We have audited the accompanying standalone financial statements of Azad Engineering 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 Matter
Key audit matter is the matter that, in our professional judgment, were of most significance in
our audit of the Standalone financial statements of the current year. This matter was addressed in the context of our audit
of the 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.
Revenue Recognition - (Refer note 2.2 (A) of Standalone Financial Statements):
Revenue is a key performance measure for the Company. Revenue of the Company mainly comprise of sale of goods
or services to its customers.
Company recognises revenue from sale of goods or services, based on the terms and conditions of transactions which
varies with different customers, at a point in time upon the Company satisfying its performance obligation and the
customer obtaining control of the underlying asset.
In respect of sale transactions executed, there exists significant audit risk with respect to performance obligations
whether the control of goods has transferred to the customers and there are no unfulfilled obligations in regard to these
sales. Accordingly, cut off for revenue recognition is considered as a significant account balance for audit consideration.
How the Key Audit Matter was addressed in our audit: Our audit procedures in respect of this matter included the
following but not limited to:
1. Evaluated the appropriateness of the Company's revenue recognition accounting policies as required under the
applicable accounting standards.
2. Obtained an understanding of process and tested the design, implementation and operating effectiveness of key
controls around the timely and accurate recording of revenue transactions.
3. Obtained and evaluated customer contracts to assess the basis of revenue recognition and verified, on a sample
basis, the underlying supporting documents evidencing transfer of control and fulfilment of performance obligations
in accordance with the terms of the contracts and applicable accounting standards.
4. Ensured completeness and existence assertion by performing substantive testing on selected samples of revenue
transactions recorded during the year by testing the underlying documents including contracts, invoices, goods
dispatch notes and shipping documents, wherever applicable and obtaining independent balance confirmation
from the customers at the balance sheet date.
5. Obtained evidence in respect of revenue transactions recorded near balance sheet date, to determine
appropriateness of timing of revenue recognition, based on underlying documents and evidence for transfer of
control and fulfilment of performance obligations.
6. Performed analytical procedures on revenue recognized during the year to identify any unusual trends or variances,
and obtained explanations and supporting evidence for significant fluctuations noted.
7. Tested, on a sample basis, journal entries relating to revenue recognition to assess the appropriateness of entries
recorded.
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 and Corporate Governance Report 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, and the
Chairman's statement and Business Responsibility and Sustainability Reporting, which is expected to be made available
to us after that date.
Our opinion on the standalone financial statements does not cover the other information and we do not and will 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.
When we read the Chairman's statement and Business Responsibility and Sustainability Reporting, if we conclude that
there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
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 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 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 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) 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".
(g) 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).
(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 30 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 are no amounts which are 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 it's knowledge and belief, as disclosed in
the note 43(e) 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 it's knowledge and belief, as disclosed in the
note 43(f) 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 mis-statement.
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 an accounting software
for maintaining its books of account 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 43(p) to the standalone 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 previous year.
3. In our opinion, according to information and explanations given to us, the remuneration paid or provided by the
Company to its directors is within the limits prescribed under Section 197 read with Schedule V of the Act and the
rules thereunder.
For M S K A & Associates LLP
(Formerly known as M S K A & Associates)
Chartered Accountants
ICAI Firm Registration No. 105047W/W101187
Ananthakrishnan Govindan
Partner
Place : Hyderabad Membership No.:205226
Date : May 15, 2026 UDIN: 26205226NNJFSN3027
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