We have audited the accompanying standalone Ind AS financial
statements of Voltas 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
Income, the Cash Flow Statement and the Statement of
Changes in Equity for the year then ended, and Notes to the
standalone Ind AS 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 Ind
AS 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 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 Ind AS 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 Ind AS Financial
Statements' section of our report. We are independent of the
Company in accordance with the 'Code of Ethics' issued by
the Institute of Chartered Accountants of India together with
the ethical requirements that are relevant to our audit of the
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 Ind AS financial statements.
EMPHASIS OF MATTER
We draw attention to Note 46 (C) of the accompanying
standalone financial statements which describes the uncertainty
relating to the outcome of ongoing litigation including claim
for encashment of bank guarantee by a contractor in respect
of one of the overseas projects executed by the Company in
earlier periods. Our opinion is not modified in respect of this
matter.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
standalone Ind AS financial statements for the financial year
ended March 31, 2025. These matters were addressed in
the context of our audit of the standalone Ind AS 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 Ind AS 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 Ind AS 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 Ind AS
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 for long term Electro-Mechanical Projects (Refer Note 36 and 54 of the financial statements)
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The Company's revenues include revenue from long-term
Electro-Mechanical Projects amounting to INR 555.84 crores,
disclosed under Note 36 'Revenue from Operations' as
construction contract revenue, which are recognized over a
period of time in accordance with the requirements of Ind AS
115, 'Revenue from contracts with customers'.
Due to the nature of the contracts, revenue is recognized based
on percentage of completion method which is determined
based on proportion of contract costs incurred to date
compared to estimated total contract costs, which involves
significant judgments including estimate of future costs, revision
to original estimates based on new knowledge such as delay in
timelines, changes in scope and consequential revised contract
price and recognition of the liability for loss making contracts/
onerous obligations.
Accuracy of revenues, onerous obligations and profits may
deviate significantly on account of change in judgements and
estimates.
Considering the variability of assumptions involved in estimation
of revenues, the same has been considered as a Key Audit Matter.
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Our audit procedures included the following:
? Read the Company's revenue recognition accounting policies
and assessed compliance of the policies with Ind AS 115.
? We assessed the design and tested the operating effectiveness
of controls over revenue recognition through inspection
of evidence of performance of these controls with specific
focus on determination of progress of completion, recording
of costs incurred, estimation of costs to complete and the
remaining contract obligations.
? We performed test of details, on a sample basis and evaluated
management estimates and assumptions.
? We assessed management's estimates by comparing
estimated cost with actual costs and discussion on the project
specific considerations with the relevant project managers
including on our project site visits. We assessed that,
fluctuations in commodity and currency prices, delays, cost
overruns related to the performance of work are appropriately
taken into consideration while estimating costs to come and
also assessed the accounting treatment of expected loss on
projects including variable consideration which is recognized
in accordance with the Company's accounting policy of
revenue recognition.
? We tested contracts with low or negative margins, loss making
contracts, contracts with significant changes in planned cost
estimates and probable penalties due to delay in contract
execution, on sample basis.
? We assessed that the disclosure of revenue in accordance
with Ind AS 115 'Revenue from contracts with customers'
are appropriately presented and disclosed in Note 54 to the
standalone Ind AS financial statements.
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Recoverability and Impairment Allowance of receivables and contract assets of Electro-Mechanical Projects and Services
segment (Refer Note 14, 15 and 52 of the financial statements)
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As at March 31, 2025, trade receivables and contract assets of
Electro - Mechanical Projects and Service segment amount to
INR 571.86 crores.
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Our audit procedures included the following:
? We evaluated the Company's processes and controls relating
to the monitoring of trade receivables and review of credit
risks of customers.
? We assessed the design and tested the operating effectiveness
of relevant controls in relation to the process adopted by
management for testing the impairment of these receivables
and the contract assets.
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Key audit matters
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How our audit addressed the key audit matter
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Out of the total trade receivables and contract assets of Electro¬
Mechanical Projects and Service segment, INR 524.67 crores
represent trade receivables and contract assets of international
business operations. Recoverability of certain receivables and
contract assets are impacted due to several factors like the
customer profile, delays in obtaining completion certification
in certain projects due to long project tenure, project disputes
resulting in future claims against the Company and financial
ability of the customers etc.
The Company follows 'simplified approach' in accordance with
Ind AS 109 - 'Financial Instruments', for recognition of impairment
loss allowance on trade receivables and contract assets. In
calculating the impairment loss allowance, the Company has
considered its credit assessment for its customers. Owing to the
long settlement period involved in a few of the projects due
to the nature of the projects, management also considers the
likely delays involved in the settlement process as part of the
impairment allowance calculation.
The assessment of the impairment of such trade receivables and
contract assets requires significant management judgment and
hence the same has been considered as Key Audit Matter.
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? 1 n respect of impairment allowance on receivables of this
segment and recovery of certain trade receivables and
contract assets of international business operation we tested
the ageing of trade receivables and contract assets. We tested
the management's assessment of the customer's financial
circumstances, ability to repay the dues based on historical
payment trends, ongoing litigation for recovery of dues,
assumption used for determining likely losses and delays in
collection of trade receivables including any project disputes
which may result in future claims against the Company.
? We evaluated the assumptions used by management in
calculation of the expected credit loss impairment including
the impact of the future uncertainties in the economic
environment.
? We assessed the disclosures on the contract assets and trade
receivables in Note 14 and Note 15 respectively and the
related risks such as credit risk in Note 52 of the standalone
Ind AS financial statements.
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Recoverability and Impairment Assessment of Investments in its wholly owned subsidiary Voltas Netherlands B.V.
("VNBV") (Refer Note 8 of the financial statements)
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The Company has an investment of INR 116.81 crs in its wholly
owned subsidiary Voltas Netherlands B.V. ("VNBV") as of March 31,
2025, which is carried at cost. As part of the annual impairment
assessment, management has identified impairment indicators
in respect of its investment in VNBV. As a result, an impairment
assessment was carried out by the Company to determine
whether an impairment was required to be recognised.
For the purpose of the above impairment assessment,
management has determined the value in use by forecasting
and discounting future cash flows. The determination of value in
use requires management to make estimates and judgments in
respect of projected order value, margins, terminal growth rates
and discount rates.
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Our audit procedures included the following:
? We assessed the design and tested the operating effectiveness
of controls in relation to impairment assessment processes.
? We assessed the Company's valuation methodology applied
in determining the recoverable amount. In making this
assessment, we evaluated the competence, independence
and objectivity of Company's specialists involved in
the process. We also involved valuation specialists to
independently assess the value of the investment.
? We assessed the assumptions around the key drivers of
the cash flow forecasts including projected order value
and margins, discount rates, expected growth rates and
terminal growth rates used. Further, assessed the recoverable
value headroom by performing sensitivity testing of key
assumptions used.
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Key audit matters
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How our audit addressed the key audit matter
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Accordingly, considering the inherent nature of these calculations
being subject to sensitivity to the inputs used for forecasting
the cash flows and judgements used by management in such
forecasts, the assessment of impairment of investment in VNBV
has been considered to be a key audit matter.
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? We tested the arithmetical accuracy of the models.
? We evaluated the accounting and disclosure requirements of
investments in the standalone Ind AS financial statements of
the Company.
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We have determined that there are no other Key Audit Matters
to communicate in our report.
INFORMATION OTHER THAN THE FINANCIAL
STATEMENTS AND AUDITOR'S REPORT THEREON
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 Ind AS financial statements and our auditor's report
thereon.
Our opinion on the standalone Ind AS financial statements
does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS 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 FOR THE
STANDALONE IND AS 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 Ind AS 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 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
Ind AS financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS 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 Board of Directors are also responsible for overseeing the
Company's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE
STANDALONE IND AS FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the standalone Ind AS 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 Ind AS financial
statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:
• I dentify and assess the risks of material misstatement of
the standalone Ind AS financial statements, whether due
to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that
is 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 Ind AS financial statements, including the
disclosures, and whether the standalone Ind AS 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 Ind AS 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.
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 the paragraph (i) (vi)
below on reporting under Rule 11(g);
(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 Ind AS
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 paragraph 2 (b) above on reporting
under Section 143(3)(b) and paragraph (i) (vi) below
on reporting under Rule 11(g);
(g) With respect to the adequacy of the internal financial
controls with reference to these standalone Ind AS
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 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 Ind AS financial statements
- Refer Note 46(C) to the standalone Ind AS
financial statements;
ii. The Company has made provision, as required
under the applicable law or accounting
standards, for material foreseeable losses, if any,
on long-term contracts including derivative
contracts;
iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund by the
Company;
iv. a) The management has represented
that, to the best of its knowledge and
belief, other than as disclosed in the
Note 56(v) to the standalone Ind AS
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 persons or entities, 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 56(vi)
to the standalone Ind AS financial
statements, no funds have been
received by the Company from any
persons or entities, including foreign
entities ("Funding Parties"), with the
understanding, whether recorded in
writing or otherwise, that the Company
shall, 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. The final dividend paid by the Company during
the year in respect of the same declared for the
previous year is in accordance with section 123
of the Act to the extent it applies to payment
of dividend.
As stated in Note 61 to the standalone Ind AS
financial statements, the Board of Directors of
the Company have proposed final dividend
for the year which is subject to the approval
of the members at the ensuing Annual
General Meeting. The dividend declared is in
accordance with section 123 of the Act to the
extent it applies to declaration of dividend.
vi. The Company has migrated to an upgraded
version for one of the accounting software
to SAP S4/HANA from legacy accounting
software SAP ECC effective November 11,
2024. 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 was not enabled for
changes at database level in respect of legacy
accounting software SAP ECC which was being
used until November 11, 2024 , as described
in note 57 to the 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 the Company's
accounting softwares where the audit trail has
been enabled. Additionally, the audit trail for
the previous year has been preserved by the
Company as per the statutory requirements for
record retention, to the extent it was enabled,
as stated in Note 57 to the financial statements.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Aruna Kumaraswamy
Partner
Membership Number: 219350
UDIN: 25219350BMMABA2366
Place of Signature: Mumbai
Date: May 07, 2025
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