We have audited the accompanying standalone Ind AS
financial statements of Centum Electronics 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' i ssued by the Institute of Chartered
Accountants of India together with the ethical requirements
that are relevant to our audit of the standalone Ind AS
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.
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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(a) Allowance for inventory obsolescence (as described in note 2.3(j), note 10 and note 40 of the
standalone Ind AS financial statements)
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The Company held an inventory balance of
^ 3,267.74 million as at March 31, 2025, as disclosed
in Note 10 and is a material balance for the Company.
Inventory obsolescence allowance is determined
using policies/methodologies that the Company
deems appropriate to the business. Significant
judgement is exercised by the management in
identifying the slow-moving and obsolete inventories
and in assessing whether provision for obsolescence
for slow moving, excess or obsolete inventory items
should be recognized considering the production
plan, forecast inventory usage, committed and
expected orders, alternative usage, etc. Considering
that the aforesaid assessment process is complex
and involves significant estimates and judgements
and the balance of inventory is material, we have
identified this as a key audit matter.
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Our procedures to evaluate the allowance of inventories included:
• We obtained an understanding of how the management
identifies the slow-moving and obsolete inventories and
assesses the amount of allowance for inventories;
• We assessed and tested the design and operating effectiveness
of the Company's internal financial controls over the allowance
for inventory obsolescence;
• We observed the inventory count performed by management
and assessed the physical condition of the inventories;
• We also assessed the allowance policy based on historical sales
performance of the products in their life cycle and comparing
the actual loss to historical allowance recognized, on a sample
basis;
• We further tested the ageing of the inventories and the
computation of the obsolescence level on a sample basis;
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Key audit matters
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How our audit addressed the key audit matter
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• We have tested a sample of inventory items for significant
components to assess the cost and tested the basis of
determination of net realisable value of inventory, on a sample
basis.
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• We also assessed the Company's disclosures concerning this in
Note 40 on significant accounting estimates and judgements
and Note 10 on Inventories to the standalone Ind AS financial
statements.
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Impairment testing of investments in a subsidiary (as described in note 2.3(k), note 5 and note 40 of the
standalone Ind AS financial statements)
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As at March 31, 2025, the carrying amount of
investment in Centum Electronics UK Limited, a
subsidiary of the Company is ^ 1,537.83 million
which has underlying investment in Centum T&S
Group Societe Anonyme (S.A.). Centum T&S
Group Societe Anonyme (S.A.) has been incurring
losses leading to erosion of net worth whereby the
carrying value of the investment in Centum T&S
Group Societe Anonyme (S.A.) as at March 31,
2025, is higher than Centum T&S Group Societe
Anonyme (S.A.)' s net worth. The determination of
recoverable amounts of the Company's investments
in Centum Electronics UK Limited relies on
management's estimates of future cash flows and
their judgment with respect to the Centum T&S
Group Societe Anonyme (S.A.) 's performance.
Significant judgements are required to determine
the key assumptions used in the discounted cash
flow models, such as revenue growth, price, terminal
value and discount rates. Due to the uncertainty of
forecasting and discounting future cash flows, being
inherently subjective, the level of management's
judgement involved and the significance of the
Company's investment as at March 31, 2025, we
have considered this as a key audit matter.
The basis of impairment of investment in subsidiary
is presented in the accounting policies in Note 2.3(1)
to the standalone Ind AS financial statements.
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Our procedures to evaluate the impairment of investment included:
• We assessed whether the Company's accounting policy
with respect to impairment is in accordance with Ind AS 36
"Impairment of assets".
• We have carried out assessment of forecasts of future cash
flows prepared by the management, evaluating the assumptions
and comparing the estimates to externally available industry,
economic and financial data;
• We have also assessed the valuation methodology and the
key assumptions adopted in the cash flow forecasts with the
support of our in-house valuation experts;
• We also assessed the recoverable value headroom by
performing sensitivity testing of key assumptions used.
• We discussed potential changes in key drivers as compared
to previous year / actual performance with management to
evaluate whether the inputs and assumptions used in the cash
flow forecasts were appropriate.
• We discussed with senior management personnel, the
justification for the key assumptions underlying the cashflow
projections and performed sensitivity analysis on the same to
assess their reasonableness;
• We tested the arithmetical accuracy of the financial projection
model;
• We assessed the Company's disclosures concerning this in Note
40 on significant accounting estimates and judgements and
Note 5 pertaining to the disclosures of investment in subsidiary
to the standalone Ind AS financial statements.
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Information Other than the Standalone Ind AS Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the Our opinion on the standalone Ind AS financial statements
other information. The other information comprises the does not cover the other information and we do not express
information included in the Annual report, but does not any form of assurance conclusion thereon.
include the standalone Ind AS financial statements and our
auditor's report thereon. The other information is expected f Management for the Standa|one
to be madepavailable to us after the date of this auditor's Ind AS Financial Statements
report. The Company's Board of Directors is responsible for
In connection with our audit of the standalone Ind AS the mftters stated in section 134(5) of^ A1 with
fin ancial statements, our responsibility is to read the other Lespect ,to the of stantdalone Ind
information identified above when it becomes available financial statetmentefi that give a' true and fair. vew of 1e
and, in doing so, consider whether such other information is financia' position, financia' performanche including ^
materially inconsistent with the standalone Ind AS financial chomprehensive incomeH, cash f™1and changes in equity of
statements, or our knowledge obtained in the audit or the C°mpany in accordance withH the accTouHntingA principles
otherwise appears to be materially misstated. 'n ^ 'ncluding th®. Ind'an Account'ng
Standards (Ind AS) specified under section 133 of the Act
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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.
The 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:
• Identify 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. 1
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 Ind AS 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 standalone
Ind AS 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 as detailed in note 57 of
the standalone Ind AS financial statements, for
the matters stated in the paragraph (f) and (i)
(vi) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014, as
amended;
(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 (b) above
on reporting under Section 143(3)(b) and
paragraph (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 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 44(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 -
Refer Note 27 to the standalone Ind AS
financial statements;
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 58(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 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,
and as disclosed in the note 58 (vi) to the
standalone Ind AS 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. 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 18 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. Based on our examination which included
test checks, the Company has used
accounting softwares 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 softwares except that, audit trail
feature is not enabled for direct changes
to data when using certain access rights,
as described in note 57 to the standalone
Ind AS 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 accounting softwares where audit trail
has been enabled. Additionally, the audit
trail has been preserved by the Company
as per the statutory requirements for
record retention.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Navin Agrawal
Partner
Membership Number: 056102
UDIN: 25056102BMMHDS2181
Place of Signature: Bengaluru
Date: May 22, 2025
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Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
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