We have audited the standalone financial statements of RAJOO ENGINEERS LIMITED ("the Company"),
which comprise the Balance sheet as at March 31, 2025, the Statement of Profit and Loss, including the
statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in
Equity for the year then ended, and notes to the Standalone Financial Statements, including a summary of
significant accounting policies and other explanatory information ("Standalone Financial Statements").
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, as amended
("the Act") in the manner so required and give a true and fair view in conformity with the Indian accounting
standards prescribed under section 133 of the act, ("Ind AS") and the accounting principles generally
accepted in India, of the state of affairs of the Company as at March 31, 2025, its profit including other
comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10)
of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's
Responsibilities for the Audit of the Financial Statement 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 Companies Act, 2013 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
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the Standalone Financial Statements for the financial year ended March 31, 2025. 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.
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
Standalone 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 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 Financial Statements.
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Key Audit Matters
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How the matter was addressed in
our audit We have:
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As at March 31,2025, the Company has recognised
a warranty provision of INR 24.24 Lakhs, based on
management's best estimate of future outflows for
product warranties. This estimate involves significant
judgment due to uncertainties relating to :
1. Historical claim trends, which may not reflect
future patterns.
2. Variability in repair/replacement costs.
3. Product lifecycles and warranty durations.
4. Technological changes affecting defect
rates.
5. Volume of sales influencing claim frequency.
Due to the significant judgment involved, any
change in assumptions or actual claim trends may
materially impact the warranty provision in future
periods. Hence, it has been identified as a Key Audit
Matter.
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Our audit procedures, in conjunction with our
understanding of the Company's business and
industry, included:
1. Understanding management's methodology
and use of historical data to project future
claims.
2. Evaluating the reasonableness of key
assumptions (claim rates, cost per claim)
through data verification, trend analysis, and
industry benchmarking.
3. Testing the mathematical accuracy of the
provision model.
4. Performing sensitivity analysis to understand
the impact of changes in assumptions.
5. Reviewing post-balance sheet events to
validate estimates.
6. Ensuring disclosures comply with Ind AS 37,
including clarity on key judgments and
assumptions.
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As at March 31, 2025, the Company's investment in
Rajoo Bausano Extrusion Private Limited is accounted
for under the equity method as per Ind AS 28. In
accordance with Ind AS 36, management assessed
impairment using the value-in-use method, which
involves significant judgment and estimation
uncertainty particularly relating to :
1. Future Revenue Growth Rates are based on
projections of sales volumes and pricing, impacted
by market trends and industry demand.
2. Operating margins are estimated by
analyzing expected cost structures and potential
improvements in operational efficiency.
3. Discount Rate is determined using a suitable
pre-tax rate reflecting time value and risk specific to
the joint venture.
4. Terminal Growth Rate, applied beyond the
explicit forecast period for long-term projections.
Due to the complexity and sensitivity of these
assumptions, and their potential material impact on
the impairment outcome, this has been identified as
a Key Audit Matter.
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Our audit procedures, in conjunction with
reasonableness of management's
impairment assessment, included :
1. Reviewed the methodology, controls and
basis for cash flow projections as part of
understanding management's process.
2. Assessed revenue growth, margins, discount
rate and terminal growth against historical
data, budgets and market trends while testing
the model's accuracy.
3. Performed independent sensitivity checks on
key assumptions to evaluate the risk of
impairment.
4. Verified assumptions through board minutes,
business plans and discussions with JV
management.
5. Assessed whether the financial statement
disclosures under Ind AS 36 were adequate,
particularly around impairment estimates,
assumptions and sensitivity analyses
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Key Audit Matters
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How the matter was addressed in
our audit We have:
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As at March 31,2025, the Company has recognised
a gratuity liability of INR 335.74 Lakhs based on an
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Our audit procedures, included :
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actuarial valuation in line with Ind AS 19. The
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1. Reviewed how the actuary was engaged, data
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valuation process involves complex actuarial
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was shared, and the draft report was reviewed as
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assumptions and significant management
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part of understanding the process.
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judgment, including factors like discount rates, salary
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2. Assessed the qualifications, experience, and
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escalation, attrition, and mortality rates.
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independence of M/s K. A. Pandit Actuaries and
Advisors to evaluate the actuary's competence.
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The actuarial valuation report, prepared by M/s K. A.
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3. Verified the accuracy of employee data used in
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Pandit Actuaries and Advisors, was in draft and
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the valuation through sample checks during the
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unsigned form at the time of audit completion. This
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data review.
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introduced uncertainty, as the absence of a signed
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4. Assessed key assumptions such as discount rate
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report implies the actuary has not formally endorsed
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and salary escalation against market data and
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the assumptions and results. Due to the materiality of
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discussed their rationale with management and
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the liability and reliance on estimates, this required
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the actuary.
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enhanced audit focus to verify the accuracy and
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5. Inquired into the draft report status and obtained
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adequacy of the reported amount and disclosures.
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management representation confirming that no
material changes are expected.
6. Performed independent recalculations and
sensitivity analysis on key assumptions to validate
results.
7. Ensured that financial statement disclosures
comply with Ind AS19, which mandates
disclosure of the defined benefit obligation,
actuarial assumptions, methods, sensitivity
analysis results, and related risks
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Information Other than the Financial Statements and Auditor’s Report thereon
The Company's Board of Directors is responsible for the other information. The other information comprises
the information included in the Management Discussion and Analysis, Board's Report including Annexures to
Board's Report, Business Responsibility and Sustainability Report, Corporate Governance and Shareholder's
Information, but does not include the consolidated financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other
information and in doing so, consider whether the other information is materially inconsistent with the
standalone financial statements, or our knowledge obtained 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.
The Company's Board of Directors are responsible for the matters stated in section 134(5) of the Companies
Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true
and fair view of the financial position, financial performance of the Company in accordance with the
accounting principle generally accepted in India, including the 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 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 statement 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 are 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 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 the 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 judgement and maintain professional
skepticism throughout the audit. We also :
• Identify and assess the risks of material misstatement of the 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 on resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the over-ride 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 Companies Act, 2013, we are also
responsible for expressing our opinion on whether the company has adequate internal financial controls
system 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 financial statements, including the
disclosures, and whether the financial statements represent the under lying transactions and events in a
manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in
aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the
standalone financial statements may be influenced. We consider quantitative materiality and qualitative
factors in: (i) Planning the scope of our audit work and in evaluating the results of our work; and (ii) To evaluate
the effect of any identified misstatements in the standalone financial statements.
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 be a threat to 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 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
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 Companies Act, 2013,we give in the
"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable.
2. 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.
(c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other
Comprehensive Income and Standalone Statement of Cash Flows dealt with by this Report are in
agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31stMarch, 2025 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) With respect to the adequacy of the internal financial controls over financial reporting 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 operating effectiveness of the
company's internal financial controls over financial reporting.
(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 to the best of our
information and according to the explanations given to us, the remuneration paid by the Company
to its directors during the 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, in our opinion and to the best of our information and
according to the explanations given to us :
i. The Company does not have any pending litigations which would impact its financial position.
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.
iv. The Management has represented that, to the best of its knowledge :
a. no funds have been advanced or loaned or invested by the company to or in any other
person(s) or entities, including foreign entities ("Intermediaries"), with the understanding that
the intermediary shall whether directly or indirectly lend or invest in other persons or entities
identified in any manner by or on behalf of the company (Ultimate Beneficiaries) or provide any
guarantee, security or the like on behalf of ultimate beneficiaries.
b. no funds have been received by the company from any person(s) or entities including foreign
entities ("Funding Parties") with the understanding that such 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 guarantee, security or the like on
behalf of the Ultimate beneficiaries.
c. Based on such audit procedures as 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 iv(a) and iv(b) contain any material mis-statement.
v. As stated in Note 10 to the Standalone Financial Statements
• 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.
• 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 amount of dividend
proposed is in accordance with section 123 of the Act, as applicable.
vi. Based on our examination, which included test checks, the Company has used accounting software
systems for maintaining its books of account for the financial year ended March 31,2025 which have the
feature of recording audit trail (edit log) facility and the same has operated throughout the year for all
relevant transactions recorded in the software systems. Further, during the course of our audit we did not
come across any instance of the audit trail feature being tampered with and the audit trail has been
preserved by the Company as per the statutory requirements for record retention.
For, Rushabh R Shah and Co.
Chartered Accountants
FRN : 156419W
Rushabh Shah
Proprietor
M.[\IO. : 607585 Date : 24th April, 2025
UDIN : 25607585BMKPLV1181 Place: Rajkot
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