We have audited the accompanying standalone financialstatements of Apollo Micro Systems Limited (theCompany'), which comprise the Standalone BalanceSheet as at 31 March 2025, the Standalone Statementof Profit and Loss (including Other ComprehensiveIncome), Standalone Statement of Changes in Equity andStandalone Statement of Cash Flows for the year thenended, and notes forming part of standalone financialstatements, including a summary of material accountingpolicies and other explanatory information (herein afterreferred to as 'the Standalone Financial Statements').
In our opinion and to the best of our information and accordingto the explanations given to us, the aforesaid Standalonefinancial statements give the information required by theCompanies Act, 2013 ('the Act') in the manner so requiredand give a true and fair view in conformity with accountingprinciples generally accepted in India, of the state of affairsof the Company as at 31 March 2025 and total profit andother comprehensive income(comprising profit and othercomprehensive income),statement of changes in equityand its cash flows for the year ended.
Basis for opinion
We conducted our audit of the standalone financialstatements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities forthe Audit of the Standalone financial statements sectionof our report. We are independent of the Company in
accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together withthe ethical requirements that are relevant to our audit ofthe standalone financial statements under the provisionsof the Act and the Rules made thereunder, and we havefulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on theStandalone financial statements.
Key audit matters ('KAM') are those matters that, in ourprofessional judgment, were of most significance in ouraudit of the standalone financial statements of the currentperiod. These matters were addressed in the context ofour audit of the standalone financial statements as a wholeand in forming our opinion thereon, and we do not providea separate opinion on these matters.
We have determined the matters described below to bethe key audit matters to be communicated in our report.We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalonefinancial statements section of our report, including inrelation to these matters.
Accordingly, our audit included the performance ofprocedures designed to respond to our assessment of therisks of material misstatement of the standalone financialstatements. The results of our audit procedures, includingthe procedures performed to address the matters below,provide the basis for our audit opinion on the accompanyingstandalone financial statements.
Key audit matter
Auditor's response
1.
Capital work in progress (CWIP):
We assessed the Company's process to verify the Capital
Appropriateness of recording of costs as
expenditure incurred during the year.
'capital work in progress':
Our audit approach included testing of the design and operating
As at 31 March 2025, the company has recorded
effectiveness of the internal controls and substantive testing as
CWIP aggregating to ? 5,873.48 lakhs (after
follows:
additions and capitalisation) towards-
• We have performed detailed discussion with the management
(i) various testing tools and instruments and
to understand their business plans, assumptions used in
expansion of its manufacturing facilities at
assessing future technology products and their relevance to
? 2,600.98 lakhs and
meet future demands.
(ii) civil works at ? 3,272.50 lakhs.
Management has identified certain specific
• Review of capital expenditure, business plans, documents/information thereto and their controls effectiveness.
costs incurred for ? 3,052.31 lakhs and
• Substantive tests including testing on a sample basis the
has applied judgement to assess if these
major additions, deletions to the assets by applying all the
costs incurred relating to CWIP meet the
characteristics of capital expenditure, proper classification
recognition criteria of Property, Plant
of the same, with reference to the Company's policy and
and Equipment in accordance with Ind
accounting standards.
AS-16 (Property, Plant and Equipment).
• Tested the source documentation to determine whether the
Accordingly, this is determined as a key
expenditure is in capital nature and has been appropriately
audit matter due to the significance of the
approved and segregated into appropriate categories.
capital expenditure during the year.
• Scrutiny of relevant general ledgers to assess if the expenditure
Refer the note 4(b) to the standalone
has been correctly accounted for.
financial statements.
• Review of physical verification reports, for the verificationcarried out by the management for CWIP.
• Our procedures as mentioned above did not identify any coststhat has been inappropriately capitalised.
• Ensuring adequacy of disclosures in standalonefinancial statements.
• Review of compliance with respect to Companies Act, Incometax Act, Customs duty and GST Act, particularly for accountingof CAPEX additions, deletions, depreciation and of carryingamounts thereof.
2.
Inventories:
In view of significance of the matter we applied the following
The Company carries significant inventories
procedures:
amounting to ? 60,058.83 lakhs as on 31 March
• Obtaining an understanding of and assessing the design
2025. Inventory constitutes 61% of total current
implementation and operating effectiveness of management's
assets and 48% of total assets
key internal controls relating to physical verification ofinventories by the management, identification of obsolete andslow-moving inventory, monitoring of inventory ageing andassessment of provisioning.
• Reviewed the management judgements applied in calculating riskof obsolescence at the time of material procurement taking intoconsideration the inside technical expertise and managementassessment of present and future condition of inventory
With such a huge volume of inventories there is a
•
Assessing the design implementation and operating
remote risk of obsolescence. Since the inventories
effectiveness of management's key internal controls over
are specific for customers, possibility of obtaining
classification, valuation and valuation models.
accurate NRV is not feasible.
Reviewed the policy of management for physical verification
Given the significant judgment and estimates
and the documents related to management physical count
and the huge value of inventories involved in the
procedure followed.
management assessments and complexities in
Sample testing of orders received , purchase and cost
accurate physical verification of stocks in process,the inventories are identified as key audit matter.
accumulation in the value of stock in process.
Compare the cost of inventory with estimated net realisable
Refer to note-7 of the standalone financial
value by comparing actual selling price prevailing around and
statements
subsequent to the year end.
We have made a detailed analysis of order book, in order tostudy whether the value of the WIP along with finished goodsare in line with the value of pending orders in term of value.
Assessed and valuated the appropriateness of disclosuresmade in the standalone financial statements.
The Company's management and Board of Directors areresponsible for the preparation of the other information.The other information comprises the informationincluded in the Management Discussion and Analysis,Board's Report including Annexures there to, BusinessResponsibility and sustainable Report, CorporateGovernance and Shareholder's information, but does notinclude the standalone financial statements and auditor'sreport thereon.
Our opinion on the standalone financial statements doesnot cover the other information and we do not express anyform of assurance conclusion thereon.
In connection with our audit of the Standalone FinancialStatements, our responsibility is to read the otherinformation and, in doing so, consider whether the otherinformation is materially inconsistent with the standalonefinancial statements, or our knowledge obtained duringthe course of our audit or otherwise appears to bematerially misstated.
If, based on the work we have performed on the otherinformation that we obtained prior to the date of thisauditor's report, we conclude that there is a materialmisstatement of this other information, we are required toreport that fact. We have nothing to report in this regard.
When we read the additional information, as mentionedabove, that would be included in the Integrated Report, ifwe conclude that there is a material misstatement therein,
we are required to communicate the matter to thosecharged with governance and take appropriate actions asapplicable under the relevant laws and regulations.
The Company's Board of Directors are responsible for thematters stated in section 134(5) of the Act with respect tothe preparation of these Standalone Financial Statementsthat give a true and fair view of the financial position,financial performance, including other comprehensiveincome, changes in equity and cash flows of the Companyin accordance with the Indian Accounting Standards ('IndAS') specified under section 133 of the Act and otheraccounting principle generally accepted in India. Thisresponsibility also includes maintenance of adequateaccounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities;selection and application of appropriate accountingpolicies; making judgments and estimates that arereasonable and prudent; and design, implementation andmaintenance of adequate internal financial controls, thatwere operating effectively for ensuring the accuracy andcompleteness of the accounting records, relevant to thepreparation and presentation of the Standalone FinancialStatements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.
In preparing the standalone financial statements,management and Board of Directors are responsible forassessing the Company's ability to continue as a goingconcern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accountingunless Board of Directors either intends to liquidate theCompany or to cease operations, or has no realisticalternative but to do so.
The Board of Directors of the Company are responsiblefor overseeing the Company's financial reporting process.
Our objectives are to obtain reasonable assurance aboutwhether the standalone financial statements as a wholeare free from material misstatement, whether due to fraudor error, and to issue an auditor's report that includesour opinion. Reasonable assurance is a high level ofassurance but is not a guarantee that an audit conductedin accordance with SAs will always detect a materialmisstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expectedto influence the economic decisions of users taken on thebasis of these standalone financial statements.
As part of an audit in accordance with SAs, we exerciseprofessional judgment and maintain professionalscepticism throughout the audit. We also:
• Identify and assess the risks of material misstatementof the standalone financial statements, whether dueto fraud or error, design and perform audit proceduresresponsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basisfor our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than forone resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, orthe override of internal controls.
• Obtain an understanding of internal financialcontrols relevant to the audit in order to design auditprocedures that are appropriate in the circumstances.Under section 143(3)(i) of the Act, we are alsoresponsible for expressing our opinion on whether theCompany has adequate internal financial controls withreference to standalone financial statements in placeand the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policiesused and the reasonableness of accounting estimatesand related disclosures made by management andBoard of Directors.
• Conclude on the appropriateness of management'suse of the going concern basis of accounting and,based on the audit evidence obtained, whethera material uncertainty exists related to events orconditions that may cast significant doubt on theCompany's ability to continue as a going concern. Ifwe conclude that a material uncertainty exists, weare required to draw attention in our auditor's reportto the related disclosures in the standalone financialstatements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based onthe audit evidence obtained up to the date of ourauditor's Report. However, future events or conditionsmay cause the Company to cease to continue asa going concern.
• Evaluate the overall presentation, structure andcontent of the standalone financial statements,including the disclosures, and whether the standalonefinancial statements represent the underlyingtransactions and events in a manner that achievesfair presentation.
We communicate with those charged with governanceregarding, among other matters, the planned scope andtiming of the audit and significant audit findings, includingany significant deficiencies in internal control that weidentify during our audit.
We also provide those charged with governance witha statement that we have complied with relevantethical requirements regarding independence, and tocommunicate with them all relationships and othermatters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.
From the matters communicated with those charged withgovernance, we determine those matters that were ofmost significance in the audit of the standalone financialstatements of the current period and are therefore the keyaudit matters We describe these matters in our auditor'sreport unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances,we determine that a matter should not be communicatedin our report because the adverse consequences of doingso would reasonably be expected to outweigh the publicinterest benefits of such communication.
1) As required by the Companies (Auditor's Report)Order, 2020 ('the Order') issued by the CentralGovernment of India in terms of sub-section (11) ofSection 143 of the Act, we give in 'Annexure-A' astatement on the matters specified in paragraphs 3and 4 of the Order
2) As required by Section 143(3) of the Act, based onour audit we report that:
a. We have sought and obtained all the informationand explanations which to the best of ourknowledge and belief were necessary for thepurposes of our audit.
b. In our opinion, proper books of account asrequired by law have been kept by the Companyso far as it appears from our examination ofthose books, except for the matters stated inparagraph 2(i)(vi) below on reporting under rule11(g) of the companies (Audit and auditors) rules2014 as amended
c. The standalone balance sheet, the statement ofprofit and loss including other comprehensiveincome, the statement of changes in equity andthe statement of cash flows dealt with by thisreport are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financialstatements comply with the Ind AS specifiedunder Section 133 of the Act.
e. On the basis of the written representationsreceived from the directors as on 31 march 2025taken on record by the Board of Directors, noneof the directors is disqualified as on 31 March2025 from being appointed as a director in termsof Section 164 (2) of the Act.
f. With respect to the maintenance of accounts andother matters connected therewith, reference ismade to other remarks paragraph 2(b) above onreporting under section 143(3)(b) and paragraph2(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 internalfinancial controls over with reference standalonefinancial statements of the Company and theoperating effectiveness of such controls, refer toour separate Report in 'Annexure-B'.
h. With respect to the other matters to beincluded in the Auditor's Report in accordancewith the requirements of section 197(16) ofthe Act, as amended, in our opinion and to thebest of our information and according to theexplanations given to us, the remuneration paidby the Company to its directors during the yearis in accordance with the provisions of section197 of the Act.
i. With respect to the other matters to be includedin the Auditor's Report in accordance with Rule11 of the Companies (Audit and Auditors) Rules,2014 (as amended), in our opinion and to thebest of our information and according to theexplanations given to us:
i. The Company has disclosed the impact ofpending litigations on its financial positionin its standalone financial statements.Refer note.33 to the Standalonefinancial statements.
ii. The Company did not have any long-termcontracts including derivative contractsfor which there were any materialforeseeable losses.
iii. There are no amounts required to betransferred to the Investor Education andProtection Fund (IEPF) by the Company asno dividends are declared by the Company.Hence there are no delays in transfer ofamounts to IEPF
iv. a. The Management has represented that,
to the best of its knowledge and belief,no funds (which are material eitherindividually or in the aggregate) havebeen advanced or loaned or invested(either from borrowed funds or sharepremium or any other sources or kindof funds) by the Company to or inany other person or entity, includingforeign entity ("Intermediaries”), withthe understanding, whether recordedin writing or otherwise, that theIntermediary shall, whether, directlyor indirectly lend or invest in otherpersons or entities identified in anymanner whatsoever by or on behalf ofthe Company ("Ultimate Beneficiaries”)or provide any guarantee, securityor the like on behalf of theUltimate Beneficiaries;
b. The Management has represented,that, to the best of its knowledge andbelief, no funds (which are materialeither individually or in the aggregate)have been received by the Companyfrom any person or entity, includingforeign entity ("Funding Parties”), withthe understanding, whether recorded inwriting or otherwise, that the Companyshall, whether, directly or indirectly, lendor invest in other persons or entitiesidentified in any manner whatsoeverby or on behalf of the Funding Party("Ultimate Beneficiaries”) or provideany guarantee, security or the like onbehalf of the Ultimate Beneficiaries;
c. Based on the audit procedures thathave been considered reasonableand appropriate in the circumstances,nothing has come to our notice thathas caused us to believe that therepresentations under sub-clause(i) and (ii) of Rule 11(e), as providedunder (a) and (b) above, contain anymaterial misstatement.
v. The dividend declared in previous year andpaid during the year by the company is incompliance with section 123 of the Act, tothe extent it applies to payment of dividend.
vi. Based on our examination, which includedtest checks, the Company has usedaccounting software for maintaining itsbooks of account in which a feature ofrecording audit trail (edit log) facilityhas been installed with effect from 30thNovember 2024 and it has operatedfrom that date for the remaining period forall the relevant transactions recorded inaccounting software. During the courseof performing our audit, we did not comeacross any instance of audit trail beingtampered with. Further the audit trail featurehas been preserved with effect from 30thNovember 2024 and hence our commentingon preserving audit trail for previous year isnot applicable.
Place: Hyderabad
Date: 23 May 2025 ICAI
UDIN:25231056BMOVZK4696