PG Electroplast Ltd.
|BSE: 533581||Sector: Engineering|
|NSE: PGEL||ISIN Code: INE457L01011|
|BSE 11:32 | 27 Jun||912.90||
|NSE 11:19 | 27 Jun||913.10||
|Mkt Cap.(Rs cr)||1,937|
|Mkt Cap.(Rs cr)||1937.17|
PG Electroplast Ltd. (PGEL) - Auditors Report
Company auditors report
THE MEMBERS OF PG ELECTROPLAST LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of PGElectroplast Limited ("the Company") which comprise the balance sheet as at31st March 2021 and the statement of profit and loss statement of changes in equity andstatement of cash flows for the year then ended and notes to the standalone financialstatements including a summary of significant accounting policies and other explanatoryinformation.
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 in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2021 and its profit changes inequity 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) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Standalone Financial Statements section of our report. We are independent ofthe Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Companies Act 2013 andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Key Audit Matters
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.
For each matter below our description of how our audit addressed thematter is provided in that context.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Responsibilities of Management and those Charged with Governance forthe Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Companies Act 2013. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements the Board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors either intends to liquidate theCompany or to cease operations 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 Responsibilities 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 control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)0) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by 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.
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 matterscommunicated with those charged with governance we determine those matters that were ofmost significance in the audit of the standalone financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of section143(11) of the Companies Act 2013 we give in the "Annexure-A" a statement onthe matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Companies Act 2013 we reportthat:
(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 havebeen 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 Statementof Changes in Equity and the Cash Flow Statement dealt with by this Report are inagreement with the books of account.
(d) In our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standards specified under Section 133 of the CompaniesAct read with Companies (Indian Accounting Standards) Rules 2015 as amended.
(e) On the basis of the written representations received from thedirectors as on 31st March 2021 and taken on record by the Board of Directors none ofthe directors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure-B".
(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:
In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with 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 inour 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 itsfinancial position in its standalone financial statements - Refer Note 39 to thestandalone financial statements.
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.
Annexure A to Independent Auditor's Report
1. a. The Company has generally maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.
b. According to the information and explanations given to us all fixedassets have been physically verified by the management in a phased periodical mannerwhich in our opinion is reasonable having regard to the size of the Company and nature ofits assets. No material discrepancies were noticed on such physical verification.
c. According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
In respect of immovable properties been taken on lease and disclosed asproperty plant and equipment in the standalone financial statements the lease agreementsare in the name of the Company.
2. As explained to us the inventories except goods in transit havebeen physically verified by the management at reasonable intervals during the year or atyear end at all locations of the company. The discrepancies noticed on verificationbetween the physical stocks and book records which in our opinion were not material havebeen properly dealt with in the books of account.
3. According to information and explanations given to us and on thebasis of our examination of the books of account the company has not granted any loanssecured or unsecured to companies firms Limited Liability Partnerships or other partiescovered in the register maintained under section 189 of the Companies Act 2013.Accordingly the paragraph 3(iii)(a) 3(iii)(b) and 3(iii)(c) of the order is notapplicable to the Company.
4. In our opinion and according to information and explanations givento us the company has not given any loans made investments give guarantees or securityduring the year which is covered under provisions of section 185 and 186 of the Act.Accordingly the paragraph 3(iv) of the order is not applicable to the Company.
5. According to information and explanations provided by themanagement we are of the opinion that the Company has not accepted any deposits frompublic covered under section 73 to 76 or any other relevant provisions of the CompaniesAct 2013 and the rules framed there-under. Accordingly the paragraph 3(v) of the orderis not applicable to the Company.
6. We have broadly reviewed the cost records maintained by the Companyin respect of products where pursuant to section 148(1) of the Companies Act 2013 themaintenance of cost records has been prescribed and are of the opinion that prima-faciethe prescribed cost records have been maintained. However we are not required to carryout and have not carried out a detailed examination of the records with a view todetermine whether they are accurate and complete.
7. (a) According to the information and explanations given to us thecompany is generally regular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund Employees State Insurance Income-Tax TDSSales-Tax Service Tax Goods and Services Tax Duty of Customs Duty of Excise ValueAdded Tax Cess and other material statutory dues applicable to it.
According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employee's state insuranceincome-tax sales-tax service tax goods and services tax duty of customs duty ofexcise value added tax cess were in arrear as at 31st March 2021 for a period of morethan six months from the date they became payable.
(b) According to the information and explanations given to us thefollowing dues of duty of excise duty of custom have not been deposited by the company onaccount of dispute:
8. Based on our audit procedures and on the information andexplanations given to us the Company did not have any outstanding debentures during theyear. Further Company has not defaulted in repayment of loans or borrowings to financialinstitution or to banks or to government as on balance sheet date.
9. On the basis of information and explanations given to us term loanwere applied for the purpose for which the loans were obtained. No moneys have been raisedduring the year by way of initial public offer or further public offer.
10. During the course of our examination of the books and records ofthe Company carried out in accordance with generally accepted auditing practice in Indiaand according to the information and explanations given to us we have neither come acrossany instance of fraud on or by the Company noticed or reported during the year nor havebeen informed of such case by the management.
11. According to the information and explanations give to us and basedon our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the provisions of section 197 read withSchedule V of the Companies Act 2013.
12. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable.
13. According to the information and explanations given to us and basedon our examination of the records of the Company transactions with the related partiesare in compliance with sections 177 and 188 of the Act where applicable and details ofsuch transactions have been disclosed in the standalone Ind AS financial statements asrequired by the applicable accounting standards.
14. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not issued fully orpartly convertible debentures during the year. However the Company has issued andallotted fully convertible warrants on preferential basis during the year and the companyis in compliance with the requirements of Section 42 of the Companies Act 2013 includingrules made therein; and Chapter V of SEBI (ICDR) Regulations 2018. The Company had issuedand allotted 600000 fully convertible warrants convertible into 600000 equity sharesof face value of H10/- each at an issue price of H150/- each to the selected persons onpreferential basis. During the year out of 600000 fully convertible warrants 165000warrants were converted into 165000 equity shares of face value of H10/- each (withshare premium of H140/- each). At the end of March month the company received Rs41062500/- (100% consideration for 165000 warrants and 25% of upfront money forremaining 435000 warrants). Money received against share warrants is not utilized duringthe year.
15. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.
16. The Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is notapplicable.
Annexure B to Independent Auditors' Report
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of PG Electroplast 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 the company's policies the safeguardingof its 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 based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing as specified undersection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls and both issued by The Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto 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 standalone financial statements for external purposes inaccordance with generally accepted accounting principles.
A company's internal financial control over financial reportingincludes 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 standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorizations of management and directorsof the company; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the standalone 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 the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India.