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Panasonic Carbon India Company Ltd.

BSE: 508941 Sector: Engineering
NSE: PANCARBON ISIN Code: INE013E01017
BSE 00:00 | 07 Dec 444.80 1.75
(0.39%)
OPEN

441.15

HIGH

447.40

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440.00

NSE 05:30 | 01 Jan Panasonic Carbon India Company Ltd
OPEN 441.15
PREVIOUS CLOSE 443.05
VOLUME 2779
52-Week high 644.00
52-Week low 401.00
P/E 11.28
Mkt Cap.(Rs cr) 214
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 441.15
CLOSE 443.05
VOLUME 2779
52-Week high 644.00
52-Week low 401.00
P/E 11.28
Mkt Cap.(Rs cr) 214
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Panasonic Carbon India Company Ltd. (PANCARBON) - Auditors Report

Company auditors report

To the Members of Panasonic Carbon India Co. Limited Report on the Audit of theFinancial Statements Opinion

We have audited the accompanying financial statements of Panasonic Carbon India Co.Limited ("the Company") which comprise the balance sheet as at 31 March2021 and the statement of profit and loss (including other comprehensive income)statement of changes in equity and statement of cash flows for the year then ended andnotes to the financial statements including a summary of the significant accountingpolicies and other explanatory information. (hereinafter referred to as "financialstatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Revenue recognition and related party transactions

Refer to notes 3.9 23 and 34 to the financial statements.

Key audit matter How the matter was addressed in our audit
The Company manufactures and sells carbon rods. Revenue is recognised as per the principles laid down under Ind AS 115 Revenue from contracts with customers. 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 identified revenue recognition as a key audit matter because the Company and its external stakeholders focus on revenue as a key performance indicator. This could create an incentive for revenue to be overstated or recognised before control has been transferred. We assessed the appropriateness of the revenue recognition accounting policies by comparing with applicable accounting standards.
Majority of revenues are derived from related parties. Related party transactions are regulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 as well as Companies Act 2013. In addition the relevant accounting standards require specific disclosures of related parties and transactions with them to be made in the financial statements. We evaluated the design and operating effectiveness of the relevant key controls with respect to revenue recognition segregation of duties and collection on selected transactions.
We tested underlying documents for revenue recorded during the year using statistical sampling to test that the revenues and trade receivables are recorded appropriately taking into consideration the terms and conditions of the customer orders including the shipping terms.
We obtained independent confirmation of balance from the Company's customers on a sample basis. We tested on a sample basis specific revenue transactions recorded before and after the financial year end date to determine whether the revenue had been recognised in the appropriate financial period.
We made inquiries of management regarding the identity of the related parties including changes from the prior year and the nature of relationships and of the transactions with them. We also maintained alertness regarding related party information when examining records or documents regarding undisclosed related party relationships or transactions.
We evaluated compliance of related party transactions with applicable laws and regulations.
We tested whether the pricing of related party transactions are undertaken at arm's length.
Assessed the adequacy and appropriateness of the disclosures made in accordance with the relevant accounting standards and applicable laws and regulations.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon. The annual report is expected to be made available to us after the date of thisauditor's report.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. When we read the annual report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and take necessary actions as required under applicable laws and regulations.

Management's and Board of Directors' Responsibility for the Financial Statements

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements Management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless Board of Directors either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures in the financial statements made by theManagement and Board of Directors.

Conclude on the appropriateness of the Management and Board of Directors use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. As required by Section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so faras it appears from our examination of those books.

c) The balance sheet the statement of profit and loss (including other comprehensiveincome) the statement of changes in equity and the statement of cash flows dealt with bythis Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

3. With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us: a) TheCompany has disclosed the impact of pending litigations as at 31 March 2021 on itsfinancial position in its financial statements - Refer Note 33 to the FinancialStatements;

b) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable loss.

c) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company d) The disclosures in the financialstatements regarding holdings as well as dealings in specified bank notes during theperiod from 8 November 2016 to 30 December 2016 have not been made in these financialstatements since they do not pertain to the financial year ended 31 March 2021.

4. With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

for B S R & Co. LLP

Chartered Accountants

Firm Registration No: 101248W/W-100022
Harsh Vardhan Lakhotia

Partner

Place: Chennai Membership No. 222432
Date: 28 June 2021 ICAI UDIN: 21222432AAAABZ9093

Annexure A to the Independent Auditor's Report to the Members of Panasonic Carbon IndiaCo. Limited for the year ended 31 March 2021 (Referred to in paragraph 1 under‘Report on Other Legal and Regulatory Requirements' section of our report to theMembers of Panasonic Carbon India Co. Limited of even date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a program of verification to cover all the items of fixed assets ina phased manner over two years which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the program certain fixedassets were physically verified by the management during the year. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) The inventory have been physically verified by the management during the periodand the discrepancies noticed on such verification between the physical stocks and thebook records were not material. In our opinion the frequency of such verification isreasonable.

(iii) The Company has not granted any loan secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register required undersection 189 of the Companies Act 2013. Accordingly paragraph 3(iii) of the Order is notapplicable.

(iv) The Company has not granted any loans or made any investments or given anyguarantee or provided any security as covered under section 185 and 186 of the CompaniesAct 2013. Accordingly paragraph 3(iv) of the Order is not applicable.

(v) The Company has not accepted deposits from the public during the year. Accordinglyparagraph 3(v) of the Order is not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records underSection 148(1) of the Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. However we have not made a detailedexamination of the records with a view to determine whether they are accurate or complete.(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted /accrued in the books ofaccount in respect of undisputed statutory dues including employees' state insuranceincome-tax duty of customs goods and services tax and any other material statutory dueshave generally been regularly deposited with the appropriate authorities. As explained tous the Company did not have any dues on account of sales tax service tax value addedtax duty of excise and cess.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax duty ofcustoms goods and service tax cess and any other material statutory dues were in arrearsas at 31 March 2021 for a period of more than six months from the date they becamepayable except for the items as set out below.

Name of the statute Nature ofdues Amount (INR in thousands) Period to which amountrelates Due date Date of payment
Employees' Provident Funds and Miscellaneous Provisions Act 1952 Providentfund 1794.65 April 2019- March 2020 Various dates Not yetpaid

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax service tax duty of customs and goods and services tax which havenot been deposited with the appropriate authorities on account of a dispute except foritems as set out below.

Name of the statute/ period to which it relates Nature of dues Amount (INR in thousands) Period to which amount relates Forum where the dispute is pending
Income Tax Act 1961 Income Tax 1739.64 2003-2004 Income Tax Appellate Tribunal(ITAT)
Income Tax Act 1961 Income Tax 81.69 2009-2010 Assessing Officer
Finance Act 1994 Service tax 6.76 For the period 2010-2013 Appellate Tribunal
Andhra Pradesh Tax on Entry of Goods into Local Areas Act 2001 VAT 6753.36 For the period 2014-2018 Appellate Joint Commissioner (ST)

(viii) In our opinion and according to the information and explanations given to usthe Company did not have any outstanding loans or borrowings to any financial institutionbank government or debenture holders during the year. (ix) The Company did not raise anymoney by way of initial public offer or further public offer (including debt instruments)and term loans during the year. Accordingly paragraph 3(ix) of the Order is notapplicable.

(x) According to the information and explanations given to us no fraud by or anymaterial fraud on the Company by its officers or employees has been noticed or reportedduring the course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid or provided for managerialremuneration during the year in accordance with the requisite approvals as per provisionsof Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review. Accordingly paragraph 3(xiv) of the Order is not applicable. (xv)According to the information and explanations given to us and based on our examination ofthe records of the Company the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3(xv) of the Order is notapplicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable.

for B S R & Co. LLP
Chartered Accountants
Firm Registration No: 101248W/W-100022
Harsh Vardhan Lakhotia
Partner
Place: Chennai Membership No. 222432
Date: 28 June 2021 ICAI UDIN: 21222432AAAABZ9093

Annexure B to the Independent Auditor's Report to the members of Panasonic Carbon IndiaCo. Limited for the year ended 31 March 2021

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to financial statementsof Panasonic Carbon India Co. Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2021 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit ofInternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

for B S R & Co. LLP
Chartered Accountants
Firm Registration No: 101248W/W-100022
Harsh Vardhan Lakhotia
Partner
Place: Chennai Membership No. 222432
Date: 28 June 2021 ICAI UDIN: 21222432AAAABZ9093

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