walchandnagar industries ltd Auditors report

To the Members of

WALCHANDNAGAR INDUSTRIES LIMITED

Report on the Audit of the Ind AS Financial Statements Opinion

We have audited the accompanying Ind AS Financial Statements of

WALCHANDNAGAR INDUSTRIES LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and loss including the statement of Other Comprehensive Income, cash flow statement and statement of Changes in Equity for the year then ended, and notes to the Ind AS Financial Statements, including a summary of significant accounting policies and other explanatory information and which include the Returns for the year ended on that date audited by the independent auditor of the Companys division located in Ethiopia.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India, of the state of affairs flows and any as at March 31, 2023, and its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Ind AS 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 Ind AS Financial Statements under the provisions of the Companies Act, 2013 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 su_icient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, whereof most significance in our audit of the Ind AS Financial Statements of the current period. These matters were addressed in the context of our audit of the Ind AS Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

a. Expected credit loss on trade receivables ("ECL"). The company has used a practical expedient by computing the ECL on trade receivables based on a provision matrix.

This area required significant attention because substantial amount of managements judgment and estimates were involved. Our procedures included the following, but were not limited to:

1. Discussion with respective business heads for understanding the working of estimates done.

2. Verification of details of Liquidated Damages charged by clients and total sales for the period from 1st April 2016 to 31st March 2023. This historical data were used by the management in their analysis of credit loss experience.

3. Verification of contract documents, correspondence with clients pertaining to projects where specific loss provisioning was made. The Management estimate is based on such forward information and historical data to derive division-wise provisioning values. b. Calculation for percentage completion for revenue for projects operating over time under IND AS 115: Calculation of Cost to complete the projects for arriving at percentage of completion is crucial for revenue recognition. Management has prepared profitability statements for all the projects which are operating over time as per IND AS 115. This area required significant attention because it involved lots of estimates and management judgements. Our procedures included the following, but were not limited to:

1. Verification of total contract values from signed Contract with customers, progress reports, invoices certified by clients.

2. Verification of total Cost incurred for each project as per books of accounts, total Cost to Complete each project, project profitability statements, as reviewed by projects heads. It was verified that the cost for completing balance work is reviewed and revised wherever necessary based on current scenario and future expectations.

3. obtaining a detailed understanding of the processes, controls and policies of the Management with respect to preparation of project profitability statements, evaluating the design of controls including approvals and related compliances, testing implementation and operating effectiveness of the controls

Information Other than the Ind AS Financial Statements and Auditors Report thereon

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis,

Boards Report including Annexures to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the Ind AS Financial Statements and our auditors report thereon.

Our opinion on the Ind AS 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 Ind AS Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Ind AS Financial Statements, or our knowledge obtained during the course of our 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.

Managements Responsibility for the Ind AS Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Ind AS 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 accounting Standards specified under section 133 of the Act. This responsibility also includes the 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 Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the Ind AS Financial Statements, management is responsible for assessing the Companys 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 companys financial reporting process

Auditors Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS 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 Ind AS 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 Ind AS Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is su_icient 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 controls.

Obtain an understanding of internal financial controls 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 an 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 management.

Conclude on the appropriateness of managements 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 Companys 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 Ind AS 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 Ind AS Financial Statements, including the disclosures, and whether the Ind AS Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Ind AS Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Ind AS Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Ind AS 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 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 Ind AS 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.

Emphasis of Matter

We draw attention to the following matters in Notes to Ind AS Financial Statements: Refer Note No. 38 where it is mentioned that during the year, KKR assigned the loans, given by them to the Company by way of ICD and Debentures, to ACREs. There was a Standstill agreement dated July 19, 2022 between ACREs and the Company whereby on fulfilling certain conditions therein, the Company was eligible for waiver on the overall loan amount. The company has fulfilled the conditions as per the agreement. The company executed a Restructuring Agreement with ACRE on May 18, 2023. Since this is an adjusting event as per IND AS 10 "Events after reporting date", the company has disclosed net waiver amount of 10,539 Lakhs under "Exceptional Item" in the Statement and reduced its total debts from ACREs.

Our report is not modified in respect of this matter.

Other Matter

We did not audit the financial statements / information of Ethiopia division included in the financial statements of the Company whose financial statements / financial information reflect total assets of Rs. 1,104.59 lakhs and total liabilities of Rs. 2122.48 Lakhs as at March 31, 2023 and the total revenue of Rs. 1.98 Lakhs (Exchange Gain) and total expenses of Rs. 5.34 Lakhs for the year ended on that date. The financial statements / information of this division have been audited by the independent auditor whose report has been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of such division, is based solely on the report of such auditor.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the 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 and proper returns adequate for the purpose of our audit have been received from overseas division not visited by us. c. The reports on the accounts of the overseas Ethiopia division of the Company audited by independent auditor have been sent to us and have been properly dealt with by us in preparing this report. d. The Balance Sheet, the Statement of Profit and loss, changes in equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the division not visited by us. e. In our opinion, the aforesaid Ind AS Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. f. On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act. g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

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, 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 Ind AS Financial Statements – Refer Note 53 to the Ind AS Financial Statements. ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts. iii. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company. iv. Further, a. The management has represented that, to the best of its knowledge and belief, 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 persons or entities, including foreign entities ("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 ("Ultimate Beneficiaries") by or on behalf of the Company or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries; b. The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("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 ("Ultimate Beneficiaries") by or on behalf of the Funding Party or provide any guarantee, security or the like from or 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. The Company has not declared or paid any dividend during the year. vi. 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 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) of the Act which are required to be commented upon by us. vii. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

For Jayesh Sanghrajka & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 104184W/W100075

Rishikesh Nasikkar

Designated Partner

Membership Number: 166493

UDIN: 23166493BGYARE8798

Place: Mumbai Date: May 25, 2023

ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of WALCHANDNAGAR INDUSTRIES LIMITED of even date)

i. In respect of the Companys property, plant and equipment: (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

(b) The Company has a program of verification to cover all the items of fixed assets in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification. (c) According to the information and explanations given to us, the records examined by us and based on the examination of the Conveyance Deeds provided to us, we report that the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date except as per details mentioned below.

Description of item of property	Survey No.337 A2 hectare 0.00 Are 0.115	Survey No.337 B2/B2 hectare 0.00 Are 0.209	Survey No.306/1b hectare 0.00 Are 22.714	Survey No.307/1 to 6 Hectare 0.00 Are 71.058
Gross carrying value (Amount in lakhs)	0.12	0.21	38.64	120.9
Title deeds held in the name of		Cooper Eng. Ltd
Whether title deed holder is a promoter, director or relative of promoter/director or employee of promoter/director		No
Property held since which date		11-08-1961
Reason for not being held in the name of the company (also indicate if in dispute).	Sale Deed has not been converted in 7/12 extract. Land title deed is in the name of Cooper Engineering Ltd. Such company got amalgamated in Walchandnagar Industries Ltd. on 06/04/1979.

*Relative/ promoter here means relative/ promoter as defined in the Companies Act, 2013

(d) According to the information and explanations given by the management, the company has not revalued Property, Plant and Equipment (including right of use assets) and Intangible assets during the year. Hence paragraph 3 (i) (d) is not applicable to the company.

(e) According to the information and explanations given by the management, no proceedings have been initiated or are pending against the company for holding any benami property under the benami transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. ii. In respect of the companys inventory (a) The Management has conducted physical verification of inventory at reasonable intervals during year. The coverage and procedure adopted by management is appropriate. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(b) According to the information and explanations given by the management, the company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis of security of current assets. The quarterly returns or statements filed by the company with such bank or financial institutions are in agreement with books of account of the company.

iii. According to information and explanations given to us by the management, the company has not made investments in, provided any guarantee or security or granted any loans, or advances in nature of loans, secured or unsecured, to companies, firms, limited liability partnerships or any other parties. Hence para 3(iii) of the order is not applicable to the company. iv. According to the information and explanations given to us and based on the audit procedures performed by us, we are of the opinion that the company has not undertaken any transactions which is in non-compliance of section 185 and Section 186 of companies Act, 2013. v. The Company has not accepted any deposits or amount deemed to be deposits within the meaning of Sections 73 to 76 of the Act and rules made thereunder. According to the information and explanations given to us and based on the audit procedures performed by us, no order has been passed by company law board or National Company Law Tribunal or Reserve Bank of India or any court or any tribunal. vi. We have broadly reviewed the cost records maintained by the Company specified by the Central Government under section 148(1) of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. vii. According to the information and explanations given to us, in respect of statutory dues: (a) The Company has generally been regular in depositing undisputed statutory dues including Goods and services tax, Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service tax, Duty of customs, duty of excise, value added tax, cess and any other statutory dues to appropriate authorities. Further, there are no undisputed statutory dues which are outstanding for a period in excess of six months from the date from which they became due.

(b) Details of dues of Income Tax, Sales Tax, Service Tax, Excise Duty and Value Added Tax which have not been deposited as at March 31, 2023 on account of dispute are given below:

Sr. No.	Name of Statute	Nature of Dues	Amount (In lakhs)	Period to which amount relates	Forum where demand is pending
1	Maharashtra Land Revenue	NA Tax	16.18	1982 to 2003	Tahsildar, Indapur
	Code	NA Tax	58.58	1994 to 2003
2	Pune Municipal Corporation	Municipal Taxes	99.02	2008-09 to 2012-13	Court of Small Causes, Pune
3	Central Sales Tax,1956	Central Sales Tax	367.14	2013-14	Joint Commissioner of Sales Tax, (Appeals) Pune
4	Customs Act,1962	Customs Duty	64.5	July,2008	Honble High Court, Madras
5	Service Tax	Service Tax	362.65	2006 to 2010	CESTAT, Kolkata
6	Service Tax	Service Tax & Penalty	1,334.66	March 2013 to Dec 2015	CESTAT, Mumbai
7	Andhra Pradesh General Sales Tax Act, 1957	Value Added Tax	313.66	2011	Honble High Court,
8	The Employees Provident Funds and Miscellaneous Provisions Act, 1952	Employee Provident Fund	50.68	2006-07	Honble High Court, Mumbai

The Company has disputed the demand and preferring an appeal before The Sales Tax Appellate Tribunal. Company has so far paid 204.78 lakhs under protest.

Company has paid 50.05 lakhs under protest.

Company has already paid 53.75 lakhs under protest.

Certain cases filed against the company by the Ex-employees of Heavy Engineering Division and Foundry Division for compensation are pending before the labour courts - Amounts unascertained.

viii. According to the information and explanations given to us and based on the audit procedures performed by us , there are no transactions which are not recorded in books of accounts and have been surrendered or disclosed as income during the year in tax assessments under the Income Tax act, 1961 (43 of 1961). ix. In respect of loans; (a) To the best of our knowledge and according to the information and explanations given to us, the Company has not defaulted in repayment of loans from financial institutions and dues from debenture holders.

(b) According to information and explanations given to us and based on our audit procedures, we report that the company has not been declared willful defaulter by any bank or financial institution or government or any governmental authority.

(c) As per the records of the Company and according to the information and explanations given to us, the company has not obtained any term loans. Hence para 3 (ix) (c) is not applicable to the company.

(d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the Ind AS Financial Statements, we did not observe any funds raised on short term basis and have been used for long term purposes by the company.

(e) According to the information and explanations given to us and on overall examination of the Ind AS Financial Statements of the company, the company does not have any subsidiaries, associates or joint ventures. Hence para 3 (ix) (e) is not applicable to the company. (f) According to the information and explanations given to us and on overall examination of the Ind AS Financial Statements of the company, the company does not have any subsidiaries, associates or joint ventures. Hence para 3 (ix) (f) is not applicable to the company.

x. In respect of money raised:

(a) As per information and explanations given to us, the company has not raised any money by way of public offer (including debts instruments) during the year. Hence para 3(x)(a) of the order is not applicable to the company.

(b) As per information and explanations given to us, the company has made a preferential allotment of shares during the year. The same is issued in compliance with requirements of section 42 and section 62 of the companies act. During FY 2021-22, KKR had invoked shares of promoters and adjusted against the outstanding loan given to the company. This invoked amounts were treated as Promoters loans. The issue of shares during the year, was against the conversion of these loans.

xi. In respect of frauds:

(a) As per information and explanations given to us and procedures performed by us, no fraud by the company and no fraud on the company has not been noticed or reported during the year.

(b) As per information and explanations given to us by the management, no report has been filed by us in form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014.

(c) As per information and explanations given to us by the management, no whistle blower complaints were received during the year.

xii. Since company is not a Nidhi company, para 3 (xii) of the order is not applicable to company.

xiii. In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the Ind AS Financial Statements as required by the applicable accounting standards.

xiv. In respect of Internal Audit:

(a) In our opinion and based on our examination, the company has an internal audit system commensurate with size and nature of its business. (b) We have considered the internal audit reports of the company issued till date, for the period under audit. xv. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its Directors or persons connected to its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company. xvi. (a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Hence, para 3(xvi)(a) of the order is not applicable to the company.

(b) the company has not carried on any Non-Banking Financial or Housing Finance activities (NBFC or HFC) during the year. Hence para 3(xvi)(b) of the order is not applicable to the company.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Hence para 3(xvi)(c) of the order is not applicable to the company.

(d) The company does not have any subsidiaries, associates or joint ventures. Hence, para 3(xvi)(d) is not applicable to the company. xvii. The company has not incurred any cash losses in the current financial year. However, it had incurred cash loss of 1,352 Lakhs in the immediately preceding financial year. xviii. There is no resignation of the statutory auditors during the year. Hence, para 3 (xviii) of the order is not applicable to the company. xix. On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the Ind AS Financial Statements, our knowledge of the board of directors and management plans, we are of the opinion that no material uncertainty exists as on the date of audit report that the company is capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. xx. The company does not have obligations towards Corporate Social Responsibility as per the provisions of section 135 of the Act. Hence, para 3 (xx) of the order is not applicable to the company. xxi. The company does not have any subsidiary, associate or Joint venture and consolidation is not required to be done. Therefore, para 3 (xxi) of the order is not applicable to the company.

For Jayesh Sanghrajka & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 104184W/W100075

Rishikesh Nasikkar

Designated Partner

Membership Number: 166493

UDIN: 23166493BGYARE8798

Place: Mumbai

Date: May 25, 2023

ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of

WALCHANDNAGAR INDUSTRIES LIMITED of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of WALCHANDNAGAR INDUSTRIES LIMITED ("the Company") as of March 31, 2023 in conjunction with our audit of the Ind AS Financial Statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and e_icient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the Ind AS Financial Statements, whether due to fraud or error. We believe that the audit evidence we have obtained is su_icient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS Financial Statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the Ind AS Financial Statements.

Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Jayesh Sanghrajka & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 104184W/W100075

Rishikesh Nasikkar

Designated Partner

Membership Number: 166493

UDIN: 23166493BGYARE8798

Place: Mumbai

Date: May 25, 2023