We have audited the accompanying standalone financial statements of Sharda Motor Industries Limited (“the
Company”), which comprise the balance sheet as at March 31, 2026, and the Statement of Profit and Loss
(including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for
the year then ended, and notes to the standalone financial statements, including a summary of material
accounting policies 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 the Companies (Indian Accounting Standards) Rules, 2015,
as amended, (“Ind AS”) and accounting principles generally accepted in India, of the state of affairs of the
Company as at March 31, 2026, the Profit (financial performance 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 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 we have obtained is sufficient and appropriate to provide a basis
for our opinion on the standalone financial statements.
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 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. We have determined the matters described below to be the
key audit matters to be communicated in our report w.r.t the Company:
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S.
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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Valuation of Investments
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Our audit procedures included, but were not
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The Company’s investment portfolio constitutes
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limited to, the following:
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a substantial portion of the Company’s total
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(i) Tests of Controls
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assets as at the reporting date and primarily
comprises investments in bonds, mutual
funds and fixed deposits. These investments
are measured either at amortized cost or at
fair value through profit or loss (“FVTPL”) in
accordance with the applicable accounting
standards, based on the contractual terms and
business model assessment.
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Obtained an understanding of the Company’s
internal control framework relating to investment
recognition, classification and valuation, and
evaluated the design and implementation of key
controls in this area and tested the operating
effectiveness of these controls.
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S.
No.
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Key Audit Matters
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How our audit addressed the key audit matter
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Considering the significant proportion of
the Company’s total assets represented by
investments in mutual funds, related party’s,
bonds and fixed deposits, this area required
substantial audit attention. The audit involved
detailed procedures to verify the existence
and ownership of such investments, assess
the appropriateness of their classification
and measurement in accordance with the
requirements of Ind AS 109, and evaluate
the accuracy of valuation based on market-
linked data, Net Asset Values (“NAVs”), interest
accruals and other relevant inputs as at the
reporting date. Further, the audit involved
evaluating management’s assessment relating
to income recognition, valuation and adequacy
of disclosures in the financial statements.
Owing to the materiality of these balances and
the extent of judgment involved, the matter
was considered to be a Key Audit Matter.
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(ii) Test of Details
a) Evaluated the appropriateness of the
Company’s accounting policies relating
to classification, recognition and
measurement of investments with reference
to the requirements of Ind AS 109 Financial
Instruments.
(b) Verified, on a sample basis, the investment
transactions undertaken during the year with
supporting documents such as contact notes,
investment advices, bank statements and
Management approach.
(c) For instruments valued at fair value, assessed
the fair value calculations of all investments
individually, where applicable, to determine
whether the valuations performed by the
Company are as per available quoted prices
in liquid markets and performed testing of
inputs used in valuation including checking of
mathematical accuracy.
(d) For instruments valued at Amortized cost,
assessed the business model objective of
holding the asset to collect the contractual
cash flows that are solely payments of
principal and interest on the principal amount
outstanding. Also, assessed the instrument
for impairment by evaluating if there is any
significant increase in credit risk.
(e) Verified accrued interest income on bonds
and fixed deposits on a sample basis.
(f) Assessed the adequacy and appropriateness
of disclosures relating to investments, fair
value measurement and financial instruments
included in the standalone financial
statements.
Conclusion: Based on the procedures described
above, we did not identify any material exceptions
to the management’s assertions and treatment,
presentation, and disclosure of the subject
matter in standalone financial statements.
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Recognition of Revenue
In accordance with Ind AS 115 - Revenue
from Contracts with Customers, revenue is
recognized when control over the promised
goods is transferred to the customer and the
performance obligations under the contract are
satisfied. Revenue is one of the key measures of
the Company’s performance and is considered
a significant audit risk due to the following:
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Our audit procedures included, but were not
limited to, the following:
(i) Test of Controls
a) Obtained an understanding and assessed
the design, implementation and operating
effectiveness of key internal controls over
recognition and measurement of revenue
in accordance with customer contracts,
including correct timing of revenue
recognition.
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S.
No.
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Key Audit Matters
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How our audit addressed the key audit matter
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(i) Revenue being a key performance indicator
for stakeholder, creating an inherent risk of
management bias or override in timing of
recognition.
(ii) Significant judgment is involved in
determining the timing of transfer of
control and appropriate cut-off of revenue
transactions, especially for dispatches
made near the year end. Accordingly, there
is a risk of revenue being recognized in an
incorrect accounting period.
(iii) The Company’s customer arrangements
include various pricing terms and
commercial adjustments such as
rebates, price revisions and recoveries
linked to changes in raw material
prices. Determination of the transaction
price requires significant management
judgement and estimation, especially
in respect of variable consideration and
year-end price adjustments. There is
therefore a risk that revenue may not be
recognized at the appropriate amount due
to complexities involved in estimating such
adjustments and assessing their impact on
revenue recognized during the year and at
the reporting date.
Accordingly, Revenue Recognition is
identified as a Key Audit Matter.
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b) Performed test of controls of management’s
process of recognizing the revenue from
sales of goods with regard to the timing of
the revenue recognition as per the sales
terms with the customers and management’s
process & assumptions used in calculation of
price variations.
(ii) Test of Details
a) Assessed the appropriateness of the
Company’s accounting policy for revenue
recognition in accordance with Ind AS 115
Revenue from Contracts with Customers and
evaluated management’s assessment relating
to identification of performance obligations,
determination of transaction price and timing
of transfer of control.
b) Selected samples of revenue transactions
recorded during the year and verified the
same with supporting documents including
customer purchase orders, sales orders, tax
invoices, dispatch documents, e-way bills,
transporter acknowledgements and proof of
delivery.
c) Performed year-end cut-off testing by
examining dispatches and sales transactions
recorded immediately before and after the
reporting date to assess whether revenue
had been recognized in the appropriate
accounting period.
d) Reviewed significant contracts with customers
and assessed pricing clauses, including
tooling charges, price revisions. Compared
the management’s post-year-end credit notes
or settlements.
e) Performed analytical procedures on revenue
trends and investigated unusual fluctuations
and variances identified during the course of
the audit.
f) Performed testing of selected manual
adjustments and override entries relating
to revenue, sales returns and credit notes
to assess whether such transactions were
appropriately authorized, supported and
recorded in the correct accounting period.
g) Assessed the adequacy and accuracy of the
Company’s disclosures related to revenue
recognition in the financial statements, as
required by Ind AS 115.
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S.
No.
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Key Audit Matters
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How our audit addressed the key audit matter
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Conclusion: Based on our procedures as
mentioned above, we did not identify any findings
that are significant for the standalone financial
statements as whole in respect of accounting,
presentation and disclosure of revenue
recognition. No material exceptions were noted
in respect of the related balances and disclosures
in the standalone financial statements.
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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 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 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 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.
Responsibility 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, total comprehensive income, changes in equity and cash flows of
the Company in accordance with the 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 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 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 Board of Directors either intends to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are 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 judgment and maintain professional
skepticism 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 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 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 standalone 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 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.
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 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 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.
2A. As required by Section 143(3) of the Act, based on our audit 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 except for the matters stated in the paragraph 2B (f)
below on reporting under Rule 11(g) of the Companies (Audit & Auditors) Rules 2014.
(c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income),
Statement of Change 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 the Ind AS specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(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 is disqualified as on March 31, 2026 from being
appointed as a director in terms of Section 164 (2) of the Act.
(f) The modifications relating to the maintenance of accounts and other matters connected therewith
are as stated in the paragraph 2A (b) above on reporting under Section 143(3)(b) of the Act and
paragraph 2B (f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules,
2014.
(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 B”.
2B. 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:
(a) The Company has disclosed the impact of pending litigations on its financial position in its standalone
financial statements- Refer Note No. 40 to the standalone financial statements.
(b) The Company did not have any long-term contracts including derivative contracts for which there
were any material foreseeable losses.
(c) There has been no delay in transferring amounts, 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, as disclosed in the
Note 51 to the accounts, 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, 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;
ii. The Management has represented, that, to the best of its knowledge and belief, as disclosed in
the Note 51 to the accounts, 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, 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; and
iii. Based on such audit procedures that has 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 (i) & (ii) above,
contain any material misstatement.
(e) i. The final dividend proposed in the previous year, declared and paid by the Company during the
year is in compliance with section 123 of the Act to the extent it applies to payment of dividend;
and
ii. As stated in note 48 to the standalone financial statements, 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.
(f) 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 for
all relevant transactions recorded in the respective software except for the details below.
i. 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.
ii. The Company has used payroll software for maintaining payroll records which is operated by
a third-party service provider. We have relied upon the report of independent service auditors
report for compliance & operating effectiveness of audit trail (edit log and backup) feature in the
said payroll software, that operated throughout the year for all relevant transactions recorded
their in.
Further, the audit trail has been preserved by the company as per the statutory requirements for
record retention.
3. With respect to the matter to be included in the Auditors’ report under Section 197(16):
In our opinion and according to the information and explanation given to us, the Company has paid
remuneration to its directors during the year in accordance with the provisions of and limits laid down
under section 197 read with Schedule V of the Act.
For S.R. Dinodia & Co. LLP.
Chartered Accountants,
Firm’s Registration Number 001478N/N500005
(Sandeep Dinodia)
Partner
Place of Signature: New Delhi Membership Number: 083689
Date: 21.05.2026 UDIN: 26083689GVYYFW2232
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