We have audited the accompanying standalone Ind AS financial statements of Jindal Drilling & Industries Limited [‘the
Company'], which comprise the Balance Sheet as at 31st March 2025, the Statement of Profit and Loss [including other
comprehensive income], the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended
and a summary of the significant accounting policies and other explanatory information [hereinafter referred to as
‘standalone Ind AS financial statements'].
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[the Act”] in the
manner so required and give a true and fair view in conformity with the accounting principles generally accepted
in India including Indian Accounting Standards [“Ind AS”] specified under Section 133 of the Act, of, of the state of
affairs [financial position] of the Company as at 31st March, 2025, and its Profit [financial performance 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 financial statement in accordance with the Standards on Auditing as 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 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
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
standalone financial statement of the current period. These matters were addressed in the context of our audit of the
standalone financial statement 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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Key Audit Matter
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Auditor’s Response
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Provisions and Contingent Liabilities
The Company faces several legal, regulatory, and
tax disputes, the outcomes of which are uncertain
and could potentially lead to substantial liabilities.
Notably, there is a disputed income tax demand
amounting to Rs 512.21 Lakhs, which is detailed in
Note No. [p] of the Accounting Policy and further
elaborated in Note No. 33 to the Standalone Ind AS
Financial Statements.
The evaluation of the risks associated with these
litigations involves complex assumptions and
requires significant judgment to determine the
appropriate level of provisioning. This inherently
increases the risk that provisions and contingent
liabilities may either be inadequately provided for
or not fully disclosed.
Due to the complexity and judgment involved in
assessing these matters, they are considered to be
key audit matters.
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In order to get a sufficient understanding of litigations and
contingent liabilities, we have discussed the process of
identification implemented by the Management for such
provisions through various discussions with Company's legal
and finance departments. We read the summary of litigation
matters provided by the Company's/Unit's Legal and Finance
Team.
We read, where applicable, external legal or regulatory advice
sought by the Company. We discussed with the Company's/
Unit's Legal and Finance Team certain material cases noted
in the report to determine the Company's assessment of the
likelihood, magnitude and accounting of any liability that may
arise.
In light of the above, we reviewed the amount of provisions
recorded and exercised our professional judgment to assess
the adequacy of disclosures in the Standalone Ind AS financial
statements.
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Litigation, arbitrations, and claims
As detailed in Note 39A paragraphs [i] and [ii] of the
standalone Ind AS financial statements for the year
ending March 31, 2025, the Company is involved in
significant legal proceedings under arbitration with
a government party. These proceedings include a
suit for specific performance of a contract related
to the supply of drilling services, which is pending
before the Hon'ble Supreme Court.
The complexity of these litigation matters means
that the management's judgment regarding the
recognition and measurement of provisions for
these legal proceedings is inherently uncertain. The
assessment of such provisions is subject to change
as the outcomes of the legal cases evolve.
Given the complexities involved and the inherent
uncertainty in the management's judgments, this
matter is considered a key audit matter.
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Our audit procedures included:
• Assessing management's position through discussions
with the in-house legal expert and external legal opinions
obtained by the Company [where considered necessary] on
both the probability of success in the aforesaid cases, and the
magnitude of any potential loss.
• Discussion with the management on the development in
these litigations during the year ended March 31, 25.
• Roll out of enquiry letters to the Company's legal counsel
[internal/ external] and study the responses received from
them. Also assessed that accounting/disclosure made by the
Company are in accordance with the assessment of legal
counsel.
• Review of the disclosures made in the financial statements
in this regard.
• Obtained representation letter from the management on
the assessment of these matters
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Significant estimate and judgement in hedge
accounting including valuations thereof
Refer note no. [m] of accounting policy and note 8
& 37 to the Ind AS standalone financial statements.
The company enters into derivative financial
instruments which are mainly forward contracts
to manage its exposure of foreign currency risk of
highly probable forecasted transactions which arise
during the normal course of its business. These
contracts are measured at fair values leading to
derivative financial assets of Rupees 323.89 lakhs as
at March 31, 2025. The net movement of cash flow
hedge reserve for the year is Rupees 17.51 lakhs net
of taxes which is recorded in other comprehensive
income. The gain/loss on maturity of such derivative
instruments is recorded in the statement of profit
and loss along with the relevant hedged item.
Due to the changes in risks and estimates during
the lifecycle of the customer contracts in order to
apply hedge accounting management is required
to demonstrate that the underlying contract is
considered to be a highly probable transaction
that the hedges are highly effective and maintain
appropriate hedge documentation. A degree of
subjectivity is also required to determine when
hedge accounting is to be considered as ineffective.
Fair value movements of the forward contracts are
driven by movements in financial markets.
These transactions may have a significant financial
effect and have extensive accounting and reporting
obligations and accordingly this is considered as a
key audit matter.
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Our audit procedures included:
• we obtained understanding of the company's overall hedge
accounting strategy forward contract valuation and hedge
accounting process from initiation to settlement of derivative
financial instruments including assessment of the design
and implementation of controls and tested the operating
effectiveness of these controls.
• we assessed company's accounting policy for hedge
accounting in accordance with Ind AS.
• we tested the existence of hedging contracts by tracing to
the confirmations obtained from respective banks.
• we tested management's hedge documentation and
contracts on a sample basis.
• we assist in re-performing the year-end fair valuations
of derivative financial instruments on a sample basis and
compared these valuations with those recorded by the
company including assessing the valuation methodology and
key assumptions used therein.
• we assessed the disclosure of hedge transactions in the
financial statements.
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Identification and disclosures of Related Parties
The Company has related party transactions which
include, amongst others, sale and. purchase of
goods/services to its joint ventures, common
controlled entity, KMP and other related parties and
lending and borrowing to its joint ventures.
We focused on identification and disclosure
of related parties in accordance with relevant
accounting standards as a key audit matter.
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Our audit procedures amongst others included the
following:
• Evaluated the design and tested the operating effectiveness
of controls over identification and disclosure of related party
transactions.
• Obtained a list of related parties from the Company's
Management and traced the related parties to declarations
given by directors, where applicable, and to Note 35 of the
standalone Ind AS financial statements.
• Read minutes of meetings of the Board of Directors and
Audit Committee.
• Tested material creditors/debtors, loan outstanding/loans
taken to evaluate existence of any related party relationships;
tested transactions based on declarations of related party
transactions given to the Board of Directors and Audit
Committee.
• Evaluated the disclosures in the standalone Ind AS financial
statements for compliance with Ind AS 24.
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Accounting for Deferred and Capitalized
Refurbishment Expenses Related to Drilling Rigs
As described in Notes 8(A), 15, and 39B & C to the
standalone Ind AS financial statements, the Company
incurs significant refurbishment and preparation
costs in relation to both hired and owned drilling
rigs, which are accounted for differently depending
on the nature of the rig.
For hired rigs, preparation and certification costs
incurred prior to the commencement of drilling
services are deferred and amortized over the
duration of the related drilling contracts on a straight¬
line basis. These costs are considered directly
attributable to the Company's future performance
obligations under its drilling contracts.
In the case of owned rigs, refurbishment costs,
including those incurred for mandatory dry dock
activities at the end of each contract period
(typically every three years), are capitalized as part
of the property, plant and equipment. These costs
are recognized as part of the carrying amount of the
specific component of the rig and are depreciated
over the contract period as depreciation.
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Our audit procedures amongst others included the following:
Obtained an understanding of the Company's processes and
internal controls relating to the identification, classification, and
accounting treatment of refurbishment and preparation costs
incurred on hired and owned rigs.
For costs related to hired rigs, assessed the nature of contract
preparation and certification expenses by examining
underlying documentation such as vendor invoices, contracts,
and management's estimates to determine whether deferral
and straight-line amortization over the contract period was
appropriate.
For owned rigs, examined the nature of refurbishment and
dry dock expenses capitalized as part of property, plant and
equipment, and evaluated whether the capitalization criteria
were met. Verified the allocation of such costs to the appropriate
components of the rigs.
Assessed the reasonableness of the amortization and
depreciation periods applied by management, with reference
to the underlying contract terms, past practices, and regulatory
requirements.
Performed a test of details on a sample basis to verify the
accuracy and completeness of costs deferred or capitalized,
including validation of supporting documentation.
Reviewed the related disclosures made in the standalone
financial statements to assess compliance with the disclosure
requirements of the applicable Ind AS, including the nature,
accounting policy, and significant judgments involved.
By executing these audit procedures, we were able to evaluate
the appropriateness, accuracy, and completeness of the
deferred drilling expenses and capitalized refurbishment costs.
This enabled us to assess whether such expenditures have been
accounted for in accordance with the applicable accounting
standards, and the Company's stated accounting policies.
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Emphasis of Matter-
a] We draw attention to Note no. 39 [A] to the Standalone Financial Statement relating to JDIL had a dispute with
ONGC Ltd and this dispute was under litigation for last more than 15 years. In view of Hon'ble Supreme Court
of India order dated 27th April 2022, New Arbitration Tribunal (Tribunal) was constituted to decide dispute of
subsisting between JDIL and ONGC. Hon'ble Tribunal has pronounced the final order on 03-04-2025. As per this
order JDIL , respondent No2 has been ordered to be deleted from the array of parties.
In view of the abovesaid Award receivables of Rs 6632.81 lacs, appearing in financial statements will be adjusted
against other financial liabilities and balance of Rs 10042.77 lacs shall be transferred to profit & loss account.
Meanwhile JDIL will take steps to get release the bank guarantee given for an amount of Rs. 166.25 crore already
deposited by ONGC with JDIL, in terms of order dated 27th April 2022 of the Hon'ble Supreme Court. Now in view
of the order of Hon'ble tribunal order dated 3rd April 2025, JDIL will take financial impact arising from this order in
the next financial year. Meanwhile JDIL would be able to get the bank guarantee released.
(For detailed notes, refer note no.39)
Our Opinion is not modified in this matter.
b) We draw attention to Note no. 39 (C) to the Standalone Financial Statement relating to Refurbishment Expenses
of owned Rig - The company has incurred a total of Rs.17,237.67 lakhs on the refurbishment of owned Rig, namely
Jindal Supreme. This cost incurred on account of refurbishment expenses has been capitalised in accordance with
Ind-AS -16 of jack-up Rig Jindal Supreme and this capitalised component of amount has been depreciated over
the contract period starting from 15th October 2024.Therefore, depreciation has been increased to Rs. 2517.18 lakhs
and the same has decreased in operating expenses.
Our Opinion is not modified in this matter.
(For detailed notes, refer note no.39)
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 and Analysis, Board's Report including Annexures to Board's
Report, Business Responsibility report, Corporate Governance and shareholder's information, but does not include the
financial statements and our auditor's report thereon. The report containing other information 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 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
and, in doing so, consider whether the other information is materially inconsistent with the standalone financial
statements, or our knowledge obtained during the course of our audit or otherwise appears to 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.
Management’s Responsibility 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 Ind AS financial statements that give a true and fair view
of the financial position, financial performance including other comprehensive income, cash flows and changes in
equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian
Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued thereunder.
This responsibility also includes the 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 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 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.
Those Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditors’ Responsibility 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 judgement and maintain professional skepticism
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, international 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 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 system in place and 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 statement 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.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate,
makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial
statements may be influenced. We consider quantitative materiality and qualitative factors in [i] planning the scope
of our audit work and [ii] to evaluate the effect of any identified misstatements in the standalone financial statements.
We communicate with those charged with the 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 financial statements of current period and are therefore the key audit
matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosures 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 (Auditors' 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 Order.
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 ap¬
pears from our examination of those books;
c. the Balance Sheet, the Statement of Profit and Loss, the Statement of Cash Flows and the Statement of Chang¬
es 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 relevant rule issued thereunder;
e. on the basis of the written representations received from the directors as on 31 March 2025 taken on record
by the Board of Directors, none of the directors is disqualified as on 31 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 B'. our report expresses an
unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls
over financial reporting; and
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, in our opinion and to the best of our information and according to
the explanations given to us, the remuneration paid/provided by the Company to its directors during the year
in accordance with the provisions of section 197 of the Act.
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 Ind
AS financial statements. Refer to Note 33 to the standalone Ind AS financial statements;
ii. The Company does not have any material foreseeable losses on long term contracts including derivative
contracts, Refer note no. 37 in the Standalone financial statement.;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Company;
iv. (i) the management has represented that, to the best of its knowledge and belief, no funds, have been
advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind funds) by the Holding Company or its subsidiary companies incorporated in India to or in any
other persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether re¬
corded 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;
(ii) the management has represented that, to the best of it's knowledge and belief, other than as dis¬
closed in the notes to accounts, 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 in directly 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
(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused us to believe that the representation under sub-clause(iv)
(i) and(iv)(ii) contain any material misstatement.
v. The final dividend proposed in the previous year, declared and paid by the Company during the year is
in accordance with Section 123 of the Act, as applicable.
As stated in Note No 51 (v) to the standalone financial statement, 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. As described in note no. 51 (iii) to the standalone financial statement, based on our examination, The
company has been maintaining its books of accounts in the ERP which has feature of recording audit trail
of each and every transaction made in the account along with the date when such changes were made
and ensuring that the audit trail cannot be disabled throughout the year as required by proviso to sub rule
(1) of rule 3 of The Companies (Accounts) Rules, 2014 known as the Companies (Accounts) Amendment
Rules, 2021.
Further, during the course of our audit we did not come across any instance of audit trail feature being
tempered with and the audit trail has been preserved by the Company as per the statutory requirements
for record retention
For Kanodia Sanyal & Associates
Chartered Accountants
FRN:008396N
(R.K. Kanodia)
Partner
Place: New Delhi Membership No.: 016121
Date: 26th May, 2025 UDIN: 25016121BMOTLJ1379
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