We have audited the accompanying financial statements of Sahyadri Industries Limited (the “Company”), which comprise the Balance
Sheet as at March 31, 2026, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in
Equity, and the Statement of Cash Flows for the year then ended and notes to the financial statements, including a summary of the
material accounting policies 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 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 March 31, 2026 and its profit and other comprehensive income, changes in equity and cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the standards on auditing as 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 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 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 (KAM) are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements for the financial year ended March 31, 2026. 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. For each matter
below, our description of how our audit addressed the matter is provided in that context.
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Sr.
No.
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Key Audit Matters
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How our audit addressed the key audit matter
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1.
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Ind AS 115 Revenue from Contracts with Customer
The Company recognises revenue from sale of goods when it satisfies
its performance obligation, in accordance with the principles of Ind
AS 115, Revenue from Contracts with Customers, by transferring the
control of goods to its customers at the time of dispatch evidenced by
acknowledgement of receipt of goods by the transporter.
Further, Ind AS 115, requires management to make certain key
judgements, such as, identification of distinct performance obligations
in contracts with customers, determination of transaction price for the
contract factoring in the consideration payable to customers (such
as rebates and discounts) and selection of a method to allocate the
transaction price to the performance obligations.
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Audit Procedures Performed
Our audit procedures, related to revenue recognition,
included, but were not limited, to the following:
• Assessed the design and operating effectiveness
of Company's controls (including the automated
controls) around revenue recognition (including
rebates / discounts);
• Assessed the appropriateness of Company's
identification of performance obligations in its
contracts with customers, its determination of
transaction price, and accounting policies for
revenue recognition in accordance with the
accounting principles laid down in Ind AS 115;
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Sr.
No.
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Key Audit Matters
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How our audit addressed the key audit matter
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1.
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Ind AS 115 Revenue from Contracts with Customer
Owing to the volume of sales transactions, size of distribution
network and varied terms of contracts with customers, in line
with the requirements of the Standards on Auditing, revenue
is determined to be an area involving significant risk and
hence requiring significant auditor attention.
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Audit Procedures Performed
• Scrutinized sales ledgers to verify completeness of sales
transactions;
• On a sample basis, tested the revenue recognized including
testing of cut off assertion as at the year end. Our testing
included tracing the information to agreements, price lists,
invoices, proof of dispatches and approved incentives /
discounts schemes;
• Tested the appropriateness of accruals for various rebates
and discounts as at the yearend;
• Assessed the revenue recognized with substantive
analytical procedures including review of price, quantity
and product mix variances and analysis of discounts at
customer level;
• Circularized balance confirmations (including transactions
during the year) to a sample of customers and reviewed
the reconciling items, if any; and
• Tested the related disclosures made in notes to the financial
statements in respect of the revenue from operations.
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2.
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Inventories
Inventory represents 34.34% of total assets of the Company
as at March 31, 2026. Such Inventory is held across various
factories as at the reporting date.
Considering the number of locations and the level of inventory
held across its factories as well as the physical verification
of inventory at these locations on different dates, the risk
of existence of such inventory and the identification of non¬
moving, obsolete / damaged inventory is a significant area
of audit importance. The inventory valuation also requires
management estimates towards write down of inventory
items to its net realizable value (wherever applicable) and
allowance for slow moving or non-moving inventory.
Considering the relative significance of the Inventory to the
financial statements, we have considered the existence and
allowance for inventory obsolescence of inventory as key
audit matter.
As described in Note 2.09 of the financial statements.
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Audit Procedures Performed
Our audit response in respect of testing the existence of
inventories and allowance for slow / non-moving inventory
and obsolescence consisted of following procedures (as
applicable in each case):
• Procedures to test the existence of inventories consisted
of testing the relevant internal controls, including in specific
the testing of the inventory physical verification process
that is performed annually by management at various
locations and the testing of automated recording of sales
and purchase transactions in the IT system.
• We observed the physical verification of Inventory
conducted by management at certain locations selected
by us. Our procedures in this regard included:
- Observing compliance of stock count instructions by
management personnel; observing steps taken by
management to ascertain the existence inventory on
the date of the count (including identification of non¬
moving, obsolete / damaged inventory);
- Performing independent inventory counts on sample
basis and reconciling the same to the management
counts (wherever applicable);
- On a sample basis, testing the reconciliation of the
differences in inventory quantity between the physical
count and the books of accounts, including accounting
of such variances and
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Sr.
No.
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Key Audit Matters
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How our audit addressed the key audit matter
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2.
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Inventories
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Audit Procedures Performed
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- Roll-forward procedures on sample basis from date of
count to the reporting date as the physical verification of
inventory was undertaken by management on different
dates across various locations during the year.
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• We performed cut off testing for purchase and sales
transactions made near the reporting date to assess
whether transactions are recorded in the correct period
by testing shipping records, sales / purchase invoices (as
applicable), for sample transactions.
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• We tested whether the adjustments to bring down the
cost of inventory items to their net realisable value and
allowance for slow moving or non-moving inventory and
obsolescence at the reporting date is appropriate by
assessing the methodology and assumptions adopted
by management in this regard including the related
adjustments by testing a sample of inventory items as at
the reporting date.
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Information Other than the Financial Statements and Auditor's Report Thereon
The Company's management and Board of Directors are responsible for the other information. The other information comprises the
information included in the Company's annual report but does not include the Financial Statements and our auditor's report thereon.
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 and, in doing so, consider
whether such other information is materially inconsistent with the financial statements or our knowledge obtained during the course of
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 for the Ind AS Financial Statements
The Company's management and Board of Directors are responsible for the matters stated in sub-section 5 of Section 134 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
(including other 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) specified under Section 133 of the Act, read with the
Companies (Indian accounting standards) Rules 2015, as amended from time to time. 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 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 are also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibility 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 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 financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism 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 system 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 the Management and Board of Directors.
• 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 auditor's 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 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 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 for the financial year ended March 31, 2026 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 enclose in the ‘Annexure A', a statement on the matters specified in paragraphs 3 and 4 of
the Order.
2. (A) 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 accounts 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), 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 Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the Directors of the Company as on March 31, 2026, taken on
record by the Board of Directors of the Company, none of the Directors of the Company 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 controls over financial reporting 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 over financial reporting.
2.(B) 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 as of March
31, 2026 (Refer note 35.1 of 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. 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
entity (“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 52 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) There was no interim dividend declared and paid by the Company during the year and until the date of this report.
(c) Board of Directors of the Company have proposed a 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. The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is applicable from 1 April 2023, based
on our examination which included test checks, except for the instances mentioned below, the Company has used accounting
software for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same
has operated throughout the year for all relevant transactions recorded in the software. Further, during course of audit we
did not come across any instances of audit trail features being tempered with, other than of exception given below:
- The feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes
for the accounting software used for maintaining the books of account
Additionally, the audit trail, where enabled, has been preserved by the company as per the statutory requirements for record
retention.
2.(C) With respect to the matter to be included in the Auditors' 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 read with Schedule V of the Act.
For Joshi Apte & Co.
Chartered Accountants
Firm Registration Number - 104370W
Sd/-
Kartik Bajaj
Partner
Membership No. 184159
UDIN : 26184159TVNTFQ7281
Place: Pune
Date: 9th May, 2026
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