1. We have audited the accompanying standalone
financial statements of Thermax Limited (“the
Company”), which comprise of the Standalone
Balance Sheet as at March 31, 2026, and 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 policy information and other
explanatory information.
2. 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 accounting principles generally
accepted in India, of the state of affairs of the Company
as at March 31,2026, and total comprehensive
income (comprising of profit and other comprehensive
income), changes in equity and its cash flows for the
year then ended.
Basis for Opinion
3. We conducted our audit 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 “Auditors’
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 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 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 opinion.
Key audit matters
4. Key audit matters are those matters that, in our
professional judgement, 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.
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Key audit matter
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How our audit addressed the key audit matter
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1. Accounting for Revenue from Contracts with Customers
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As
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part of our audit, our procedures included the following:
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The total revenue for the year is recognised based on the
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Understood and evaluated the design and tested the operating
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accounting policies disclosed in Note 21 to the standalone
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effectiveness of internal financial controls pertaining to
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financial statements.
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revenue recognition.
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The Company recognises revenue in accordance with Ind
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Assessed the appropriateness of the revenue recognition
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AS 115 “Revenue from Contracts with Customers”, based on
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accounting policies in accordance with Ind AS 115 “Revenue from
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the nature and type of contract (i.e., products, projects and
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Contracts with Customers”.
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services) involved. This involves application of significant
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Obtained and examined, on a sample basis, underlying documents
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judgements including:
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to assess the nature of contractual performance obligations, the
timing of transfer of control and other relevant terms with respect
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• identification of distinct performance obligations;
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to revenue recognition.
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• allocation of consideration to identified performance
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Tested, on a sample basis, revenue transactions recorded closer
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obligations; and
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to the financial year-end date by verifying the underlying dispatch
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• recognition of revenue over a period of time or at a point in
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documents to assess whether revenue is recognised in the correct
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time, based on the terms of the contract.
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financial period.
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We considered the above as a key audit matter as there is an
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With respect to a sample of contracts wherein revenue is recognised
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inherent and presumed risk of fraud in revenue recognition,
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under ‘over a period of time’ method, performed the following
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including identification of contractual obligations, timing
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procedures:
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of transfer of control, complexities involved and significant
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Obtained management’s calculations of the measure of progress
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management judgement in making forecasts of future
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determined using the input method, tested the mathematical
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cost to complete the contract, assessment of contract risk
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accuracy of the cost to complete and re-performed the calculation
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contingencies, expected cost savings or cost overruns,
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of revenue recognised during the year.
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right to receive payments for performance completed till
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Verified supporting documents and performed cut off procedures
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date, recognition for potential onerous obligations, variable
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for contract related costs incurred during the reporting period.
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consideration (liquidated damages and others), all of which
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Evaluated Management’s assessment of right to receive payments
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have a consequential impact on the amount of revenue
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for performance completed till date, variable consideration,
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recognised in the standalone financial statements.
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claims, penalties, price or scope variations.
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Tested the actual cost incurred and billing done during the year
with supporting documents.
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Obtained the breakdown of estimated total contract costs and
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tested elements of the committed costs by obtaining executed
underlying documents.
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Performed procedures on balance cost estimation including
contingencies, compared actual costs to budgeted costs and
assessed the variances with management and the rationale for
recording changes to the estimated cost during the year.
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Evaluated the adequacy of the presentation and disclosures in
standalone financial statements.
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2. Assessment of Impairment of trade receivables and
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As
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part of our audit, our procedures included the following:
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contract assets
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Evaluated the design and tested the operating effectiveness of
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As at March 31, 2026, the Company recorded an impairment
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the internal controls over the Management's assessment for
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allowance of INR 309.80 crore for its trade receivables and
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impairment of trade receivables and contract assets.
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contract assets (Refer note 7 (c)).
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Assessed the appropriateness of the Company’s accounting
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Impairment of financial assets and contract assets is
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policies for recognition and measurement of ECL in accordance
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accounted through allowance for Expected Credit Losses
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with Ind AS 109 “Financial Instruments".
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(ECL) in accordance with Ind AS 109 "Financial Instruments".
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Obtained an understanding of Management’s assessment
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Management uses a provision matrix to compute impairment
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of recoverability of outstanding trade receivables
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under ECL in respect of such balances.
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and contract assets and evaluated the consistency of
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The assumptions used for estimating the ECL in respect of
these balances is an area which is influenced by significant
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Management’s assessment with underlying documents and
recovery expectations.
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management judgement. It requires the Company to estimate
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Assessed the completeness of balances considered for ECL
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the timing and amount of realisation of these receivables
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and tested its ageing on a sample basis by agreeing those to
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based on past collection experience, contract status, and
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contractual terms.
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consideration of other internal and external sources of
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Tested the key assumptions and arithmetical accuracy of the
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information. Given the relative significance of these balances to
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provision matrix model used by the Management to calculate
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the standalone financial statements, management judgement
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the probability of default and estimate the ECL, including
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and uncertainties involved to assess the recoverability of trade
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specific provisions, if any, in respect of trade receivables and
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receivables and contract assets, we determined this to be a key
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contract assets.
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audit matter.
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Evaluated the adequacy of the presentation and disclosures in the
standalone financial statements.
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Key audit matter
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How our audit addressed the key audit matter
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3. Impairment of investments in certain subsidiaries
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As
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part of our audit, our procedures included the following:
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The Company’s impairment provision for investment in
subsidiaries as at March 31,2026 is INR 233.11 crore against
investments of INR 1,867.92 crore (refer note 5 (a)).
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Understood and evaluated the design and tested the operating
effectiveness of internal controls over the Management's
assessment of impairment of investments in subsidiaries,
including preparation of the DCF model.
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The Company accounts for investments in subsidiaries at cost
(less accumulated impairment, if any).
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Evaluated the Company's accounting policy in respect of
impairment assessment of investment in subsidiaries.
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The Management, with assistance of experts, wherever
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required, has estimated the recoverable value based on the
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Evaluated the competence, capability, independence and
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‘value in use’ approach determined using discounted cash flow
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objectivity of the management’s expert.
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(‘DCF’) model requiring judgements with respect to key inputs/
assumptions like:
• Future cashflows
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Assessed the cash flow projections and assumptions used in the
DCF model, tested the mathematical accuracy and perused the
report of the management’s expert.
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Together with auditor's valuation expert, tested the
appropriateness of key assumptions like discount rate and
terminal growth rate and performed sensitivity analysis within
a reasonable and foreseeable range to corroborate that the
recoverable amount of the investment is not materially different to
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• Discount rate (weighted average cost of capital)
• Terminal growth rate
• Economic and entity specific factors
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The recoverable value is highly sensitive to changes in the
above management assumptions and could lead to material
changes in the estimated recoverable amount, impacting both,
potential impairment charge or reversal and, accordingly, this
has been considered as a key audit matter.
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the Company's valuation.
Evaluated the adequacy of the presentation and disclosure of
impairment in the standalone financial statements.
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Other Information
5. 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 financial statements
and our auditors’ report thereon. The Annual Report is
expected to be made available to us after the date of
this auditors’ report.
Our opinion on the standalone financial statements
does not cover the other information and we 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 Annual 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 action as
applicable under the relevant laws and regulations.
Responsibilities of Management and
those charged with governance for the
Standalone Financial Statements
6. 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
financial statements that give a true and fair view
of the financial position, financial performance,
changes in equity and cash flows of the Company in
accordance with the accounting principles generally
accepted in India, including the Indian Accounting
Standards 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 judgements
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.
7. In preparing the standalone financial statements,
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 Board of Directors either intends to
liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
8. Those Board of Directors are also responsible for
overseeing the Company’s financial reporting process.
Auditors’ Responsibilities for the Audit of
the Standalone Financial Statements
9. 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 auditors’ 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.
10. As part of an audit in accordance with SAs, we exercise
professional judgement 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 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.
• 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 auditors’
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 auditors’ 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.
11. 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.
12. 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.
13. 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 auditors’ 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.
belief, as disclosed in the Note 31 to
the standalone 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 that we
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 dividend declared and paid by the
Company during the year in respect of
the prior year ended March 31, 2025 is in
accordance with Section 123 of the Act to the
extent it applies to declaration and payment
of dividend.
Further, as stated in note 15(b) to the
standalone financial statements, the Board
of Directors of the Company has 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.
Other Matter
14. The standalone financial statements of the Company
for the year ended March 31,2025, were audited by
prior auditors under the Act who, vide their report
dated May 09, 2025, expressed an unmodified opinion
on those standalone financial statements.
Report on other legal and regulatory
requirements
15. 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 B a
statement on the matters specified in paragraphs 3
and 4 of the Order, to the extent applicable.
16. 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, except for the matters stated in paragraph
16(h)(vi) below on reporting under Rule 11(g) of
the Companies (Audit and Auditors) Rules, 2014
(as amended).
(c) 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 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 Indian Accounting
Standards specified under Section 133 of the Act.
(e) On the basis of the written representations
received from the directors as on March 31,2026,
taken on record by the Board of Directors, none of
the directors is disqualified as on March 31,2026,
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 our remarks in paragraph 16(b) above
and paragraph 16(h)(vi) below.
(g) With respect to the adequacy of the internal
financial controls with reference to standalone
financial statements of the Company and the
operating effectiveness of such controls, refer to
our separate Report in “Annexure A”.
(h) With respect to the other matters to be included in
the Auditors’ 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 30 to the standalone
financial statements.
ii. The Company has made provision, as
required under the applicable law or
Indian Accounting Standards, for material
foreseeable losses, if any, on long-term
contracts including derivative contracts -
Refer Note 17 and Note 18 to the standalone
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 during the year.
iv. (a) The management has represented
that, to the best of its knowledge
and belief, other than as disclosed in
Note 31 to 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(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
vi. Based on our examination, which included
test checks, the Company has used multiple
accounting software for maintaining its books
of account, which have a feature of recording
audit trail (edit log) facility and that has
operated throughout the year for all relevant
transactions recorded in the software, except
as disclosed in note 43 to the standalone
financial statements. During the course
of performing our procedures, other than
the instances of audit trail not maintained
(as disclosed in note 43 to the standalone
financial statements) where the question
of our commenting does not arise, we did
not notice any instance of audit trail feature
being tampered with. Further, the audit trail,
to the extent maintained in the prior year, has
been preserved by the Company in respect
of the software described in note 43 to the
standalone financial statements as per the
statutory requirements for record retention.
17. The Company has paid/ provided for managerial
remuneration in accordance with the requisite
approvals mandated by the provisions of Section 197
read with Schedule V to the Act.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Amit Borkar
Partner
Membership Number: 109846
UDIN: 26109846NVWXVZ9769
Place: Pune
Date: May 7, 2026
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