We have audited the accompanying standalone financial
statements of TD Power Systems Limited (“the
Company”), which comprise the Standalone Balance
Sheet as at 31st March, 2026, the Standalone Statement
of Profit and Loss (including Other Comprehensive
Income), the Standalone Statement of Changes in Equity
and the Standalone Statement of Cash Flows for the
year then ended, and notes to the standalone financial
statements, including material accounting policies and
other explanatory information (hereinafter referred to
as “the Standalone Financial Statements”) in which are
included the financial statements of the Japan Branch
for the year ended on that date audited by the branch
auditor of the Company located at Japan.
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 the Indian Accounting Standards
prescribed under section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules, 2015,
as amended, (“Ind AS”) and other accounting principles
generally accepted in India, of the state of affairs of
the Company as at 31st March, 2026, its profit, total
comprehensive income, changes in equity and its cash
flows for the year ended on that date.
BASIS FOR OPINION
We conducted our audit of the Standalone Financial
Statements in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the
Companies Act, 2013. 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 Companies Act,
2013 and the Rules thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements and the ICAI‘s Code of Ethics. We believe
that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion
on the standalone financial statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our
professional 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.
REVENUE RECOGNITION FOR CONTRACTS WITH
CUSTOMERS
Reasons why the matter was determined to be a key
audit matter: The Company generates a significant
portion of the business by manufacturing AC Generators
and Electric Motors for various applications which are
specifically designed and tailor-made to suit the needs
of the customers based on their requirements and
specifications. The Company recognizes revenue in
accordance with IND AS 115 Revenue from contracts
with customers, generally when or as the entity satisfies
a performance obligation by transferring a promised
goods, services to a customer; i. e. when the customer
is able to direct the use of the transferred goods or
services and obtains substantially all of the remaining
benefits, provided a contract with enforceable rights
and obligations exists and amongst others collectability
of consideration is probable taking into account the
creditworthiness of the customers (Refer to note 1.5
& 26 to the Standalone Financial Statements). These
assessments include, in particular, the scope of deliveries
and services required to fulfil contractually defined
obligations.
Auditor's response: As part of our audit, in view of
the significance of the matter, the following key audit
procedures were performed by us.
• Assessed the compliance of the Company's revenue
recognition accounting policies with applicable
Indian Accounting Standards.
• We obtained an understanding of the Company's
internally established methods, processes and
control mechanisms from order to delivery.
We have also assessed the design and operating
effectiveness of the internal controls by obtaining
an understanding of such business transactions,
and testing controls over these processes.
• As part of our substantive audit procedures, we
evaluated the management's assumptions based on
a risk-based selection of a sample of contracts. We
have carried out verification of documents relating
to these sales that include the documents for final
testing, dispatch of goods or acknowledgment of
acceptance of the goods. We performed cut-off
procedures to ensure that year-end sales are in
accordance with the revenue recognition policy of
the Company. The performance of obligations is
considered complete, generally when the testing
of goods is completed/customer has accepted the
goods.
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 Management Discussion and Analysis, Board of
Directors' report, Corporate Governance Report and
other information published along with but does
not include the Standalone Financial Statements
and the Consolidated Financial Statements and our
auditor's report thereon. The Management Discussion
and Analysis, Board of Directors' Report, Corporate
Governance Report etc., is expected to be made available
to us after the date of this auditor's report.
Our opinion on the Standalone Financial Statements
does not cover the other information and we do not
and will 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 identified above when it becomes available
and, in doing so, consider whether the other information
is materially inconsistent with the Standalone Financial
Statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. When we
read the Management Discussion and Analysis, Board
of Directors' Report, Corporate Governance Report etc.,
if, we conclude that there is a material misstatement
therein, we are required to communicate the matter to
those charged with governance. In case of uncorrected
material misstatement, we are required to communicate
to other stakeholders as appropriate as well as to take
action applicable under applicable laws and regulations,
if any.
RESPONSIBILITIES OF MANAGEMENT AND
THOSE CHARGED WITH GOVERNANCE FOR THE
STANDALONE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for
the matters stated in section 134(5) of the Companies
Act, 2013 (“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 accounting principles generally
accepted in India, including the Indian Accounting
Standards (Ind AS) specified under Section 133 of the
Act. 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 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,
the Board of Directors 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 the 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 are also responsible for overseeing
the Company's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF
THE STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the Standalone Financial Statements as a whole
are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee that an audit
conducted in accordance with SAs will always detect
a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of
users taken on the basis of these Standalone Financial
Statements.
As part of an audit in accordance with SAs, we exercise
professional 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 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 Companies Act, 2013, 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 the 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
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
financial 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.
OTHER MATTER
We did not audit the Financial statements of Japan
Branch included in the Standalone Financial Statements
of the Company whose financial statements reflect total
assets of Rs.1,488.25 lakhs as at 31st March, 2026 and
total revenues of Rs.2,707.26 Lakhs for the year ended
on that date, as considered in the Standalone Financial
Statements. The financial statements of the Branch
have been audited by the branch auditor whose report
has been furnished to us, and our opinion in so far as
it relates to the amounts and disclosures included in
respect of the Branch, is based solely on the report of
such branch auditor.
Our opinion is not modified in respect of this matter.
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 section 143(11) of
the Act, we give in the ‘Annexure A' a statement on
the matters specified in the paragraph 3 and 4 of the
said Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, 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 and proper returns adequate for
the purpose of our audit have been received
from the Branch not visited by us, but one
branch is audited by the branch auditor except
for the matters stated in the paragraph 2(i)
(vi) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014.
c. The report on the accounts of one branch
office audited under section 143 by a person
other than the company's auditor has been
forwarded to us as required by sub-section
(8) of section 143 and have been properly dealt
with in preparing our report in the manner
considered necessary by us;
d. The Standalone Balance Sheet, the Standalone
Statement of Profit and Loss including Other
Comprehensive Income, the Standalone
Statement of Changes in Equity, and the
Standalone Statement of Cash Flow dealt with
by this Report are in agreement with the books
of account and with the returns received from
the branch not visited by us but audited by the
branch auditor.
e. In our opinion, the aforesaid Standalone
Financial Statements comply with the Ind AS
specified under Section 133 of the Act.
f. On the basis of the written representations
received from the directors as on 31st March,
2026 taken on record by the Board of Directors,
none of the directors is disqualified as on 31st
March, 2026 from being appointed as a director
in terms of Section 164 (2) of the Act.
g. The modifications relating to the maintenance
of accounts and other matters connected
therewith are as stated in the paragraph
2(b) above on reporting under Section 143(3)
(b) of the Act and paragraph 2(i)(vi) below on
reporting under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014.
h. With respect to the adequacy of the internal
financial controls with reference to these
Standalone Financial Statements of the
Company and the operating effectiveness of
such controls, refer to our separate report in
‘Annexure B';
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, in our opinion and to the
best of our information and according to the
explanations given to us:
i. the Company has disclosed pending
litigations in its Standalone Financial
Statements, the impact if any on the
final settlement of these litigations on
its financial position is not ascertainable
at this stage - Refer Note No. 36 of
Standalone 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 No 41(b) of standalone financial
statements; and
iii. there has been no delay in transferring
amounts, required to be transferred to
the Investor Education and Protection
Fund by the Company during the year -
Refer Note 41(c) of Standalone Financial
Statements.
iv.
(a) The Management has represented
that, to the best of their knowledge
and belief, as disclosed in Note
No.41(d) of the standalone financial
statements, no funds have been
advanced or loaned or invested
(either from borrowed funds or share
premium or any other sources or kind
of funds) by the Company to or in
any other person 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 their knowledge
and belief, as disclosed in Note
No.41(e) of the standalone financial
statements, no funds 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;
and
(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.
(a) The final dividend paid by the
Company during the year, in respect
of the dividend declared for the
previous year is in accordance with
Section 123 of the Act, to the extent it
applies to the payment of dividend.
(b) The interim dividend declared and
paid by the Company during the year
and until the date of this audit report
is in accordance with the section 123
of the Companies Act, 2013.
(c) As stated in note 47(b) to the
Standalone 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 proposed is in accordance
with the section 123 of the Act to
the extent it applies to proposed
dividend, as applicable.
vi. Based on our examination and audit
procedures carried by us which
included test checks, the Company has
used accounting software systems for
maintaining its books of account which
have the feature of recording audit
trail (edit log) facility and the same has
operated throughout the year for all
relevant transactions recorded in the
software systems except for Audit trail
for Bank Master creation was not enabled
during the year.
Further, during the course of our audit we
did not come across any instance of the
audit trail feature being tampered with
and the audit trail has been preserved
by the Company as per the statutory
requirements for record retention.
3. 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
and as per the verification of the records of the
company, the remuneration paid by the Company
to its directors during the year is within the limit
laid down under the provisions of section 197 of
the Act. The remuneration paid to any director
by the Company is not in excess of the limit laid
down under Section 197 of the Act. The Ministry
of Corporate Affairs has not prescribed any other
details under Section 197(16) of the Act which are
required to be commented upon by us.
For VARMA & VARMA
Chartered Accountants
FRN 004532S
ABRAHAM BABY CHERIAN
Partner
Place : Bangalore M. No. 218851
Date : May 14, 2026 ICAI UDIN : 26218851PDKATI5921
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