We have audited the accompanying standalone financial
statements of INOX India Limited (“the Company"), which
comprise the Balance sheet as at March 31 2025, 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.
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, 2025, its profit including other comprehensive
(Loss), 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
judgement, were of most significance in our audit of the standalone
financial statements for the financial year ended March 31, 2025.
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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Accounting for Revenue from Contracts with Customers - EPC Long Term Contracts (as described in Note 3.6 and 25 of the
standalone financial statements)
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The Company's revenue comprises of revenue generated from sale of
products and services as well as from Engineering, Procurement and
Construction (EPC) long term design-build contracts, and other forms
of manufacturing/commissioning contracts. A significant portion
of the Company's business is from EPC contracts, where revenue is
recognised under the percentage of completion method over the time
basis. This method requires management to make cost estimates of
the progress towards completion of contracts, which can be subjective
and affect the timing and amount of revenue recognized.
There are significant accounting judgements in estimating revenue to be
recognised on contracts with customers, including estimation of costs
to complete. The Company recognizes revenue on the basis of input
method in proportion of the contract costs incurred at balance sheet
date, relative to the total estimated costs of the contract at completion.
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Our audit procedures included the following:
• We understood the Company's policies and processes and
assessed compliance with the policies in terms of Ind AS
115 - Revenue from Contracts with Customers, control
mechanisms and methods in relation to the revenue
recognition for revenue contracts and evaluated the design
and operative effectiveness of the financial controls from
the above through our test of control procedures.
• We obtained and read the terms of various categories
of revenue contracts on selective basis to evaluate the
management's process to assess nature of contractual
performance obligations, the point of time for transfer of
control to customer and other relevant terms necessary for
revenue recognition.
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Key audit matters
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How our audit addressed the key audit matter
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Given the material impact of these estimates on the financial
statements, and the high degree of judgement in relation to total
estimated costs of each such contract including cost contingencies
taking into account specific risks of uncertainties (including disputed
claims, if any) and effort in evaluating them by management on a
regular basis throughout the life of the contract and adjusted where
appropriate. Accordingly, we have determined revenue recognition
using the percentage completion method to be a key audit matter.
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• We identified and tested controls related to revenue
recognition and our audit procedure focused on
determination of progress of completion, recording of costs
incurred and estimation of costs to complete the remaining
contract obligations through inspection of evidence of
performance of these controls.
• For EPC contracts/ design-build contracts, we have selected
a sample of contracts and performed the following
procedures among others
a. Obtained and read contract documents for each
selection, change orders, and other documents that were
part of the agreement.
b. Identified significant terms and deliverables in the
contract to assess management's conclusions regarding
the (i) identification of distinct performance obligations;
(ii) changes to costs to complete as work progresses and
as a consequence of change orders, if any; (iii) the impact
of change orders on the transaction price; and (iv) the
evaluation of the adjustment to the transaction price on
account of variable consideration.
c. Compared costs incurred with Company's estimates of
costs incurred to date of identify significant variations and
evaluated whether those variations have been considered
appropriately in estimating the remaining costs to
complete the contract.
d. Tested the estimate for consistency with the status of
delivery of milestones and customer acceptance to
identify possible delays in achieving milestones, which
require changes in estimated costs or efforts to complete
the remaining performance obligation.
e. We selected a sample of contracts assets with
corresponding trade receivables that were overdue
and evaluated the basis for management's conclusions
regarding the (1) evidence supporting the execution of
work for which the contract assets were recognized; (2)
reasons for the delays in recovery of invoices and the
basis on which recoverability of the contract assets was
assessed; (3) impact on the allowance for expected credit
losses; and (4) adjusting events after the reporting date
i.e. March 31, 2025 and the date when the financial
statements are approved by the Board of Directors and
the impact thereof on the carrying amount of the related
contract assets.
• Performed analytical procedures and checked exceptions for
contracts with low or negative margins, loss making contracts/
onerous contracts, contracts with significant changes in cost
estimates and significant overdue net receivable positions
for contracts with marginal or no movement to determine
the level of cost provisioning required.
• We assessed that the contractual positions and revenue
for the year were presented and disclosed properly 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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Recoverability of investments in and loans given to a subsidiary (as described in note 8A of the standalone financial statements)
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As at March 31, 2025, the Company held investment with a carrying
amount of INR 3,806.52 Lacs (excluding loan of INR 235.04 Lacs) in
INOXCVA Comercio e Industria De Equipamentos Crigogenicos Ltda.,
Brazil, a wholly owned subsidiary. This investment is carried at cost
less impairment in the Company's Standalone Financial Statements.
Consequent to accumulation of losses incurred by the subsidiary, the
Company's management has tested this investment for impairment in
accordance with Ind AS 36 by comparing its recoverable amount with
it carrying amount as at March 31, 2025. The recoverable amount
of the investment in the subsidiary is assessed based on future
discounted cash flows of the subsidiary.
We considered this as a key audit matter due to significant judgement
involved in estimating future cash flows of the subsidiary and in
determining the discount rate to be used. Changes in inputs and
assumptions could impact the results of the impairment assessment.
Refer to Note Nos. 8A to the Standalone Financial Statements.
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Our audit procedures related to forecasts of expected orders,
revenue, free cash flows generated, selection of the method for
estimating recoverable value and discount rate for the entity:
• We tested the effectiveness of controls over forecasts of
expected orders, revenue, free cash flows and selection of
the discount rate;
• We evaluated the reasons for variation between the
management's previous estimate of orders, revenue and
cash flow forecasts and obtained our understanding of the
manner in which revised forecasts were obtained;
• We evaluated the reasonableness of the methodology and
discount rate by testing the source information underlying
the determination of the discount rate and mathematical
accuracy of the calculations; and
• We performed sensitivity analysis of the discount rate to
assess the extent of change in discount rate that would be
required for the investment to be impaired.
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Information Other than the Standalone Financial
Statements and Auditor's Report Thereon (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
accompanying 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 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
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 income, 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
judgements 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
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 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
judgement 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
accompanying 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, 2025 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.
Other Matter
The standalone financial statements of the Company for the year
ended March 31, 2024, included in these standalone financial
statements, have been audited by the predecessor auditor who
expressed an unmodified opinion on those statements vide its
report dated May 13, 2024.
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, to the
extent applicable, 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 sub-clause (2)(i)(vi) below on
reporting under Rule 11(g) of the Companies (Audit
and Auditors) Rules, 2014,
(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, 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) 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 in sub-clause (2)(i)(vi) below on
reporting under Rule 11(g) of the Companies (Audit
and Auditors) Rules, 2014;
(g) With respect to the adequacy of the internal financial
controls with reference to 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, 2025 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 andAuditors) 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 45 to the
standalone financial statements;
ii. The Company did not have any long-term
contracts including derivative contracts for which
there were any material foreseeable losses;
iii. There were no amounts which were 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 49(c) 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 49(d) 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 performed
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 as described in note 51 to the
standalone financial statements, except that:
a. audit trail feature is not enabled for
certain changes made, if any, using
privileged/ administrative access rights
for the period from April 01, 2024 to
December 31, 2024; and
b. audit trail feature is not enabled for
direct changes to database when using
certain access rights.
Further, during the course of our audit we did not
come across any instance of audit trail feature
being tampered with, in respect of accounting
software(s) where the audit trail has been enabled.
Additionally, the audit trail of prior year has been
preserved by the Company as per the statutory
requirements for record retention to the extent it
was enabled and recorded in the respective years.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Santosh Agarwal
Partner
Membership Number: 093669
UDIN: 25093669BMJBHM8816
Place of Signature: Ahmedabad
Date: May 15, 2025
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