We have audited the accompanying Standalone Ind AS Financial Statements of Nelco Limited ("the Company") which
comprise the Balance sheet as at March 31, 2026, the Statement of Profit and Loss, including the Statement of Other
Comprehensive Income, the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended
and notes to the Standalone Ind AS Financial Statements, including a summary of material accounting policies and other
explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone
Ind AS Financial Statements give the information required by the Companies Act, 2013, as amended ("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, 2026, its profits including other comprehensive loss, its cash flows and
the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the Standalone Ind AS Financial Statements in accordance with the Standards on Auditing
(SAs), as 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 Ind AS 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 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 audit opinion on the Standalone Ind AS Financial Statements.
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgment, were of most significance in our audit of the
Standalone Ind AS Financial Statements for the financial year ended March 31, 2026. These matters were addressed in the
context of our audit of the Standalone Ind AS Financial Statements as a whole and in forming our opinion thereon and we
do not provide a separate opinion on these matters. For the matter below, our description of how our audit addressed the
matter is provided in that context.
We have determined the matter described below to be the Key Audit Matter to be communicated in our report. We have
fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the Standalone Ind AS 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 the risks of material misstatement of the Standalone Ind AS 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 Standalone Ind AS Financial Statements.
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Key Audit Matters
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How our audit addressed the Key Audit Matter
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Assessment of contingent liabilities, provision for
litigations
As of March 31, 2026, the Company has recognized
provision of ' 244 lakhs and disclosed contingent liabilities
(to the extent not provided for) of Rs 1,169 lakhs in respect
of certain tax and other litigations.
The Company faces inquiries from tax authorities and
regulatory authorities during tax assessment and legal
proceedings during the normal course of business. There
is a high level of Management judgement required in
estimating the probable outflow of economic resources and
the level of provisioning and the disclosures required.
We considered this to be a Key Audit Matter as the
outcome of the litigations is uncertain, including ensuring
compliances with the various regulations and the positions
taken by the Management are based on the application of
material judgement, advice from tax consultants and legal
experts and interpretation of law. The ultimate outcome
of the litigations could be different from the conclusion
reached by the Management and may significantly impact
the Company's financial position.
The Company's disclosures are included in Note 2(f), Note
18, Note 35 and Note 38 to the Financial Statements which
outlines the accounting policy for provisions, contingent
liabilities and details of pending direct and indirect tax
litigation and other cases disclosed as contingent liabilities
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Our audit procedures included the following:
• We obtained an understanding and evaluated
processes and controls designed and implemented
by the Management for assessment of litigations.
• We obtained the list of taxation and other litigation
matters and communications with the authorities
and vendors. We reviewed the supporting evidence
and assessed Management's evaluation through
discussions and inquiries made on both the probability
of outcome and the magnitude of potential outflow
of economic resources;
• Where relevant, we read and relied upon the most
recent legal opinion obtained by Management from
independent tax consultants and external legal
experts to assess development in all pending cases
against the Company;
• We read recent orders received from the tax and
regulatory authorities and the Company's responses
to such communications and assessed the current
status of the litigations against the Company.
For tax matters, we involved our tax specialists to assess
Management's application and interpretation of tax
legislation affecting the Company and to consider the
quantification of exposures and settlements arising from
the disputes with the tax authorities in the various tax
jurisdictions.
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Other Information
The Company's Board of Directors is responsible for the other information. The other information comprises of the
information included in the Annual Report, but does not include the Standalone Ind AS Financial Statements and our
Auditor's report thereon.
Our opinion on the Standalone Ind AS 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 Ind AS Financial Statements, our responsibility is to read the other information
and in doing so, consider whether such other information is materially inconsistent with the 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 for the Standalone Ind AS 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 Standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial
performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with
the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under
Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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 Ind
AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or
error.
In preparing the Standalone Ind AS 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 Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS 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 Ind AS 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 Standalone Ind AS 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 Management's use of the going concern basis of accounting and based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the Financial Statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Standalone Ind AS Financial Statements including
the disclosures, and whether the Standalone Ind AS Financial Statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the Standalone Ind AS Financial Statements for the financial year ended March 31, 2026 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
1. 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 1" a statement on the matters
specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, 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 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 the paragraph 2 (i) (vi) below on reporting
under Rule 11(g);
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income,
the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement
with the books of account.
(d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Accounting Standards
specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as
amended;
(e) On the basis of the written representations received from the directors as on March 31, 2026 taken on record
by the Board of Directors, none of the directors is disqualified as on March 31, 2026 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
in the paragraph (b) above on reporting under Section 143(3)(b) and paragraph 2 (i) (vi) below on reporting
under Rule 11(g);
(g) With respect to the adequacy of the internal financial controls with reference to these Standalone Ind AS
Financial Statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure
2" to this report;
(h) In our opinion, the managerial remuneration for the year ended March 31, 2026 has been paid/provided by the
Company to its directors in accordance with the provisions of Section 197 read with Schedule V to the Act;
(i) 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 Standalone
Ind AS Financial Statements - Refer Note 18, Note 35 and Note 38 to the Standalone Ind AS 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 ended March 31, 2026.
iv. a) The Management has represented that, to the best of its knowledge and belief that 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 persons or entity, 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;
b) The Management has represented that, to the best of its knowledge and belief that no funds 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 on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed 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 (a) and (b) contain any material misstatement.
v. The final dividend paid by the Company during the year in respect of the same 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 11 to the Standalone Ind AS Financial Statements, the Board of Directors of the Company
have proposed final dividend for the year 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 has used accounting software and
payroll software for maintaining its books of account 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
software except that, audit trail feature is not enabled for accounting software with respect to direct
changes to data when using certain access rights, as described in Note 46 to the Standalone Ind AS
Financial Statements. Further, during the course of our audit we did not come across any instance of
audit trail feature being tampered with in respect of other accounting software. Additionally, the audit
trail of prior year has been preserved by the Company as per the statutory requirements for record
retention.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Aniket Sohani
Partner
Membership Number: 117142
UDIN: 26117142EGGCLI9858
Mumbai
April 20, 2026
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