To The Members of P G Foils Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of P G Foils Limited("the Company") which comprise the Balance Sheet as at March 31 2021 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the 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 the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and givea true and fair view in conformity with the Indian Accounting Standards prescribed undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generallyaccepted in India of the state of affairs of the Company as at March 31 2021 the profitand total comprehensive income changes in equity and its cash flows for the year ended onthat date.
Basis for opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements
Key audit matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matter |
|1. Revenue Recognition |
|The Company recognises revenues when control of the goods is transferred to the customer at an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods. In determining the sales price the company considers the effects of rebates and discounts. |
|The terms of sales agreements including the timing of transfer of control the nature of discount and rebates arrangements and delivery specifications create complexity and judgment sales revenues and accordingly it was determined to be a key audit matter in our audit of the standalone financial statements. |
|Auditor's Response |
|Principal Audit Procedures |
| Considered the appropriateness of company's revenue recognition policy and its compliance in terms of Ind AS 115 'Revenue from contracts with customers; |
| Assessed design and tested the operating effectiveness of internal controls related to sales and related rebates and discounts; |
| Performed sample tests of individual sales transaction and traced to sales invoices sales orders and other related documents. In respect of the samples selected tested that the revenue has been recognized as per the sales agreements; |
| Assessed the relevant disclosures made in the standalone financial statements. |
|Key Audit Matter |
|2 Foreign currency transactions : |
|The company is having part turnover in foreign currency. It hedges currency Fluctuation through forward booking. Similarly imports are also hedged through forward booking. The company follows Ind AS - 109 for accounting of hedging transactions |
|Auditor's Response |
|Principal Audit Procedures: |
|Our audit approach and procedures were combination of test of internal controls and substantive procedures which included the following: Obtained an understanding of management's process and evaluated design and tested operating effectiveness of controls related to forward booking. |
|ii) Assessed the appropriateness of the methodology used by the management for forward booking. |
|iii) Assessed the professional competence of the person engaged by management in foreign currency matters |
|iv) Assessed the reasonableness of assumptions in forward booking |
|v) Based on our procedures we also considered the adequacy of disclosures and compliance of Ind AS in standalone financial statement. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing 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 section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so
The Board of Directors is responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrols.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's However future events or conditions may cause the Company to cease to continueas a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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.
Note No. 48 to the financial statement which describes that FDR investment of Rs. 69.00cr made by the company with Dhanlaxmi Bank ltd had been misappropriated by various partiesincluding the officials of the said bank . The case is under investigation with CompetantAuthority /Economic Offence wing Mumbai . Seeking to the merit of the case will be infavour of company and it will be able to receive all sum misappropriated. Based on thisthe company has not made provision.The final determination of the said investment amountwould depend upon the final decision of the appropriate authorities in future .Our opinionis not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit we report that :
a. We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books.
c. The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.
d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended including the Companies (Indian AccountingStandards) Amendment Rules 2019;
e. On the basis of the written representations received from the directors as on March312021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct.
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial
g. With respect to the other matters to be included in the Auditor's Report inaccordance 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 explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous
The Company has disclosed the impact of pending litigations on its financial positionin its standalone financial (Refer to Notes on Account 37)
ii. The Company did not have any long term contracts including derivative contract forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the company.
2. 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"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theorder.
Annexure "A" to the Independent Auditor's Report
(Referred to in paragraph 1(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of P G Foils Limited of even date)
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")
We have audited the internal financial controls over financial reporting of P G FoilsLIMITED ("the Company") as of March 31 2021 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls The Board of Directorsof the Company is responsible for establishing and maintaining internal financial controlsbased on 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. These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence torespective company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing 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. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the internal financial controls system over financialreporting of the Company.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes 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) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
Annexure 'B' to the Independent Auditor's Report
(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report to the Members of P G Foils 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 regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.
(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 asdisclosed in note no. 1 (a) on property and equipment to the standalone financialstatement are held in the name of the Company.
(ii) According to the information and explanation given to us and on the basis of ourexamination of the records of the company physical verification of the inventory has beenconducted at reasonable intervals by the management and discrepancies noticed which werenot material in nature have been properly dealt with in the books of accounts..
(iii) According to the information and explanation given to us during the year thecompany has not granted any loans secured or unsecured to companies firm or otherparties covered in the register maintained under section 189 of the Companies Act 2013.
(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities granted to the parties coveredU/S 185 and 186 during the year therefore the provision of clause 3(iv) of the said orderare not applicable.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of accounts maintained by the company pursuantto the Rules made by the Central Government for the maintenance of cost records undersection 148 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 such cost records.
(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 ofaccounts in respect of undisputed statutory dues including provident fund employee stateinsurance income-tax sales tax GST duty of customs value added taxcess and othermaterial statutory dues have generally been regularly deposited during the year by theCompany with the appropriate authorities.
According to the information and explanations given to us undisputed dues in respectof value added tax which were outstanding at the year end for a period of more than sixmonths from the date they became payable are as follows:
|NAME ||NATURE OF DUES ||PEIROD OF WHICH RELATES ||AMOUNT IN (RS) INTERET IN (RS) ||AMOUNT DEPOSITED |
|RAJASTHAN VAT ACT2003 ||DISALLOWANCE OF INPUT CREDIT ||2014-15 ||16639943/- ||5400000/- |
|RAJASTHAN VAT ACT2003 ||DISALLOWANCE OF INPUT CREDIT ||2015-16 ||5797700/- ||3235819/- |
(b) According to the records of the Company the dues outstanding of Customs and IncomeTax on account of any dispute are as follows:
|NAME ||NATURE OF DUES ||PEIROD OF WHICH RELATES ||AMOUNT IN (RS) INTERET IN (RS) ||AMOUNT DEPOSITED ||NAME |
|CUSTOM ACT1962 ||SAFEGUARD DUTY & VALUATION ||2009-10 ||12576869/- ||9744034 ||STAY GRANTED IN HON'BLE HIGH COURT MUMBAI AND CASE STILL PENDING |
|INCOME TAX ACT 1961 ||DIFFERENCE OF INCOME TAX ||2016-17 ||5329282/- ||NIL ||APPEAL FIELD BEFORE CIT APPEAL AHMEDABAD |
|INCOME TAX ACT 1961 ||DIFFERENCE OF INCOME TAX ||2017-18 ||2135739/- ||NIL ||APPEAL FIELD BEFORE CIT APPEAL AHMEDABAD |
(viii) The Company has not defaulted in repayment of loan or borrowing to a financialinstitution or bank government. There are no debenture holders.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments). According to the information and explanationgiven to us term loans raised during the year were applied for the purpose for whichthose were raised.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 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.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For : Sharma Ashok Kumar and Associates Chartered Accountants |
| ||Firm's registration number: 005848C |
| ||(CA Harish Agarwal) |
| ||Partner |
|Place: Pipalia Kallan ||Membership number: 403262 |
|Date: 30 June 2021 ||UDIN :21403212AAAAE07669 |