Adani Wilmar Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Adani Wilmar Limited ("the Company”), which comprise the Balance sheet as at March 31, 2024, the Statement of Profit and Loss, including the statement of Other Comprehensive Loss, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of material accounting policies 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, as amended ("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, 2024, 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 of the standalone financial
statements in accordance with the Standards on Auditing (SAs), 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 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 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 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 for the financial year ended March 31, 2024. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
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Key audit matters
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How our audit addressed the key audit matter
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Revenue recognition from sale of goods (as described in Note 2.3 (i) and 41 of the standalone financial statements)
• The Company recognizes revenues when control of the goods Our audit procedures included the following:
is transferred to the customer at an amount that reflects the • Assessed the appropriateness of the Company's revenue consteeratten to whichi the Company expects to be endued recognition accounting policies, including those relating in exchange for izhose goods. In determrnteg the sates price, to rebates and trade discounts by comparing with the the Company consteers the effects of rebates and dtecounts applicable accounting standard - Ind AS 115 ("Revenue
(variable c°nsideration). The terms of arrangements in from Contracts with Customers”); case of domestic and exports sales, including the timing
of transfer of control, the nature of discount and rebates • Evaluated the design, implementation and tested the arrangements, delivery specifications and other contractual operating effectiveness of the relevant key controls
and commercial terms, are relevant factors in determining with respect to revenue recognition including general the timing and value of revenue to be recognized. The information and technology control environment, key IT Company considers revenue as a key performance measure application controls over recognition of revenue.
which could create an incentive for overstatement revenue.
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Key audit matters
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How our audit addressed the key audit matter
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Owing to the volume of sales transactions spread across various locations and geographies along with varied terms of contracts with customers, there is a risk of revenue being recognized before control is transferred.
Based on above, revenue recognition has been considered as a key audit matter for the current year's audit.
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Performed substantive testing including analytical
procedures on selected samples of revenue transactions recorded during the year by testing the underlying documents including contracts, invoices, goods dispatch notes, shipping documents and customer receipts, wherever applicable.
Understood and evaluated the Company’s process for recording of the accruals for discounts and rebates and ongoing incentive schemes and on a test basis, verified the year-end provisions made in respect of such schemes.
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Performed analytical review procedures on
revenue recognised during the year to identify any unusual variances.
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On a sample basis, performed balance confirmation and alternative procedures, where required, for the customers balance outstanding as on March 31, 2024.
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Tested a select sample of revenue transactions recorded before the financial year end date to determine whether the revenue has been recognised in the appropriate financial year and in accordance with the applicable contractual terms with the relevant customer.
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Tested manual journal entries posted to revenue to identify any unusual items.
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Assessed the appropriateness of disclosures in the standalone financial statements in respect of revenue recognition in accordance with the applicable requirements.
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Designation, Valuation and Accounting for Derivative transactions - (as described in Note 2.3 (e), 43(C) and 52 of the standalone financial statements)
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The Company uses hedge instruments such as forward currency contracts, options and various commodity
futures and firm commitment contracts, as a part of trading activities, to hedge its risk associated with foreign currency and commodity price. Most of the instruments are in the nature of financial derivative contracts.
The assessment for designation of various commodity hedge contracts on initial recognition as derivative financial instrument is significant judgement process.
As at March 31, 2024, the Company’s total derivative
financial instruments that were carried at fair value comprised financial assets and financial liabilities of INR 194.03 Crore (March 31, 2023: INR 499.97 Crore) and INR 0.07 Crore (March 31, 2023: INR 26.24 Crore) respectively.
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Our audit procedures included the following:
• Obtained an understanding of the risk management
policies of the Company, recognition and classification of exchange differences and overall commodity trading process.
• Obtained an understanding and tested the design and operating effectiveness of key internal controls for the designation, recognition, measurement, estimation and valuation of derivative financial instruments and firm commitments as a part of trading activities.
• For other types of derivatives, independently obtained
statements from banks and commodity exchanges / OTCs (for commodity derivative contracts) and compared the
fair values of the derivatives recorded in the standalone financial statements.
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Key audit matters
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How our audit addressed the key audit matter
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The recognition and measurement of derivative contracts
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On a sample basis, involved our subject matter experts to
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at fair value involves estimation and judgement dependent
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assess the valuation of derivative contracts entered into
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on external inputs including understanding and application
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by the Company during the year.
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of contract terms, forecasting future prices; and applying
discount rates etc.
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Assessed adequacy of the disclosures made in standalone financial statements with respect to assessment,
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The Company has significant hedge transactions which
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accounting of derivative transactions and financial risk
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involves assessment for designation as derivatives and accounting based on fair valuation of derivative contracts. Therefore, the value of outstanding position of derivative contracts as at balance sheet date and the resultant recognition of gain / loss due to change in fair valuation is an area of significant risk estimate and judgement, having material impact on the Company's financial performance and thus an area of significant attention as key audit matter.
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management in accordance with relevant requirements.
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Impairment of investment in subsidiary - (as described in Note 2.3 (o) and 2.3 (q), 47(b) of the standalone financial
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statements)
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As at March 31, 2024, the carrying value of the Company's
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Our audit procedures in relation to evaluation of impairment
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investments in equity shares of the wholly owned
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testing of investments in wholly owned subsidiary included
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subsidiary amounted to INR 179.16 Crore, which comprises
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the following:
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0.95% of the total assets of the Company.
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We obtained an understanding from the management,
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The Company accounts for above investments in
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assessed and tested the design and operating
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subsidiaries at cost (subject to impairment assessment).
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effectiveness of the Company's key controls over the
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Management regularly reviews whether there are any
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impairment assessment of such investments.
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indicators of impairment of the investments by reference
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We evaluated the Company's process regarding
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to Ind AS 36 'Impairment of Assets'.
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impairment assessment by involving our valuation
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For determining the value in use of the underlying
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experts, where necessary, to assist in assessing the
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businesses, discounted cash flow projections are used
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appropriateness of the valuation model including the
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which has sensitivity around the key assumptions, such as
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independent assessment of the underlying assumptions
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revenue growth, tariff rate, coal cost and discount rates
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relating to discount rate, terminal value etc.
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that require considerable judgement.
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We evaluated the cash flow forecasts (with underlying
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This is a Key Audit Matter as the determination of
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economic growth rate) by comparing them to the
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recoverable value for impairment assessment involves
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approved budgets and our understanding of the internal
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significant management judgement.
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and external factors.
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We checked the mathematical accuracy of the impairment model and agreed relevant data back to the latest budgets, actual past results and other supporting documents.
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We assessed the sensitivity analysis made by the management and evaluated whether any reasonably foreseeable change in assumptions could lead to material impact on carrying value of investments.
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We compared the carrying values of the investments in subsidiaries with their respective net assets values and earnings for the period.
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We evaluated the disclosures made in the standalone
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financial statements.
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Other Information
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.
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 such other information is materially inconsistent with the 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
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive loss, cash flows and changes in equity 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. 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 the 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, 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 the management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance 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 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 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 for the financial year ended March 31, 2024 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 the “Annexure 1" a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 except for the matters stated in the paragraph (2)(i)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity 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 Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules,
2015, as amended;
(e) On the basis of the written representations
received from the directors as on March 31, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024
from being appointed as a director in terms of Section 164 (2) of the Act;
(f) The modification relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph (b) above on reporting under Section 143(3)(b) and paragraph (2)(i)(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 these standalone financial statements and the operating
effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;
(h) In our opinion, the managerial remuneration for the year ended March 31, 2024 has been paid
/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(i) With respect to the other matters to be included
in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 33(A) to the standalone 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 - Refer Note 33(B) to the standalone financial statements;
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, as disclosed in the note 50 (a) (v) 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 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, as disclosed in the note 50 (a) (vi) 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 Party
("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such 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 (a) and (b) contain any material misstatement.
v. No dividend has been declared or paid during the year by the Company.
vi. Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account which has 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 except that, audit trail feature is not enabled for certain changes made, if any, using privileged/ administrative access rights, as described in note 50 (c) to the standalone financial statements. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with in respect of other accounting software where audit trail was enabled.
For S R B C & CO LLP For Dharmesh Parikh & Co LLP
Chartered Accountants Chartered Accountants
Firm Registration Number: 324982E/E300003 Firm Registration Number: 112054W/W100725
per Santosh Agarwal per Chirag Shah
Partner Partner
Membership Number: 093669 Membership Number: 122510
UDIN: 24093669BKFCGO7916 UDIN: 24122510BKASLK7022
Place of Signature: Ahmedabad Place of Signature: Ahmedabad
Date: May 01, 2024 Date: May 01, 2024
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