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Polycab India Ltd.

BSE: 542652 Sector: Engineering
NSE: POLYCAB ISIN Code: INE455K01017
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OPEN 2235.00
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VOLUME 145720
52-Week high 2647.40
52-Week low 802.20
P/E 42.54
Mkt Cap.(Rs cr) 33,787
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2235.00
CLOSE 2223.80
VOLUME 145720
52-Week high 2647.40
52-Week low 802.20
P/E 42.54
Mkt Cap.(Rs cr) 33,787
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Polycab India Ltd. (POLYCAB) - Auditors Report

Company auditors report

for the year ended March 31 2021

To the Members of

Polycab India Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Polycab India Limited ("theCompany") which comprise the standalone balance sheet as at March 31 2021 and thestandalone statement of profit and loss (including other comprehensive income) standalonestatement of changes in equity and standalone statement of cash flows for the year thenended and notes to the standalone financial statements including a summary of thesignificant accounting policies and other explanatory information (herein after referredto as "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 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 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 Standalone FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our 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.

Key audit matter How our audit addressed the key audit matter
Revenue recognition - Wires and cables and Fast-Moving Electrical Goods (FMEG) business (Refer note 23 Standalone Financial Statements)
Our audit procedures over the recognition of revenue included the following:
Wires and cables and FMEG business: • We assessed the compliance of the Company's revenue recognition accounting policies against the requirements of Indian Accounting Standards ("Ind AS") to identify any inappropriate policy;
Based on its business model in Wires and FMEG business the Company has many different types of terms of delivery arising from different types of performance obligations with its customers. Revenue from sale of goods is recognised when control is transferred to the customers and when there are no other unfulfilled obligations. This requires detailed analysis of each contract regarding timing of revenue recognition. Inappropriate assessment could lead to risk of revenue getting recognised before control has been transferred. • We tested the design implementation and operating effectiveness of key internal financial controls and processes for revenue recognition along with effectiveness of information technology controls built in automated processes;
Accordingly timing of recognition of revenue is a key audit matter. • On a sample basis we tested revenue transactions recorded during the year by verifying the underlying documents including invoices and shipping documents for assessment of fulfillment of performance obligations completed during the year; We analysed the timing of recognition of revenue and any unusual contractual terms;
• On a sample basis we tested the invoice and shipping documents for revenue transactions recorded during the period closer to the year end and subsequent to the year end to verify recognition of revenue in the correct period.
• We assessed the adequacy of disclosures in the standalone financial statements against the requirement of Ind AS 115 Revenue from contracts with customers.
Our audit procedures over inventory valuation included the following:
• Copper and aluminum-based inventory forms a significant part of the Company's inventory for which the Company enters into commodity contracts. The Company takes a structured approach to the identification quantification and hedging of risk of fluctuations in prices of copper and aluminum by using derivatives in commodities. • We tested the design implementation and operating effectiveness of key internal financial controls including controls over valuation of inventory accounting of derivative and hedging transactions;
• On a sample basis tested the accuracy of cost for inventory by verifying the actual purchase cost. Tested the net realizable value by comparing actual cost with most recent retail price:
• Inventories are measured at the lower of cost and net realizable value on On a sample basis tested the hedging relationship of eligible hedging instruments and hedged items;
•first in first out basis except for inventories qualifying as hedged items in a fair value hedge relationship. These inventories are measured at cost We used the work of our internal subject matter experts for assistance in verifying hedge effectiveness requirements of Ind AS 109 including the economic relationship between the hedged item and the hedging instrument.
•adjusted for the hedging gain or loss on the hedged item. We focused on this area because of its size the assumptions used in the valuation and the complexity which are relevant when determining the amounts recorded. • We assessed and tested adequacy and completeness of the Company's disclosures in the standalone financial statements.

Information Other than the Standalone Financial Statements and Auditors' Report thereon

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 standalone financial statements and our auditors'report thereon. 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 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 in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Standalone 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 standalone financialstatements that give a true and fair view of the state of affairs profit 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 alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible 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.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

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 internalcontrol.

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

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the Management and Board ofDirectors.

• Conclude on the appropriateness of the Management and Board of Directors' use ofgoing 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 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 the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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 auditors' 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.

Report on Other Legal and Regulatory Requirements

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.

(A) 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 ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books. c) The standalone balance sheet the standalone statement ofprofit and loss (including other comprehensive income) the standalone statement ofchanges in equity and the standalone statement of cash flows dealt with by this Report arein agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act. e) On the basis of the written representationsreceived from the directors as on March 31 2021 taken on record by the Board ofDirectors none of the directors is disqualified as on March 31 2021 from being appointedas a director in terms of Section 164(2) of the Act. f) With respect to the adequacy ofthe internal financial controls with reference to standalone financial statements of theCompany and the operating effectiveness of such controls refer to our separate Report in"Annexure B".

(B) 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: i. TheCompany has disclosed the impact of pending litigations as at March 31 2021 on itsfinancial position in its standalone financial statements - Refer Note 34 to thestandalone financial statements; ii. The Company has made provision as required under theapplicable law or accounting standards for material foreseeable losses if any onlong-term contracts including derivative contracts- Refer Note 20(B) to the standalonefinancial statements; iii. There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company. iv. The disclosures in thestandalone financial statements regarding holdings as well as dealings in specified banknotes during the period from November 8 2016 to December 30 2016 have not been made inthese standalone financial statements since they do not pertain to the financial yearended March 31 2021.

(C) With respect to the matter to be included in the Auditors' Report under section197(16) of the Act: In our opinion and according to the information and explanations givento us the remuneration paid by the company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) ofthe Act which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Bhavesh Dhupelia
Partner
Mumbai Membership No: 042070
May 13 2021 UDIN: 21042070AAAABW1509

Annexure – A to the Independent Auditors' Report

March 31 2021 on the Standalone financial statements

(Referred to in our report of even date)

With reference to the Annexure referred to in the Independent Auditors' Report to theMembers of the Company on the standalone financial statements for the year ended March 312021 we report the following: (i) (a) The Company has maintained proper records showingfull particulars including quantitative details and situation of the fixed assets(property plant and equipment). (b) The Company has a regular programme of physicalverification of its fixed assets (property plant and equipment) by which all fixed assets(property plant and equipment) are verified in a phased manner over a period of threeyears. In accordance with this programme a portion of the fixed assets (property plantand equipment) has been physically verified by the management during the year and nomaterial discrepancies have been noticed on such verification. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. (c) According to the information and explanationsgiven to us the title deeds of immovable properties as disclosed in Note 3 to thestandalone financial statements are held in the name of the Company except for thefollowing:

Particulars Freehold land
Gross Block as at March 31 2021 35.28
Net Block as at March 31 2021 35.28

(ii) The inventory except goods-in-transit and inventory lying with third parties hasbeen physically verified by management at reasonable intervals during the year. In ouropinion the frequency of such verification is reasonable. In respect of goods-in-transitsubsequent goods receipts have been verified and in respect of inventory lying with thirdparties at the year-end these have been confirmed by them. The discrepancies noticed onsuch verification between physical stocks and the book records were not material and havebeen properly dealt with in the books of account. (iii) The Company has granted unsecuredloan to three companies covered in the register maintained under Section 189 of the Act.

(a) In respect of the aforesaid loans the rate of interest and other terms andconditions of the grant of such loans is not prejudicial to the Company's interest.

(b) One of the aforesaid loans along with interest has been fully repaid during theyear. In respect of loans to the other companies the parties are repaying the principalamounts as stipulated and are also regular in payment of interest as applicable.

(c) There are no amounts overdue for more than ninety days at the balance sheet date.

(iv) According to the information and explanation given to us the Company has compliedwith the provisions of Section 185 and 186 of the Act in respect of loans grantedinvestments made or loans or guarantees or securities provided as applicable. (v)According to information and explanations given to us the Company has not accepted anydeposits from the public within the meaning of the directives issued by Reserve Bank ofIndia provisions of Sections 73 to 76 of the Act any other relevant provisions of theAct and the relevant rules framed thereunder. (vi) We have broadly reviewed the recordsmaintained by the Company pursuant to the rules prescribed by Central Government formaintenance of cost records under Section 148 (1) of the Act and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. Howeverwe have not made a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingthe undisputed statutory dues including provident fund employees' state insurance incometax goods and services tax duty of customs cess professional tax and other materialstatutory dues as applicable with the appropriate authorities. According to theinformation and explanations given to us no undisputed amounts payable in respect ofprovident fund employees' state insurance income tax goods and services tax duty ofcustoms cess professional tax and other material statutory dues were in arrears as atMarch 31 2021 for a period of more than six months from the date they became payable. (b)According to the information and explanations given to us there are no dues of incometax sales tax service tax goods and services tax duty of customs duty of excise orvalue added tax which have not been deposited with the appropriate authorities on accountof any dispute other than those mentioned in Appendix I to this report.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to banks or financialinstitutions. The Company did not have any outstanding loans or borrowings from theGovernment nor has it issued any debentures.

(ix) According to the information and explanations given to us the Company did notraise money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly para 3(ix) of the Order is notapplicable to the Company.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or on the Company by its officers or employees hasbeen noticed or reported during the year nor have we been informed of such case by themanagement. (xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid or 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 theinformation and explanations given to us the Company is not a Nidhi company. Accordinglypara 3(xii) of the Order is not applicable to the Company.

(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. The details of suchrelated party transactions have been disclosed in the notes to the financial statements asrequired by the applicable accounting standards. (xiv) According to the information andexplanations give to us and based on our examination of the records of the Company theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year. Accordingly para 3(xiv) of the Order isnot applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into non-cash transactions withdirectors or persons connected with him as referred to in section 192 of the Act.Accordingly para 3(xv) of the Order is not applicable to the Company. (xvi) In ouropinion and according to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly para 3(xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Bhavesh Dhupelia
Partner
Mumbai Membership No: 042070
May 13 2021 UDIN: 21042070AAAABW1509

Appendix I as referred to in Clause 3(vii)(b) of the Annexure - A to the Auditors'Report

Name of the Statute Nature of the Dues Amount (` Millions) Amount paid under protest (` Millions) Period to which the amount relates Forum where dispute is pending
Central Excise Act 1944 Excise duty 128.23 21.39 2006-07 2010-2011 2012-2016 2017-18 Asst. Comm / Comm / Comm (Appeals)/ GST Division
Service Tax (Finance Act 1994) Service tax 18.18 1.07 2007-11 Tribunal
State & Central Sales Tax 1956 Tax Interest & Penalty 30.62 4.01 2000-01 2007-08 2008-09 2009-10 2013-14 2014-15 2015-16 2016-17 Asst. Comm / Comm / Dy. Comm Appeal / Jt Comm (Appeal) / Comm Tax officer /Comm Tax Inspector/ Asst. Officer
Customs Act 1962 Custom duty 17.08 17.08 2010-11 Comm. of Customs
Central Goods and Service Tax Act 2017 Tax Interest & Penalty 144.34 100.73 2017-18 2018-19 2020-21 Dy. Comm Appeal/Jt Comm (Appeal)/High Court
Income Tax Act 1961 Income Tax 0.32 0.32 2016-17 ITAT

Annexure - B to the Independent Auditor's Report on Standalone Financial Statements ofPolycab India Limited

for the year ended March 31 2021

Report on the internal financial controls with reference to aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (Referred to in paragraph (A)(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to standalone financialstatements of Polycab India Limited as of March 31 2021 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as at March 31 2021 based on the internal financialcontrols with reference to standalone financial statements criteria 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 (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 controls with referenceto standalone financial statements criteria established by the Company considering theessential components of internal controls 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").

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. 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 with reference to standalone financial statements was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness.

Our audit of internal financial controls with reference to standalone financialstatements included obtaining an understanding of internal financial controls assessingthe risk that a material weakness exists and testing and evaluating the design andoperating effectiveness of internal controls based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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 standalone financial statements.

Meaning of Internal Financial Controls with reference to standalone financialstatements

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A Company's internalfinancial controls with reference to financial statements includes those policies andprocedures 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 as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the standalone financial statements.

Inherent Limitations of Internal Financial Controls with reference to standalonefinancial statements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Bhavesh Dhupelia
Partner
Mumbai Membership No: 042070
May 13 2021 UDIN: 21042070AAAABW1509

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