Pennar Industries Ltd.
|BSE: 513228||Sector: Metals & Mining|
|NSE: PENIND||ISIN Code: INE932A01024|
|BSE 09:18 | 01 Feb||54.95||
|NSE 09:07 | 01 Feb||55.25||
|Mkt Cap.(Rs cr)||742|
|Mkt Cap.(Rs cr)||741.50|
Pennar Industries Ltd. (PENIND) - Auditors Report
Company auditors report
To The Members of Pennar Industries Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements ofPennar Industries Limited ("the Company") which comprise the Balance Sheet asat March 31 2021 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of significant accounting policies and other explanatory information(hereinafter referred to as "the Standalone financial statements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021and its profit total comprehensive income its cash flows and the changes in equity forthe year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in the Auditor'sResponsibility 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 Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the standalone financial statements under the provisions of theAct and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the standalone financial statements.
Emphasis of Matter
We draw your attention to Note 34 of the standalone financialstatement which describes that certain estimates and judgements were made related toCovid-19 pandemic wherein the eventual outcome of the impact of this global healthpandemic may be different from those estimated by the management.
Our opinion is not modified in respect of this matter.
Key Audit Matter
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
Information Other than the Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Director's Report Report on Corporate Governance and BusinessResponsibility Report but does not include the consolidated financial statementsstandalone financial statements and our auditor's report thereon. The ManagementDiscussion and Analysis Director's Report Report on Corporate Governance and BusinessResponsibility Report is expected to be made available to us after the date of thisauditor's report.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
When we read the Management Discussion and Analysis Director's ReportReport on Corporate Governance and Business Responsibility Report if we conclude thatthere is a material misstatement therein we are required to communicate the matter tothose charged with governance as required under SA 720 'The Auditor's responsibilitiesRelating to Other Information'
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the Ind AS/ Accounting Standards and other accounting principles generallyaccepted in India. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and 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 standalone financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements management isresponsible 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 management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibility for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone 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 thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin
(i) planning the scope of our audit work and in evaluating the resultsof our work; and
(ii) to evaluate the effect of any identified misstatements in thestandalone financial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act:
a. We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b. In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the relevant books of account.
d. In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2021 from being appointed as a director in termsof Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
g. With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended inour opinion and to the best of our information and according to the explanations given tous the remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act.
h. With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.
Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financialreporting of Pennar Industries Limited ("the Company") as of March 31 2021 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. 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.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting of the Company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting 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 control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2021 based on thecriteria for internal financial control over financial reporting established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
i. (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by theManagement in accordance with a regular programme of verification which in our opinionprovides for physical verification of all the fixed assets at reasonable intervals.According to the information and explanations given to us no material discrepancies werenoticed on such verification.
(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deed onproperty provided to us we report that the title deeds comprising all the immovableproperties of land and buildings which are freehold are held in the name of the Companyas at the balance sheet date. Immovable properties of land whose title deeds have beenpledged as security for loans are held in the name of the company based on theconfirmations received by us from the lenders. In respect of immovable properties of landand buildings that have been taken on lease the lease agreements are in the name of theCompany where the Company is the lessee in the agreement as at the balance sheet date.
ii. As explained to us the inventories were physically verified duringthe year by the Management at reasonable intervals and no material discrepancies werenoticed on physical verification.
iii. According to the information and explanations given to us theCompany has granted loans unsecured to companies covered in the register maintainedunder section 189 of the Companies Act 2013 in respect of which:
(a) The terms and conditions of the grant of such loans are in ouropinion prima facie not prejudicial to the Company's interest.
(b) The schedule of repayment of principal and payment of interest hasbeen stipulated and repayments or receipts of principal amounts and interest have beenregular as per stipulations.
(c) There is no overdue amount remaining outstanding as at theyear-end.
iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 and 186 of theCompanies Act 2013 in respect of grant of loans making investments and providingguarantees and securities as applicable.
v. According to the information and explanations given to us theCompany has not accepted any deposit falling within the purview of the provisions ofSection 73 to 76 of the Companies Act 2013 and does not have any outstanding unclaimeddeposits as at March 31 2021 and therefore reporting under clause (v) of the Order isnot applicable.
vi. The maintenance of cost records has been specified by the CentralGovernment under section 148(1) of the Companies Act 2013. We have broadly reviewed thecost records maintained by the Company pursuant to the Companies (Cost Records and Audit)Rules 2014 as amended prescribed by the Central Government under sub-section (1) ofSection 148 of the Companies Act 2013 and are of the opinion that prima facie theprescribed cost records have been made and maintained. We have however not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.
vii. According to the information and explanations given to us inrespect of statutory dues:
(a) The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income- tax Goods& Services Tax Customs Duty cess and other material statutory dues applicable to itto the appropriate authorities.
(b) There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income-tax Goods & Services Tax Customs Duty cessand other material statutory dues in arrears as at March 31 2021 for a period of morethan six months from the date they became payable.
(c) Details of dues of Excise Duty Service Tax Entry Tax and ValueAdded Tax which have not been deposited
as on March 31 2021 on account of disputes are given below:
There are no dues of Income-tax and Customs Duty as on March 31 2021on account of disputes.
viii. In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of loans or borrowings tofinancial institutions banks and government. The Company has not issued any debentures.
ix. In our opinion and according to the information and explanationsgiven to us the moneys raised by way of initial public offer have been applied by theCompany during the year for the purposes for which they were obtained other than temporarydeployment pending application of such proceeds. The Company has not raised any money byway of further public offering (including debt instruments).
x. To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company and no fraud on the Company by itsofficers or employees has been noticed or reported during the year.
xi. In our opinion and according to the information and explanationsgiven to us the Company has paid/ provided managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act 2013.
xii. The Company is not a Nidhi Company and hence reporting underclause (xii) of the Order is not applicable.
xiii. In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Section 177 and 188 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the financial statements as required bythe applicable accounting standards.
xiv. During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andhence reporting under clause (xiv) of the Order is not applicable to the Company.
xv. In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non-cash transactionswith its directors or persons connected with him and hence provisions of section 192 ofthe Companies Act 2013 are not applicable.
xvi. The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.