We have audited the accompanying standalone financial
statements of Precision Camshafts Limited ("the Company"),
which comprise the Balance Sheet as at March 31, 2026,
and the Statement of Profit and Loss (including Other
Comprehensive Income), the Statement of Changes in Equity
and the 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
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, 2026, and its profit (including
other comprehensive income), changes in equity and its cash
flows for the year ended on that date.
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 SAs 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
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, 2026. 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.
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Key Audit Matters
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How the Key Audit Matters was addressed in our audit
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1
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Assessment of Provision for Impairment of Investment
in subsidiaries
Refer Note 5A of financial statement with respect to
the disclosures of Investment in subsidiaries. On March
31, 2026, Investment in subsidiaries amounted to INR
16,270.84 lakhs against which provision of INR 10,300
lakhs is being carried towards impairment provision in the
books of account.
In accordance with Ind AS 36-"Impairment of Assets",
at each reporting period end, management assesses
the existence of impairment indicators of investments
in subsidiaries. The processes and methodologies for
assessing and determining the recoverable amount of
each investments are based on complex assumptions,
that by their nature imply the use of the management's
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Our audit procedures in respect of this area include but are
not limited to:
1. 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.
2. Tested the operating effectiveness of the internal
controls over the process of valuation and impairment
of investments in subsidiaries.
3. Obtained and reviewed the valuation report issued by
the Company's independent valuation experts, and
assessed the expert's independence, competence,
capability and objectivity.
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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 investment in subsidiaries is material
and assessment of provision for impairment involves
significant management judgement and estimation
uncertainty, we have identified assessment of 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 impact the value in use
and the recoverability of investments 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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2
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Assessment of Provision for impairment of Loans given
to Subsidiary companies
Refer note 5B of financial statement with respect to
the disclosures of loans given to subsidiaries. On March
31, 2026, loan given to subsidiaries amounted to INR
9,261.06 lakhs against which provision of INR 2,745 lakhs
were made towards impairment in the books of account.
In accordance with Ind AS 36 -"Impairment of Assets"
at each reporting period end, management assesses the
existence of impairment indicators and evaluates the
expected credit loss on loans granted to subsidiaries.
The processes and methodologies for assessing and
determining the recoverable amount of such loans
are based on complex assumptions, which by their
nature involve significant management judgement and
estimation uncertainty, particularly with reference to
the financial performance and business prospects of the
subsidiaries, forecast of future cash flows, repayment
capacity, expected timing of recovery, and the discount
rates applied to such forecasted cash flows.
Since the amount of loans to subsidiaries is material and its
impairment assessment involves significant management
judgement and estimation uncertainty, we have identified
assessment of provision for impairment of loans granted
to subsidiaries as a key audit matter.
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Our audit procedures in respect of this area include but are
not limited to:
1. Obtained an understanding of management's process
for assessing the recoverability of loans granted to
subsidiaries.
2. Evaluated the design and implementation of key
controls over the impairment assessment process.
3. Assessed management's determination of whether
there were indicators of impairment and the
appropriateness of the expected credit loss (ECL)
methodology applied.
4. Reviewed the subsidiary's latest audited financial
statements, management accounts, budgets, and
cash flow forecasts to assess its ability to repay the
loan.
5. Evaluated the reasonableness of key assumptions
used in forecasts, including projected revenues,
profitability, growth rates, and cash flows.
6. Assessed the financial position and net worth of
the subsidiary and considered the availability of
underlying assets and future cash generation capacity.
7. Tested the mathematical accuracy of the impairment
calculations.
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8. Performed sensitivity analyses on significant
assumptions where considered necessary.
9. Evaluated the adequacy of disclosures in the
financial statements relating to the loan, impairment
assessment, and key judgments made by management.
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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 information
included in the Director's report (including Annexure) but
does not include the standalone financial statements and our
auditor's report thereon, which we obtained prior to the date
of this auditor's report.
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
identified above 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 on the other
information that we obtained prior to the date of this auditor's
report, 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 BOARD
OF DIRECTORS FOR THE STANDALONE FINANCIAL
STATEMENTS
The Company's Management and Board of Directors are
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 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 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 the Board of Directors of the Company 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 REGULATORYREQUIREMENTS
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 of the aforesaid standalone
financial statements.
(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).
(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 Flows dealt with by this Report are in
agreement with the books of account maintained
for the purpose of preparation of the standalone
financial statements.
(d) In our opinion, the aforesaid standalone financial
statements comply with the Ind AS specified under
Section 133 of the Act.
(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 are 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 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 to the standalone financial
statements.
ii. The Company did not have any long-term
contracts including derivative contracts.
iii. There has been no delay in transferring
amounts, 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 it's knowledge and
belief, as disclosed in the note 51 to
the standalone financial statements, 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.
b. The Management has represented that,
to the best of its knowledge and belief, as
disclosed in the note 51 to the standalone
financial statements, 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, 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.
c. Based on the 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 (i)
and (ii) of Rule 11(e) 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 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 in respect
of an accounting software 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 years
has been preserved by the Company as
per the statutory requirements for record
retention to the extent it was enabled
and recorded in prior years.
b. Based on examination which included
test checks, the Company has used
accounting software for maintaining
its payroll records (managed and
maintained by a third-party software
service provider) which has a feature of
recording audit trail (edit log) facility and
the same has been operated throughout
the year for all relevant transactions
recorded in the software except that
we are unable to comment on audit
trail at database level due to absence
of adequate coverage in SOC report,
as explained in Note 58 to the financial
statements.
Further, except for above, audit trail
feature has operated throughout the year
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 to the extent it
was enabled. Additionally, the audit
trail of prior year(s) has been preserved
by the Company as per the statutory
requirements for record retention to the
extent it was enabled and recorded in
prior years.
3. In our opinion and according to information, explanations
given to us, the remuneration paid or provided by the
Company to its directors during the year ended March
31, 2026, is in excess of the limits prescribed under
Section 197 read with Schedule V to the Companies
Act, 2013 by INR 131.88 lakhs. As described in Note 53
to the accompanying standalone financial statements,
the Company is in the process of obtaining requisite
approval of the shareholders by way of special resolution
in respect of the aforesaid excess remuneration.
For M S K A & Associates LLP
(Formerly known as M S K A & Associates)
Chartered Accountants
ICAI Firm Registration No. 105047W/W101187
Yogesh Yewale
Partner
Place: Mangalwedha Membership No.: 158877
Date: May 22, 2026 UDIN: 26158877AHBYLE5664
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