We have audited the accompanying standalone financial statements of Garuda Construction and
Engineering Limited (formerly known as Garuda Construction and Engineering Private Limited) ('the
Company'), which comprise the Balance Sheet as at 31 March 2026, 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.
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 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 31 March 2026, and its profit, total
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 specified under section 143(10) of the Act ('SAs'). 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 made thereunder, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the ICAI's 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 Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the standalone financial statements of the current period. 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.
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Key Audit Matter
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How the matter was addressed in our audit
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1. Revenue recognition from engineering and
construction contracts, including measurement and
recoverability of contract assets
Refer to Note 3(i) relating to the material accounting
policy for revenue recognition, Note 10 relating to
contract assets and Note 25 relating to revenue from
operations and contract balances.
The Company recognises revenue from engineering
and construction contracts over time by applying an
input method based on the proportion of contract
costs incurred up to the reporting date to the
estimated total contract costs. Revenue from
operations for the year ended 31 March 2026
amounted to ^53,071.52 lakhs and contract assets as
at that date amounted to ^21,891.23 lakhs.
The recognition of revenue and measurement of
contract assets involve significant management
judgement and estimation, particularly in estimating
total costs to complete the contracts, determining the
stage of completion, evaluating contract
modifications, variations, claims, liquidated damages
and variable consideration, and assessing the
recoverability of contract assets. Changes in these
estimates may have a material effect on the amount
and timing of revenue and profit recognised.
Considering the magnitude of revenue and contract
assets and the significant judgements and estimates
involved, this matter was considered to be a key audit
matter.
The figures and note references are supported by
Notes 10 and 25 of the financial statements. Contract
assets increased from ^9,613.25 lakhs to ^21,891.23
lakhs during the year.
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Our audit procedures included, among others:
• Understanding and evaluating the design and
implementation of key controls over contract
acceptance, budgeting, cost recording, project
monitoring, certification, billing and revenue
recognition;
• Testing, on a sample basis, the underlying
contracts and work orders, including agreed
consideration, performance obligations, contract
modifications, variations and claims, and
examining customer certifications, invoices,
contract costs incurred and subsequent receipts;
• Evaluating the identification of performance
obligations and the appropriateness of revenue
recognition over time under Ind AS 115;
• Testing the stage of completion by examining
costs incurred against supporting documents and
evaluating management's estimates of total
contract costs and costs to complete, including
comparison of earlier estimates with actual
outcomes and revised project budgets;
• Evaluating significant contract modifications,
variations, claims, liquidated damages and
variable consideration, where applicable;
• Performing cut-off procedures and analytical
procedures over revenue, margins and contract
balances; and
• Assessing the adequacy of the disclosures relating
to revenue recognition, significant judgements
and estimates, contract assets and contract
balances in accordance with Ind AS 115
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Key Audit Matter
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How the matter was addressed in our audit
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2. Recoverability and expected credit loss assessment
of trade receivables
Refer to Note 3(g) relating to the accounting policy for
impairment of financial assets, Note 12 relating to
trade receivables and Note 35 relating to credit-risk
management and loss allowance.
Trade receivables, net of loss allowance, amounted to
^24,041.37 lakhs as at 31 March 2026. The balance
includes receivables of ^2,788.54 lakhs outstanding for
one to two years and ^498.29 lakhs outstanding for
more than three years. In addition, credit-impaired
receivables of ^139.83 lakhs have been identified by
the Company.
The assessment of recoverability and expected credit
losses involves judgement relating to customer-
specific credit risk, ageing, project status, disputes,
historical collection trends, subsequent collections and
the assumptions applied in the expected credit loss
model.
Considering the magnitude and ageing of trade
receivables and the judgement involved in
determining the loss allowance, this matter was
considered to be a key audit matter.
The ageing and allowance amounts are disclosed in
Notes 12 and 35.
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Our audit procedures included, among others:
• Evaluating the accounting policy and key controls
relating to receivable monitoring and expected
credit loss assessment;
• Obtaining external confirmations for selected
balances and performing alternative procedures
where confirmations were not received;
• Testing the ageing of receivables and reviewing
customer and project-wise collection history,
correspondence, disputes and management
assessment of recoverability;
• Examining collections received subsequent to the
reporting date for selected balances;
• Assessing the reasonableness of assumptions and
inputs used in the expected credit loss model,
including specific provisions for credit-impaired
balances; and
• Assessing the adequacy of the disclosures relating
to trade receivables, ageing, credit risk and loss
allowance in accordance with Ind AS 109.
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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 Company's annual report, but does not include the
standalone financial statements and our auditor's report thereon. The annual report is expected to be
made available to us after the date of this auditor's report.
Our opinion on the standalone financial statements does not cover the other information and we 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 when it becomes available 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. When we read the annual
report, 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 action under the applicable laws
and regulations.
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 including other comprehensive income, changes in equity and
cash flows of the Company in accordance with Ind AS and other accounting principles generally
accepted in India. This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgements 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 statements 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 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 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.
As part of an audit in accordance with SAs, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone 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 the standalone 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 the Board of Directors' 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 standalone financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on 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 standalone financial statements,
including the disclosures, and whether the standalone financial statements represent the
underlying 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 may
be influenced. We consider quantitative materiality and qualitative factors in planning the scope of our
audit work, evaluating the results of our work and evaluating 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 communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence and, where applicable, actions
taken to eliminate threats or safeguards applied.
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 section 143(11) 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 standalone financial statements comply with Ind AS specified
under section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2026
and taken on record by the Board of Directors, none of the directors is disqualified as on 31
March 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 the
standalone financial statements 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 and operating effectiveness of the Company's internal financial
controls with reference to the standalone financial statements.
3. 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, as amended, in our opinion and to
the best of our information and according to the explanations given to us:
(a) The Company has disclosed the impact of pending litigations on its financial position in the
standalone financial statements—refer Note 33 (b) of the standalone financial statements.
(b) The Company has long-term engineering and construction contracts. Based on the
information and explanations given to us, the Company did not have any material
foreseeable losses on such contracts. The Company did not have any derivative contracts for
which there were any material foreseeable losses.
(c) There were no amounts which were required to be transferred to the Investor Education and
Protection Fund by the Company.
(d)(i) The management has represented that, to the best of its knowledge and belief, other than as
disclosed in the notes 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 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.
(d)(ii) The management has represented that, to the best of its knowledge and belief, other than as
disclosed in the notes to the standalone financial statements, no funds have been received
by the Company from any person or entity, including foreign entities ('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.
(d) (iii) Based on the audit procedures that we considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the
representations under sub-clauses (d)(i) and (d)(ii) contain any material misstatement.
(e) The Company has neither declared nor paid any dividend during the year. Accordingly,
reporting on compliance with section 123 of the Act in respect of dividend is not applicable.
(f) Based on our examination, which included test checks, the Company has used Tally Edit Log
for maintaining its books of account for the financial year ended 31 March 2026. The
software has a feature for recording an audit trail (edit log), and the feature operated
throughout the year for all relevant transactions recorded in the software. Further, during
the course of our audit, we did not come across any instance of the audit-trail feature being
tampered with. The audit trail has been preserved by the Company in accordance with the
statutory requirements for record retention.
4. With respect to the matter to be included in the Auditor's Report under section 197(16) of the
Act, in our opinion and according to the information and explanations given to us, the
remuneration paid by the Company to its directors during the current year is in accordance
with the provisions of section 197 of the Act. The remuneration paid to any director is not in
excess of the limit laid down under section 197 of the Act. The Ministry of Corporate Affairs
has not prescribed other details under section 197(16) which are required to be commented
upon by us.
For Agarwal Tibrewal & Co
Chartered Accountants
(Firm Registration No. 328977E)
CA Amit Agarwal
Partner
Membership No. 303411
Place: Mumbai
Date: 18th May 2026
UDIN: 26303411OAQZIR3328
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