1. We have audited the accompanying standalone financial statements of Wendt (India) Limited (“the Company”), which comprise the Standalone Balance Sheet as at March 31, 2025, and the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone 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”).
2. 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 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 loss), changes in equity and its cash flows for the year then ended.
Basis for opinion
3. We conducted our audit 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 “Auditors' 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 matters
4. 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.
Key Audit Matter
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How our audit addressed the key audit matter
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1. Appropriateness of revenue recognition on sale
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Our audit procedures relating to revenue recognition
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of goods
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included the following:
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Refer Note 22 (Revenue from contract with customers) of
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a.
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Understood and performed procedures to assess the
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the standalone financial statements.
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design and test the operating effectiveness of
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The Company's revenue principally comprises sale of
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management's key internal financial controls in
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goods. Revenue from the sale of goods is recognised at a point in time when the control of the goods is transferred to
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relation to revenue recognition.
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the customers, which is on dispatch or delivery in
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b.
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Assessed the appropriateness of the revenue
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accordance with the terms of sales contracts, and there
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recognition accounting policies of the Company, by
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are no unfulfilled obligations that could affect the
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evaluating compliance with the Ind AS 115 ‘Revenue
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customer's acceptance of the products.
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from Contracts with Customers'.
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We have identified the recognition of revenue as a key
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c.
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Tested the reconciliation of the amounts as per the
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audit matter as the Company has various customers with
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sales register to the general ledger; and the
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different terms of sales contracts which increase the risk
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reconciliation items on a sample basis.
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of error in the timing of revenue recognition. Revenue recognition is determined to be an area involving
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d.
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Selected samples of revenue transactions during the
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significant risk and hence requiring significant auditor
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year and inspected underlying documents which
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attention. The Company and its external stakeholders
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inter-alia included invoices, customer contracts or
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focus on revenue as a key performance indicator and
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orders and shipping documents or customers'
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therefore there could be a risk of material misstatement in
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acceptance, as applicable, to determine the revenue
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so far as revenue recognition is concerned.
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recognised in accordance with the terms of sales contracts.
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e.
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Tested selected samples of revenue transactions recorded before and after the financial year end date to determine whether the revenue has been recognised in accordance with the terms of the sales contracts, in the appropriate financial period.
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f.
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Evaluated the appropriateness and adequacy of disclosures in the standalone financial statements in respect of revenue recognition.
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Key Audit Matter
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How our audit addressed the key audit matter
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2. Appropriateness of capitalisation of an intangible asset acquired during the year
Refer Note 6 to the standalone financial statements.
During the year, the Company incurred Rs. 3,508 Lakhs towards the acquisition of a Trademark from Wendt GmbH, an entity having significant influence over the Company, which has been capitalised as an intangible asset in the books of account.
The capitalisation of the cost of acquisition of the Trademark has been determined to be a key audit matter due to the judgement exercised by the management in assessing whether the recognition criteria under Ind AS 38 “Intangible Assets” had been met and in determining the estimated useful life over which the Trademark is expected to generate future economic benefits including key assumptions such as discount rate and expected growth rate of revenue from operations considered in the future cash flow projections.
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Our audit procedures relating to the accounting for
Trademark as an intangible asset included the following:
• Understood the design and evaluated the operating effectiveness of the internal financial controls around capitalisation of intangible assets.
• Evaluated the commercial substance of the transaction and management's process of assessing the reasonableness of the transaction price, including obtaining the approvals from the Board of Directors, Audit Committee and Shareholders.
• Perused the valuation report obtained by the management from an external professional services firm (“management's expert”) and evaluated the independence, competence, capabilities and objectivity of the management's expert.
• Along with the involvement of auditors' experts:
o Assessed appropriateness of the valuation model used by the management's expert;
o Evaluated reasonableness of the projections by assessing the key assumptions such as discount rate, growth rate, etc. used in the preparation of the projections and determining the estimated useful life of the Trademark; and
o Tested the projected future cash flows and assessed whether those were consistent with our knowledge and understanding of the Company's business.
• Checked mathematical accuracy of the computations in the model.
• Performed a sensitivity analysis in relation to key assumptions.
• Evaluated the appropriateness and adequacy of disclosures in the standalone financial statements.
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Other information
5. The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Report of the Directors, Management Discussion and Analysis Report, Report on Corporate Governance and Business Responsibility and Sustainability Report, but does not include the standalone financial statements and our auditors’ report thereon.
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 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, 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 and those charged with governance for the standalone financial statements
6. 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, 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 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.
7. In preparing the standalone 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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
8. Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Auditors’ responsibilities for the audit of the standalone financial statements
9. 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 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 standalone financial statements.
10. 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 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 auditors’ 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 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 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.
11. 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.
12. 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.
13. 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 auditors’ 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
14. 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 the “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
15. 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, except for the matters stated in paragraph 15(h)(vi) below on reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 (as amended).
(c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone 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 Indian Accounting Standards specified 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 maintenance of accounts and other matters connected therewith, reference is made to our remarks in paragraph 15(b) above on reporting under Section 143(3)(b) and paragraph 15(h)(vi) below on reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 (as amended).
(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 A”.
(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 does not have any pending litigations which would impact its financial position.
ii. The Company was not required to recognise a provision as at March 31,2025 under the applicable law or Indian Accounting Standards, as it does not have any material foreseeable losses on long-term contracts. The Company did not have any derivative contracts as at March 31,2025.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year.
iv. (a) The management has represented that, to the best of its knowledge and belief, 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(s) or entity(ies), including foreign entities (“ Intermediaries” ), with the understanding, whether recorded in writing or otherwise, that the Intermediaries 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 (Refer Note 41 (vi)(a) to the standalone financial statements);
(b) The management has represented that, to the best of its knowledge and belief, as disclosed in the Notes 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, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties (“ Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 41 (vi)(b) to the standalone financial statements); and
(c) Based on such 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-clause (a) and (b) contain any material misstatement.
v. The dividend declared and paid by the Company during the year is in compliance with Section 123 of the Act.
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 and that has operated throughout the year for all relevant transactions recorded in the software, except that the audit trail is not maintained at the application level for modification, if any, by certain users with specific access and for direct database changes. During the course of our audit, except for the aforesaid instances of audit trail not maintained at application and database level, where the question of our commenting on whether the audit trail feature being tampered with does not arise, we did not notice any instance of audit trail feature being tampered with. Further, the audit trail has been preserved by the Company as per the statutory requirements for record retention.
16. The Company has provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
For Price Waterhouse Chartered Accountants LLP Firm Registration Number: 012754N/N500016 Jagadeesh Sridharan Partner
Place: Bengaluru Membership Number: 217038
Date: April 23, 2025 UDIN: 25217038BMMLXI1516
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