Act read with Companies (Indian Accounting Standards)
Rules, 2015, as amended ("Ind AS") and other accounting
principles generally accepted in India, of the state of affairs
of the Company as at March 31, 2025, and profit (including
other comprehensive income), changes in equity and its cash
flows for the year ended on that date.
We have audited the accompanying standalone financial
statements of Precision Camshafts Limited ("the Company"),
which comprise the Balance Sheet as at March 31, 2025,
and the Statement of Profit and Loss, including Other
Comprehensive Income, Statement of Changes in Equity
and Statement of 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 the "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 ("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
BASIS FOR OPINION
We conducted our audit of the standalone financial statements
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 ("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 obtained by us is sufficient and appropriate to
provide a basis for our opinion.
KEY AUDIT MATTER
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 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 matter described below to be the key audit matter to be
communicated in our report.
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Sr.
No
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Key Audit Matter
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How the Key Audit Matter was addressed in our audit
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1
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Provision for Impairment of Investment in subsidiaries
Refer Note 5A of financial statement with respect to
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Our audit procedures in respect of this area include but are not
limited to:
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the disclosures of Investment in subsidiaries. On March
31, 2025, Investment in subsidiaries amounted to INR.
16,270.84 lakhs against which provision of INR. 7,300
lakhs was made towards impairment in the books of
account.
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1.
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Obtained an understanding of the Company's accounting
policy on assessment of impairment of investments in
subsidiaries and application of assumption used by the
management, including design and implementation of
controls over the same.
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In accordance with Ind AS 36-"Impairment of Assets",
at each reporting period end, management assesses
the existence of impairment indicators of investments
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2.
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Tested the operating effectiveness of the internal controls
over the process of valuation and impairment of investments
in subsidiaries.
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in subsidiaries. The processes and methodologies for
assessing and determining the recoverable amount of
each investments are based on complex assumptions,
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3.
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Obtained and reviewed the valuation report issued by the
Company's independent valuation expert, and assessed the
expert's competence, capability and objectivity.
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Sr.
No
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Key Audit Matter
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How the Key Audit Matter was addressed in our audit
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that by their nature imply the use of the management's
judgments & estimation uncertainty, in particular with
reference to identification of impairment indicators,
forecast of future cash flows relating to the period
covered by the Company's strategic business plan,
normalized cash flows assumed as a basis for terminal
value, as well as the long-term growth rates and discount
rates applied to such forecasted cash flows.
Since the amount of provision for impairment is material
and involves significant management judgement and
estimation uncertainty, we have identified provision for
impairment of investment in subsidiaries as a key audit
matter.
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4. Assessed the appropriateness of the valuation methodology
applied and reasonableness of the assumptions used i.e.
the discount rate and long-term growth rates used in the
forecast.
5. Verified completeness, arithmetical accuracy and validity of
the data used in the calculations.
6. Assessed reasonableness of the future revenue and margin
projections, by reviewing the historical accuracy of the
Group's estimates and its ability to produce accurate long¬
term forecasts.
7. Assessed the Company's sensitivity analysis and evaluated
whether any reasonably foreseeable change in assumptions
could lead to impairment or material change in carrying
value of Investment in Subsidiaries.
8. Assessed the completeness and accuracy of the disclosures
in accordance with the requirements of the relevant Ind AS,
which are included in Note 5A of the standalone financial
statements.
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INFORMATION OTHER THAN THE STANDALONE
FINANCIAL STATEMENTS AND AUDITOR'S REPORT
THEREON
The Company's Board of Directors is responsible for the other
information. The other information comprises the Director's
report including to annexure to Directors' report but does not
include the standalone 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 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 AND THOSE
CHARGED WITH GOVERNANCE FOR THE STANDALONE
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 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 statement that give
a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the standalone financial statements, the
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 the 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 is also responsible for overseeing the
Company's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE
STANDALONE FINANCIAL STATEMENTS
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.
We give in "Annexure A" a detailed description of Auditor's
responsibilities for Audit of the Standalone Financial
Statements.
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 "Annexure B" 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
except for the matters stated in the paragraph 2(h)
(vi) below on reporting under Rule 11(g).Further, in
the absence of sufficient appropriate audit evidence
in the form of independent service auditor's report
of the service organisation in relation to software
used by the Company for maintaining its books
of accounts for payroll processing/records we
are unable to comment whether back-up of the
books of account and other books and papers
maintained in electronic mode, have been kept in
servers physically located in India on a daily basis
in relation to payroll processing.
(c) The Balance Sheet, the Statement of Profit and
Loss including other comprehensive income, the
Statement of Changes in Equity and the Statement
of Cash Flow 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 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, 2025
taken on record by the Board of Directors, none
of the directors are disqualified as on March 31,
2025 from being appointed as a director in terms
of Section 164 (2) of the Act.
(f) The reservation relating to the maintenance of
accounts and other matters connected therewith
are as stated in paragraph 2(b) above on reporting
under Section 143(3)(b) and paragraph 2(h)(vi)
below on reporting under Rule 11(g).
(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 C".
(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 32(b) 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.
iv. 1. 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, 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.
2. 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
(FundingParties), with the understanding,
whether recorded in writing or otherwise,
as on the date of this audit report, that
the Company shall, 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.
3. Based on the audit procedures performed
that have been considered reasonable
and appropriate in the circumstances,
and according to the information and
explanations provided to us by the
Management in this regard 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 (1) and (2) above, contain
any material mis-statement.
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 Companies Act 2013 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 dividend
declared is in accordance with section 123 of
the Act to the extent it applies to declaration
of dividend. (Refer Note 30 to the Standalone
financial statements.
vi. a. Based on our examination which included
test checks, the Company has used an
accounting software for maintaining its
books of accounts which has a feature
of recording audit trail (edit log) facility,
except that no audit trail feature was
enabled at the database level to log any
direct data changes as explained in Note
58 to the financial statements.
Further, where enabled, audit trail
feature has been operated for all relevant
transactions recorded in the accounting
software. Also, during the course of our
audit, we did not come across any instance
of audit trail feature being tampered with
in respect of such accounting software.
Additionally, the audit trail of prior year
has been preserved by the Company as
per the statutory requirements for record
retention to the extent it was enabled
and recorded in the previous year.
b. Based on our examination which included
test checks, the Company has used an
accounting software for maintaining its
payroll records, which is managed and
maintained by a third-party software
service provider as explained in Note 58
to the financial statements. However, in
absence of adequate coverage in SOC
report of the said software we are unable
to comment whether the said accounting
software has a feature of recording audit
trail (edit log) facility and whether the
same has operated throughout the year
for all relevant transactions recorded
in the software or whether there is any
instance of audit trail feature being
tampered with. Additionally, we are
unable to comment whether the audit
trail of prior year has been preserved as
per the statutory requirements for record
retention.
3. In our opinion, according to information, explanations
given to us, the remuneration paid by the Company to
its directors is within the limits laid prescribed under
Section 197 read with Schedule V of the Act and the
rules thereunder.
For M S K A & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Nitin Manohar Jumani
Partner
Place: Pune Membership No. 111700
Date: May 27, 2025 UDIN: 25111700BMKSGW7042
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