We have audited the accompanying financial statements of Eimco Elecon (India) Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2025, 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 financial statements, including material accounting
policy information and other explanatory information (hereinafter referred to as "the financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 specified under section 133 of the Act read with the 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 total comprehensive income (comprising of profit and 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 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 Auditors' Responsibilities for the Audit of the 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 made 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 financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of these financial
statements of the current period. These matters were 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.
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KEY AUDIT MATTER
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HOW OUR AUDIT ADDRESSED THE MATTER
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Existence and valuation of investments
(Refer to note 6 & 10 to the financial statements)
Total investments of Rs.22,600.61 Lakhs represent 46.31% of
total assets of the company. These investments mainly consist
of current and non-current investments in mutual funds. Valuation
of the investments is done at fair market value at each balance
sheet date. Thus, being very high proportion of total assets of the
company as well as high amount of gain or loss credited / debited
to statement of profit and loss account, made us conclude that
existence and valuation of investments are a key audit matter
of our audit.
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Our audit procedures to test the existence of the investments
mainly consist of verifying quantity / unit balances and
market values with demat statement / statements of
respective assets management companies as well as
verifying the relevant recording of gain or loss in value of
respective investments at each balance sheet date.
Conclusion:
Based on the procedures described we consider the
disclosure of investments value as current as well as
non-current and recording of gain or loss on the same as
acceptable.
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KEY AUDIT MATTER
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HOW OUR AUDIT ADDRESSED THE MATTER
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Litiaations and claims
(Refer to note 39 to the financial statements)
The cases are pending with tax authorities like Income Tax and
Excise.
In normal course of business, financial exposures may arise from
pending proceedings and from litigation and claims. Whether
a claim needs to be recognised as liability or disclosed as
contingent liability in the financial statements is dependent on
number of significant assumptions and judgments. The amounts
involved are potentially significant and determining the amount,
if any, to be recognised or disclosed in the financial statements,
is inherently subjective.
We considered the above area as a key audit matter due to
associated uncertainty related to the outcome of these matters
and application of material judgement in interpretation of law.
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Our audit procedures, inter alia, included the following:
• Evaluation of management's judgment of tax
risks, estimates of tax exposures, other claims and
contingencies. Past and current experience with the tax
authorities and management's response on the subject
matter were used to assess the appropriateness
of management's best estimate of the most likely
outcome of each uncertain contingent liability.
• Understanding the current status of the tax assessments
& other litigations and discussing selected matters with
the entity's management.
• Assessing the entity's assumptions and estimates in
respect of claims, included in the contingent liabilities
disclosed in the financial statements.
• Assessment of the probability of negative result of
litigation and the reliability of estimates of related
obligations.
Conclusion:
Based on procedure described above, we did not identify any
material exceptions relating to management's assertions, and
treatment, presentation and disclosure of the subject matter
in the financial statements.
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Information Other than the Financial Statements and Auditors' Report Thereon
The Company's Board of Directors is responsible for preparation of the other information. The other information comprises the
information included in the Board's Report including Annexures to Board's Report, Management Discussion and Analysis, Corporate
Governance Report and Shareholder's Information but does not include the financial statements and our auditors' report thereon. The
above-referred information is expected to be made available to us after the date of this audit report.
Our opinion on the 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 financial statements, our responsibility is to read the other information identified above when it
becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the information, which we will obtained after the date of auditors' report and if we conclude that there is a material
misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions
necessitated by the circumstances and the applicable laws and regulations.
Responsibilities of Management and Those Charged with Governance for the 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 financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income,
changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including
the Indian Accounting Standards (Ind AS) prescribed 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 statements 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 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.
The Board of Directors is also responsible for overseeing the Company's financial reporting process.
Auditors' 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 auditors' 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 judgment 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 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 auditors' 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 auditors' 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 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 financial statements of the current period and are therefore the key audit matters. We describe these matters in our
auditors' report unless law or regulation precludes public disclosure about the matters 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 "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 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;
d. in our opinion, the aforesaid financial statements comply with the Ind AS prescribed 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 is disqualified as on March 31, 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 with reference to financial statements of the Company and
the operating effectiveness of such controls, refer to our separate report in "Annexure B";
g. with respect to the other matters to be included in the Auditors' 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;
and
h. with respect to the other matters to be included in the Auditors' 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 financial statements -
Refer Note 39 to the financial statements;
ii. the Company did not have any long-term contracts including derivative contracts as at March 31, 2025 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. (a) The management has represented that, to the best of its knowledge and belief, no funds (which are material
either individually or in the aggregate) 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 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, no funds (which are material
either individually or in the aggregate) have been received by the Company from any person or entity, including
foreign entity ("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;
(c) Based on the audit procedures 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) as provided under (a) and (b) above, contain any material misstatement.
v. As stated in Note 17.2 to the financial statements
(a) The final dividend proposed in the previous year, declared and paid by the Company during the year is in
accordance with Section 123 of the Act, as applicable.
(b) The Board of Directors of the Company has 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 for maintaining
its books of account which has the feature of recording audit trail (edit logs) facility. The payroll software has
been introduced and made live from June 01, 2024. The accounting software for maintaining its books of account,
excluding payroll software, has operated throughout the year for all relevant transactions. Since the Payroll Software
has been implemented w.e.f. June 01, 2024, an audit trail feature has been active from that date. During our audit,
we did not observe any instances of tampering with the audit trail features. Furthermore, the audit trails generated
by the accounting software (excluding Payroll software) have been preserved by the Company in accordance with
the applicable statutory record retention requirements.
Since the payroll software was implemented and made operational from June 1,2024, the requirement to preserve
the audit trail in accordance with statutory record retention requirement is not applicable for the financial year ending
March 31, 2025.
For K C Mehta & Co LLP
Chartered Accountants
(Firm's Registration No. 106237W/W100829)
Neela R. Shah
Partner
Place : Vallabh Vidyanagar Membership No. 045027
Date : 23rd April, 2025 UDIN:- 25045027BMJBEW9096
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