Create a highly professional PowerPoint presentation for Board / Audit Committee members from the perspective of statutory auditors. - Title: ABC LLP Statutory Auditors FY 2025-26 Table of Content: 1. Title & Index 2. Our Scope and Nature of engagements 3. Auditors Responsibility 4. Audit Approach, methodology 5. Key audit matters 6. Audit procedure performed 7. Independence & Ethics Confirmations 8. Opinion & Conclusion of Audit Report Introduction: Pipara introduction Audit quality is our number one priority. We plan our audit to focus on delivering high-quality audit in accordance with the Standards on Auditing issued under section 143(10) of the Companies Act, 2013 and had set the following audit quality objectives for this audit: • A robust challenge of the key judgments taken in the preparation of the financial statements. • A strong understanding of your internal control environment. • A well planned and delivered audit that raises findings early with those charged with governance. • ABC LLPare statutory auditors of XYZLimited. This presentation summarises the principal matters that have arisen during the audit of the standalone financial statements of XYZLimited (“the Company”) and the consolidated financial statements of the Company and its subsidiaries (collectively “the Group”) for the year ended March 31, 2026, which have been prepared in accordance with Indian Accounting Standards prescribed under section 133 of the Companies Act, 2013 (“the Act”) for the year ended March 31, 2026. This presentation is not intended to be exhaustive but highlights the most significant matters that have come to our attention which we believe would be of use to the members of TCWG. Our Scope and Nature of engagements Scope of our Audit • We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Our audit was designed to obtain reasonable, rather than absolute, assurance about whether the financial statements are free from material misstatement, whether due to fraud or error. • We conducted our audit of Internal Financial Controls with reference to Financial Reporting (IFCoFR) in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting, issued by the ICAI and the said Standards on Auditing, to the extent applicable to an audit of internal financial controls. • Engagements performed Combined audit of standalone financial statements − audit of standalone financial statements − audit of Internal Financial Controls with reference to Financial Reporting • Combined Audit of consolidated financial statements − audit of consolidated financial statements − audit of Internal Financial Controls with reference to Financial Reporting • Reporting on standalone financial results under Regulation 33 of the SEBI Listing Regulations based on − audit of financial results for the year ended March 31, 2026 − limited review of financial results for the quarter ended March 31, 2026 • Reporting on consolidated financial results under Regulation 33 of the SEBI Listing Regulations based on − audit of financial results for the year ended March 31, 2026 − limited review of financial results for the quarter ended March 31, 2026 Auditor’s Responsibilities • Expressing Opinion on Financial Statements The auditor’s primary responsibility is to independently express an opinion on whether the financial statements give a true and fair view in accordance with applicable Ind AS, the Companies Act, 2013, and relevant auditing standards. • Reasonable Assurance The auditor obtains reasonable assurance that the financial statements are free from material misstatement due to fraud or error. This is a high level of assurance, but not an absolute guarantee. • Understanding the Entity and Internal Controls The auditor gains an understanding of the company’s business, operations, and internal financial controls to identify and assess risks and design appropriate audit procedures. • Fraud and Error The auditor evaluates the risks arising from fraud and error, applies professional skepticism throughout the audit, and performs procedures to identify material misstatements. While the auditor provides reasonable assurance on the financial statements, the primary responsibility for the prevention, detection, and correction of fraud rests with management. • Going Concern Assessment The auditor evaluates whether the company can continue as a going concern and reviews management’s assessment of future operational and financial sustainability. Audit approach, Methodology Identify changes in your business and environment No material changes in your business and environment noted. Scoping Our plan communication set out the scoping of our audit. We have completed our audit in line with our audit plan. Determine materiality Materiality at 1% of average profit for previous two years. Performance Materiality at 40% of materiality; we used performance materiality in determining sample sizes for test of details. The amount below which misstatements would be regarded as clearly trivial at 5% of materiality Significant risk assessment In our plan communication we explained our risk assessment process and detailed the significant risks we have identified on this engagement. We communicate our findings and conclusions on these risks in this communication. Conclude on significant risk areas Refer Appendix A– Response to Significant Risks Our audit report Our audit report is an unmodified audit report. Key Audit Matters 1.Revenue Recognition: - Revenue recognition involves material estimation and significant management judgment, both in terms of the timing and measurement of revenue from sale of goods. The value and timing of revenue recognition varies from contract to contract, and certain activities may span beyond the financial year end. Revenue from sale of goods is recognised when control of the goods is transferred to the customer and when no unfulfilled performance obligations remain. This necessitates a detailed and careful analysis of each sale agreement, contract, or customer purchase order to determine the appropriate point of revenue recognition. An inappropriate assessment could result in revenue being recognised before control of the goods has actually been transferred to the customer. Further, subsequent adjustments to the transaction price are required on account of grade mismatch or slippage of the transferred goods. Where variations in the contract price are not mutually settled between the parties, the matter is referred to third-party testing, and the Company estimates the adjustments required for revenue recognition pending resolution of such disputes. Such adjustments are made on an estimated basis, following historical trends. Inappropriate estimation in this regard could result in revenue being either overstated or understated. In view of the above, the timing of revenue recognition and adjustments for quality variances — both involving critical accounting estimates and judgments — have been identified as a Key Audit Matter. Our audit procedures to assess the appropriateness of revenue recognised in the standalone financial statements included, among others, the following: • Understanding and Evaluation of Internal Controls: We obtained an understanding of and assessed the design, implementation, and operating effectiveness of the Company's key internal controls over the revenue recognition process, including controls over contract review, dispatch documentation, and quality adjustment mechanisms. • Cut-off Testing: We examined significant contracts entered into close to the year end to evaluate whether revenue has been recognised in the correct accounting period, ensuring no premature or delayed recognition has occurred. • Sample-Based Contract Testing: We tested a sample of contracts across various revenue streams by agreeing the relevant information back to underlying contracts, customer purchase orders, and proof of delivery documentation, as appropriate. We assessed whether the revenue recognition policy applied by the Company is in accordance with the principles of Ind AS 115 • Assessment of Price Adjustments: We evaluated the basis and reasonableness of adjustments made to the transaction price on account of quality variances, including grade mismatch and slippage. This involved assessing the Company's estimation methodology, testing it against historical trends, and reviewing the status of disputes referred to third-party testing. • Adequacy of Disclosures: We assessed whether the disclosures in the standalone financial statements relating to revenue recognition policies and significant estimates are adequate and in compliance with the applicable financial reporting framework. Our testing, as described above, confirmed that revenue has been recorded in accordance with the terms of the underlying contracts and the Company's accounting policy, which is consistent with the requirements of Ind AS 115. 2. Inventory and Valuation of Inventories and Physical Verification of Inventories: - The carrying value of inventory as at March 31, 2026 is `2,32,260.76 Lakhs. The inventory is valued at the lower of cost and net realizable value. We considered the value of inventory as a key audit matter given the relative size of its balance in the financial statements and significant judgment involved in the consideration of factors in determination of selling prices such as fluctuation of raw materials prices in the market and in determination of net realizable value (Refer Note No. 8 to the Standalone Financial Statement). Our audit procedures in respect of the carrying value of Inventory included, among others, the following: • We understood and tested the design and operating effectiveness of controls as established by the management in determination of net realizable value of inventory. • Assessing the appropriateness of Company’s accounting policy for valuation of stock-in-trade and compliance of the policy with the requirements of the prevailing Indian accounting standards. • We considered various factors including the actual selling price prevailing around and subsequent to the year-end. Compared the cost of the finished goods with the estimated net realizable value and checked if the finished goods were recorded at net realizable value where the cost was higher than the net realizable value. Based on the above procedures performed, the management’s determination of the net realizable value of the inventory as at the year end and comparison with cost for valuation of inventory is considered to be reasonable. It is not possible for us to physically verify the Inventories of Raw Materials, Inventory of Stores and Spares, and Packing and Other Materials at the year end. As per the information given to us by the management, that the management of the company physically verify the inventories at regular intervals. We have relied on the valuation done by the management of the company. 3. Carrying Value of Trade Receivables and Advances: The assessment of the carrying value of Trade Receivables and Advances (including Trade Advances) involves significant management judgment in evaluating collectability and determining the appropriateness of allowances for impairment and provisions for bad and doubtful debts. Based on internal and external information available up to the date of approval of the standalone financial statements by the Board of Directors, management has concluded that there is no indication of any material impact on the carrying value of such balances. Given the degree of estimation and judgment involved in determining whether a provision for impairment or bad debt is required, whether in relation to a specific transaction or a customer's overall outstanding balance, this matter has been identified as a Key Audit Matter. Our audit procedures in respect of the carrying value of Trade Receivables and Advances included, among others, the following: • Sample Testing: We selected and assessed a sample of trade receivables and advances to evaluate their recoverability on an individual basis. • Ageing and Payment Pattern Analysis: We reviewed the ageing profile of trade receivables and advances and assessed customers' historical payment patterns. We also verified whether any post-year-end collections had been received up to the date of completion of our audit procedures. • Management Discussions: We held discussions with management regarding any disputes between the parties concerned, the steps taken by management to recover outstanding amounts, and the credit standing of significant counterparties, wherever such information was available. • Provisioning Policy Assessment: We evaluated the appropriateness of management's application of its provisioning policy for recognising impairment allowances and bad debt provisions. • Adequacy of Disclosures: We considered whether the disclosures made in the standalone financial statements in respect of trade receivables and advances are adequate and in accordance with the applicable financial reporting framework. Based on the procedures performed, we found the carrying value of Trade Receivables and Advances and the related provisions to be reasonable, and the disclosures in the standalone financial statements to be adequate. 4. Capitalization of Property, Plant & Equipment: - The Company capitalises expenditures