We have audited the accompanying standalone financial
statements of Apollo Micro Systems Limited (the
Company'), which comprise the Standalone Balance
Sheet as at 31 March 2025, the Standalone Statement
of Profit and Loss (including Other Comprehensive
Income), Standalone Statement of Changes in Equity and
Standalone Statement of Cash Flows for the year then
ended, and notes forming part of standalone financial
statements, including a summary of material accounting
policies and other explanatory information (herein after
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 ('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
of the Company as at 31 March 2025 and total profit and
other comprehensive income(comprising profit and other
comprehensive income),statement of changes in equity
and its cash flows for the year ended.
Basis for opinion
We conducted our audit of the standalone financial
statements in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the
Act. Our responsibilities under those Standards are
further described in the 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 (ICAI) together with
the ethical requirements that are relevant to our audit of
the standalone financial statements under the provisions
of the Act and the Rules made 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 ('KAM') are those matters that, in our
professional judgment, were of most significance in our
audit of the standalone financial statements of the current
period. These matters were addressed in the context of
our audit of the standalone financial statements as a whole
and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
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 matter
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Auditor's response
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1.
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Capital work in progress (CWIP):
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We assessed the Company's process to verify the Capital
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Appropriateness of recording of costs as
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expenditure incurred during the year.
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'capital work in progress':
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Our audit approach included testing of the design and operating
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As at 31 March 2025, the company has recorded
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effectiveness of the internal controls and substantive testing as
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CWIP aggregating to ? 5,873.48 lakhs (after
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follows:
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additions and capitalisation) towards-
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• We have performed detailed discussion with the management
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(i) various testing tools and instruments and
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to understand their business plans, assumptions used in
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expansion of its manufacturing facilities at
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assessing future technology products and their relevance to
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? 2,600.98 lakhs and
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meet future demands.
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(ii) civil works at ? 3,272.50 lakhs.
Management has identified certain specific
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• Review of capital expenditure, business plans, documents/
information thereto and their controls effectiveness.
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costs incurred for ? 3,052.31 lakhs and
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• Substantive tests including testing on a sample basis the
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has applied judgement to assess if these
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major additions, deletions to the assets by applying all the
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costs incurred relating to CWIP meet the
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characteristics of capital expenditure, proper classification
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recognition criteria of Property, Plant
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of the same, with reference to the Company's policy and
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and Equipment in accordance with Ind
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accounting standards.
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AS-16 (Property, Plant and Equipment).
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• Tested the source documentation to determine whether the
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Accordingly, this is determined as a key
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expenditure is in capital nature and has been appropriately
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audit matter due to the significance of the
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approved and segregated into appropriate categories.
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capital expenditure during the year.
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• Scrutiny of relevant general ledgers to assess if the expenditure
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Refer the note 4(b) to the standalone
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has been correctly accounted for.
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financial statements.
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• Review of physical verification reports, for the verification
carried out by the management for CWIP.
• Our procedures as mentioned above did not identify any costs
that has been inappropriately capitalised.
• Ensuring adequacy of disclosures in standalone
financial statements.
• Review of compliance with respect to Companies Act, Income
tax Act, Customs duty and GST Act, particularly for accounting
of CAPEX additions, deletions, depreciation and of carrying
amounts thereof.
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2.
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Inventories:
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In view of significance of the matter we applied the following
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The Company carries significant inventories
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procedures:
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amounting to ? 60,058.83 lakhs as on 31 March
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• Obtaining an understanding of and assessing the design
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2025. Inventory constitutes 61% of total current
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implementation and operating effectiveness of management's
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assets and 48% of total assets
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key internal controls relating to physical verification of
inventories by the management, identification of obsolete and
slow-moving inventory, monitoring of inventory ageing and
assessment of provisioning.
• Reviewed the management judgements applied in calculating risk
of obsolescence at the time of material procurement taking into
consideration the inside technical expertise and management
assessment of present and future condition of inventory
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Key audit matter
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Auditor's response
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With such a huge volume of inventories there is a
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•
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Assessing the design implementation and operating
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remote risk of obsolescence. Since the inventories
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effectiveness of management's key internal controls over
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are specific for customers, possibility of obtaining
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classification, valuation and valuation models.
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accurate NRV is not feasible.
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•
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Reviewed the policy of management for physical verification
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Given the significant judgment and estimates
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and the documents related to management physical count
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and the huge value of inventories involved in the
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procedure followed.
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management assessments and complexities in
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Sample testing of orders received , purchase and cost
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accurate physical verification of stocks in process,
the inventories are identified as key audit matter.
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accumulation in the value of stock in process.
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•
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Compare the cost of inventory with estimated net realisable
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Refer to note-7 of the standalone financial
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value by comparing actual selling price prevailing around and
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statements
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subsequent to the year end.
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•
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We have made a detailed analysis of order book, in order to
study whether the value of the WIP along with finished goods
are in line with the value of pending orders in term of value.
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•
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Assessed and valuated the appropriateness of disclosures
made in the standalone financial statements.
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Other Information
The Company's management and Board of Directors are
responsible for the preparation of the other information.
The other information comprises the information
included in the Management Discussion and Analysis,
Board's Report including Annexures there to, Business
Responsibility and sustainable Report, Corporate
Governance and Shareholder's information, but does not
include the standalone financial statements and 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 the other
information is materially inconsistent with the standalone
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 on the other
information that we obtained prior to the date of this
auditor's report, 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.
When we read the additional information, as mentioned
above, that would be included in the Integrated Report, if
we conclude that there is a material misstatement therein,
we are required to communicate the matter to those
charged with governance and take appropriate actions as
applicable under the relevant laws and regulations.
Responsibility of Management and those
charged with Governance for the Standalone
financial statements
The Company's Board of Directors are 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, changes in equity and cash flows of the Company
in accordance with the Indian Accounting Standards ('Ind
AS') specified under section 133 of the Act and other
accounting principle generally accepted in India. This
responsibility also includes 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 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 and Board of Directors are responsible for
assessing the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting
unless Board of Directors either intends to liquidate the
Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors of the Company are responsible
for overseeing the Company's financial reporting process.
Auditor's Responsibility 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
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the standalone financial statements, whether due
to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or
the override of internal 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 adequate internal financial controls with
reference to standalone financial statements in place
and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management and
Board of Directors.
• 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 standalone financial
statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our
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 of the current period 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 'Annexure-A' a
statement on the matters specified in paragraphs 3
and 4 of the Order
2) As required by Section 143(3) of the Act, based on
our audit we report that:
a. We have sought and obtained all the information
and explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit.
b. In our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination of
those books, except for the matters stated in
paragraph 2(i)(vi) below on reporting under rule
11(g) of the companies (Audit and auditors) rules
2014 as amended
c. The standalone balance sheet, the statement of
profit and loss including other comprehensive
income, the statement of changes in equity and
the statement of cash flows dealt with by this
report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial
statements comply with the Ind AS specified
under Section 133 of the Act.
e. On the basis of the written representations
received from the directors as on 31 march 2025
taken on record by the Board of Directors, none
of the directors is disqualified as on 31 March
2025 from being appointed as a director in terms
of Section 164 (2) of the Act.
f. With respect to the maintenance of accounts and
other matters connected therewith, reference is
made to other remarks paragraph 2(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 over with reference standalone
financial statements 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 Auditor's Report in accordance
with the requirements of section 197(16) of
the Act, as amended, in our opinion and to the
best of our information and according to the
explanations given to us, the remuneration paid
by the Company to its directors during the year
is in accordance with the provisions of section
197 of 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 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 are no amounts required to be
transferred to the Investor Education and
Protection Fund (IEPF) by the Company as
no dividends are declared by the Company.
Hence there are no delays in transfer of
amounts to IEPF
iv. a. The Management has represented that,
to the best of its knowledge and belief,
no funds (which are material either
individually or in the aggregate) 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 or entity, including
foreign entity ("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, no funds (which are material
either individually or in the aggregate)
have been received by the Company
from any person or entity, including
foreign entity ("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;
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 dividend declared in previous year and
paid during the year by the company is in
compliance with section 123 of the Act, to
the extent it applies to payment of dividend.
vi. Based on our examination, which included
test checks, the Company has used
accounting software for maintaining its
books of account in which a feature of
recording audit trail (edit log) facility
has been installed with effect from 30th
November 2024 and it has operated
from that date for the remaining period for
all the relevant transactions recorded in
accounting software. During the course
of performing our audit, we did not come
across any instance of audit trail being
tampered with. Further the audit trail feature
has been preserved with effect from 30th
November 2024 and hence our commenting
on preserving audit trail for previous year is
not applicable.
Place: Hyderabad
Date: 23 May 2025 ICAI
UDIN:25231056BMOVZK4696
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