We have audited the financial statements of UTL Industries Limited ("the Company"), which
comprise the balance sheet as at 31st March 2025, and the statement of Profit and Loss, statement of
cash flows and statement of changes in equity for the year then ended, a summary of significant
accounting policies and other explanatory information in which are incorporated the financial
statements of UTL Industries Limited (hereinafter referred to as the "financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid 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 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 2025, and its loss and total
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 financial statements in accordance with the Standards on Auditing
("SA's") specified under section 143 (10) of the Companies Act, 2013. Our responsibilities under
those Standards are further described in Auditor's Responsibilities for the Audit of the 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 financial statements under the provisions of the
Act and the Rules made 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 obtained by us is sufficient and appropriate to provide a basis for
our audit opinion on the 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 financial statements of the current period. These matters were addressed in the
context of our audit of the 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.
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Revenue recognition - accounting for construction contracts
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Key audit matter
description
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There are significant accounting judgements including estimation
of costs to complete, determining the stage of completion and the
timing of revenue recognition.
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The Company recognises revenue and profit/loss based on stage
of completion based on the proportion of contract costs incurred
at the balance sheet date, relative to the total estimated costs of the
contract at completion. The recognition of revenue and
profit/loss, therefore, rely on estimates in relation to the total
estimated costs of each contract. For the SMS services Identify the
contact with the determination of the transaction price and
Recognize revenue when satisfies the performance obligations.
Revenue can be recognized over time or at a point in time,
depending on the nature of the SMS services and the terms of the
contract.
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Cost contingencies are included in these estimates to take into
account specific uncertain risks, or disputed claims against the
Company, arising within each contract. These contingencies are
reviewed by the Management on a regular basis throughout the
contract life and adjusted where appropriate.
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The revenue on contracts may also include variable considerations
(variations and claims). Variable consideration is recognised when
the recovery of such consideration is highly probable.
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Principal Audit Procedures
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Our procedures included:
• Testing of the design and implementation of controls involved
for the determination of the estimates used as well as their
operating effectiveness;
• Testing the relevant information technology systems access and
change management controls relating to contracts and related
information used in recording and disclosing revenue in
accordance with the new revenue accounting standard;
• Testing a sample of contracts for appropriate identification of
performance obligations;
• For the sample selected, reviewing for change orders and the
impact on the estimated costs to complete;
• Engaging technical experts to review estimates of costs to
complete sample contracts; and
• Performed analytical procedures for reasonableness of revenues
disclosed by type and service offerings
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Revenue recognition and measurement of contract assets in respect of un-invoiced amounts and
measurement of receivables in respect of overdue invoices.
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Key audit matter
description
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The Company, in its contract with customers, promises to transfer
distinct services to its customers which may be rendered in the
form of engineering, procurement and construction (EPC) services
through design-build contracts, and other forms of construction
contracts. The recognition of revenue is based on contractual
terms, which could range from cost plus fee to agreed unit price
to lump-sum arrangements. At each reporting date, revenue is
accrued for costs incurred against work performed that may not
have been invoiced. Identifying whether the Company's
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performance has resulted in a service that would be billable and
collectable were the works carried out have not been
acknowledged by customers as of the reporting date, or in the case
of certain defence contracts, where the evidence of work carried
out and cost incurred are covered by confidentiality arrangements
involves a significant amount of judgment.
• Recognition of revenue before formal acknowledgement of
receipt of services by the customer could lead to an over or under¬
statement of revenue and profit, whether intentionally or in error;
and
• Assessing the recoverability of amounts overdue against
invoices raised which have remained unsettled for a significantly
long period after the end of the contractual credit period also
involves a significant amount of judgment.
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Principal Audit Procedures
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The procedures performed included the following:
• Obtained an understanding of the Company's processes in
collating the evidence supporting the execution of work for each
disaggregated type of revenue. Auditors have also obtained an
understanding of the design of key controls for quantifying units
of items/services that would be invoiced and the application of
appropriate prices for each of such services;
• Tested the design and operating effectiveness of management's
key controls in collating the units of services delivered and in the
application of accurate prices for each of such services for samples
of the un-invoiced revenue entries, which included testing of
access and change management controls exercised in respect of
related information systems;
• Tested samples of un-invoiced revenue entries with reference to
the reports from the information system that records the costs
incurred against the services delivered to confirm the work
performed and application of appropriate margin applied for the
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respective services. The auditors have also tested whether
appropriate adjustments have been made for the element of
variable consideration related to committed service levels of
performance. With regard to incentives, auditors' tests were
focused to ensure that accruals were restricted to only those items
where contingencies were minimal;
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• Tested cut-offs for revenue recognized against un-invoiced
amounts by matching the revenue accrual against accruals for the
corresponding cost;
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• Reviewed the delivery and collection history of customers
against whose contract's un-invoiced revenue is recognised; and
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• Verification of subsequent receipts, post balance sheet date.
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Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The other information
comprises the information included in the Management discussion, Board's Report including
Annexures to Board's Report but does not include the financial statements and our auditor's report
thereon.
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements, or our knowledge obtained during the course of our audit or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act
with respect to the preparation of these financial statements that give a true and fair view of the
financial position, financial performance, including changes in equity and cash flows of the
Company in accordance with the Ind AS and other accounting principles generally accepted in India,
including the accounting standards specified under section 133 of the Companies Act, 2013.
This responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding 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 financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
In preparing the 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 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 is also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these 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 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 financial control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the
Act, we are also responsible for expressing our opinion on whether the Company has
adequate internal financial controls with reference to financial statements in place and the
operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by 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 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 financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in
aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the
financial statements may be influenced. We consider quantitative materiality and qualitative factors
in (i) planning the scope of our audit work and in evaluating the results of our work, and (ii) to
evaluate the effect of any identified misstatements in the financial statements.
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 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.
Report on Other Legal and Regulatory Requirements
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 purpose 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.
(c) The Balance Sheet, the Statement of Profit and Loss 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 financial statements comply with the Ind AS specified under Section
133 of the Act.
(e) On the basis of the written representations received from the directors as of 31st March 2025 taken
on record by the Board of Directors, none of the directors is disqualified as of 31st March 2025 from
being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the
Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure
1". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the
Company's internal financial controls over financial reporting.
(g) 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;
(h) In our opinion and to the best of our information and according to the explanations given to us,
the remuneration paid by the Company to its directors during the year is in accordance with the
provisions of section 197 of 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, 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 financial statements - Refer Note VII (C) to Annexure 2.
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses
iii. There were no amounts which were 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 it's knowledge and belief, other
than as disclosed in the notes to the accounts no funds (which are material either
individually or in the aggregate) 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, 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, no
funds (which are maintained either individually or in aggregate) have been received
by the Company from any person or entity, including foreign entities ("Funding
Parties"), with the understanding whether recorded in writing or otherwise, that the
Company, shall, 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.
(c) Based on the audit procedures that has 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
(j) The dividend has not been declared or paid during the year by the Company in accordance with
section 123 of the Act, as applicable.
(k) Section 143(3)(b) as to whether the Company has maintained proper books of account as
required by law is as under. In our opinion, proper books of account as required by law have been
kept by the company so far as it appears from our examination of those books except for the matters
stated in the paragraph below on reporting under Rule 11(g). However, Based on our examination
carried out in accordance with the Implementation Guidance on Reporting on Audit Trail under
Rule11(g) of the Companies (Audit and Auditors) Rules,2014 (Revised 2024 Edition) issued by the
Institute of Chartered Accountants of India, we report that the Company has Maintained its
accounting records in Software "Tally ERP 9" for period under the review and is in the process of
establishing necessary controls and documentation regarding the audit trail in future Consequently,
Company had used such software where audit trail feature had not enabled.
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 Companies Act, 2013, we give
in the "Annexure 2”, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the
extent applicable.
For S D T & Co.,
Chartered Accountants
FRN: 0112226W
Dilip K. Thakkar
Place: Vadodara (Partner)
Date: 24/05/2025 Membership No. 031269
UDIN: 25031269BMKYAR5477
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