Page 214 - Hitachi IR 2025

INDEPENDENT AUDITOR’s REPORT
Independent Auditor’s Report
To the Members of Hitachi Energy India Limited
REPORT ON THE AUDIT OF THE FINANCIAL
STATEMENTS
OPINION
We have audited the accompanying financial statements
of Hitachi Energy India 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 / (Loss), the Cash Flow
Statement and the Statement of Changes in Equity for the
year then ended, and notes to the 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
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 / (loss), its cash flows and the
changes in equity for the year ended on that date.
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 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 financial statements.
BASIS FOR OPINION
We conducted our audit of the 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 Financial Statements’ section of our report.
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 for the financial year
ended March 31, 2025. 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. 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 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
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 financial statements.
Key audit matters How our audit addressed the key audit matter
Revenue recognition for long term projects and contract estimates
(as described in Note 2.3.1(d), 2.6, 15, 23 and Note 38 of the accompanying financial statements)
A significant portion of the Company’s business comprises of
long-term fixed price projects. Revenue from these contracts
is recognized in accordance with the principles laid down in
Ind AS 115, Revenue from Contracts with Customers and
as detailed in “material accounting policies” of the financial
statements.
In accordance with Ind AS 115, the Company classifies its
various contracts with customers and determines whether
revenue should be recognized at “point in time” or “over the
time” basis.
There are various areas involving complexities, judgements
and estimates involved in accounting for revenue recognized
on “over the time” basis, including:
• Estimation of total contract costs at inception and
remaining costs to completion, which is a critical factor in
measuring progress of a contract and amounts of revenue
to be recognized; and
In view of the significance of the matter we applied the
following audit procedures in this area, among others to obtain
sufficient appropriate audit evidence:
• We assessed the revenue recognition accounting policies
by comparing with applicable accounting standards.
• We tested key controls (both design and operating
effectiveness) with respect to revenue recognition and
related cost estimations.
• We carried out analytical procedures on revenue recognized
during the year ended to identify unusual variances.
• We performed substantive testing by selecting samples of
revenue transactions, recorded during the year ended by
testing the underlying documents using statistical sampling.
• We evaluated management’s estimates (contract costs and
risk provisions) by performing analytical procedures on
such estimates.
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