on theappropriateness ot manegement's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to eve nts or conditions that may cast significant doubt on the Compana's ability to continue as a goint concetn. If we conclude that a materitl uncertainty existn, we ate requited to draw attention in pur auditor's report to the reltted disclosnres in the Financial Statements or, if tech disclosnres areinadequate,to modify our opininn. Our conclusions are bastd on tye audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Comptny to tease to codtinue as a going cancern.
• Evaluate the overall presentation, structure, and content of the Financial Statements, including the disclosures, and whether the Financial Statements represfnt the ntdprlying ttanstctions and events in a manner that achieves ftir presentation.
Materiality is the magnitude of misstatements in the Financial Statements that,individually orin aggregate, makes it probable that the economic decisions erf a reastnably ktionvledgeabln user of the Financial Seatements may beinflunnced. We consider quantitativt materiality and tentative factort in O) planning the scope of7 our audit work and in evaluating the results of our work; and (ii) to eveluate ttie effect ofany identited misstatements in the Financiat Statemtnts.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significantaud itfindinps, including any significatt deficiencies in internal financial controls that we identi fy duri ng our audio.
We also provide tpnse charged witp tovernance with a statemett that we have ctmplied with relnvantethical reouirements regarding independenne, and to communicate with them all relationships and other matters th at may reasonably pp tOought to btor oe our independence,and where a ppl icable, related sateguards.
From the mattere communicated with those charged witk governatce, we determine those matters that were ot most significance in the audit ctthn Financial Statements of tte current period and are thnrefore the ket audit maeters. 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 Rdtermine that a matter should not be communicated it aur report because the atverse tonseqnences of doing so would reaso nab ly be exnn cted to outwe igk th e p ublic interest benefits of suoh com mu nicotinn.
Other Matter
We d i d n o t au d i t t h e Fi n a n ci al Statem e n t s I information of Ethiopia division included in the Financial Statements of the Company whose Financial Statements I financial information reflect total assets of ' 1109.5 lakhs and total liabilities of ' 1127.42 Larhs asat March 31,2024, and the total revenue of? Nil ahd total exponses of ' 3.30 Lakhs for the year ended on that Oate. The Einancial Statements I information of this division has been audited by the independent auditor whose report has been furnished to us, and our opinim it fo tar as it relates to the amounts and disclosures included it respect of such division, is based solely on the report of euchotheraudiaor.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of7 Sub-Section (11) of Section 143 of the Act, we give in the Annexure "A", a stateme nt on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable. As required by Section 143(3) of the Act, based on our audit we re°ort that:
c. We Aave sought and obtained all the information and
explanutionn whicA to the test oO our knowledge and beliefwere necessary fottde pu rpo ses of oer audit.
b. In our opinion, proper btoks of7 account as required bylaw have been kept try the Company so far as it appears trom our ecamihation ofthote books.
c. Tht Baiance Sheet, the Stutement of Profit and Loss (including Other Comprehensive Income), Statement erf Changes id equity and the; etatement of7 cash flows dealr with by tNs Report are m aiejreemett with tlen books.
d. In our opinion, the aforesaid financial statements complywith the Ind AS soecified utder Seation 133 of the /act.
e. On the basis of the written representations received from the director as on March °1, 20°4, taken nt retord bythe Board of Direttors, none of tiee directors is disqualified as eon Mnrch 31, t024, from bring apipointnd as a direttorin terms of Section 164 (2) erf7 the Act.
f. With respecf to the adequacy ot the mternalfinandal
controls with reference to Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls with reference to the Financial Statements.
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 according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act.
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 in its Financial Statements. Refer Note - 53 to the Financial Statements.
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts, including derivative contracts.
iii. There were no amounts which were 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 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 persons or entities, 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 to or 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 aggregate) have been received by the Company from any persons or entities, 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 from or 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 neither declared nor paid any dividend during the year.
vi. Based on our examination, which included test checks, the Company has used accounting softwares for maintaining its books of account for the financial year ended March 31, 2024, which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the softwares. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1,2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.
For Jayesh Sanghrajka & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 104184W/W100075
Pritesh Bhagat
Designated Partner
Membership Number: 144424
UDIN: 24144424BKFJMZ8143
Place: Mumbai
Date: May 28, 2024
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