To the Members of Pennar Engineered Building Systems Limited Report on the Audit of the
Ind AS Financial Statements
Wc have audited the accompanying Ind AS financial statements of Pennar Engineered
Building Systems Limited ("the Company"), which comprise the Balance Sheet as at
31 March 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and
the Statement of Cash Flows for the year then ended, and summary of the significant
accounting policies and other explanatory information.
Managements Responsibility for the Ind AS Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these Ind AS financial statements that give a true and fair view of the state of affairs,
profit/ loss (including other comprehensive income), changes in equity and cash flows of
the Company in accordance with the accounting principles generally accepted in India,
including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the
Act.
This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that arc reasonable and
prudent; and design, implementation and maintenance of adequate internal financial
controls that were operating effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the Ind AS financial
statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, management is responsible for assessing the
Companys ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Our responsibility is to express an opinion on these Ind AS financial statements based
on our audit.
We have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit of the Ind AS financial statements in accordance with the
Standards on Auditing specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the Ind AS financial statements are free from material
misstatement.
Auditors Responsibility
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the Ind AS financial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of material misstatement of the
Ind AS financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant to the Companys
preparation of the Ind AS financial statements that give a true and fair view in order to
design audit procedures that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of the accounting policies used and the reasonableness of
the accounting estimates made by the Companys Directors, as well as evaluating the
overall presentation of the Ind AS financial statements.
We are also responsible to conclude on the appropriateness of managements use of the
going concern basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast significant
doubt on the entitys ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in the auditors report to
the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify the opinion. Our conclusions are based on the audit evidence
obtained up to the date of the auditors report. However, future events or conditions may
cause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid Ind AS financial statements give the information required by
the Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India of the state of affairs of the Company
as at 31 March 2018, its profits (including other comprehensive income), changes in equity
and its cash flows for the year ended on that date.
Other matters
The comparative financial information of the Company for the year ended 31 March 2017
and the transition date opening balance sheet as at 1 April 2016 included in these Ind AS
financial statements, are based on the previously issued statutoiy financial statements
prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by
the predecessor auditor whose report for the year ended 31 March 2017 and 31 March 2016
dated 11 May 2017 and 16 May 2016 respectively expressed an unmodified opinion on those
financial statements, as adjusted for the differences in the accounting principles adopted
by the Company on transition to the Ind AS, which have been audited by us.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order")
issued by the Central Government in terms of Section 143(11) of the Act, we give in
"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the
Order.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best
of 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 the
Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and
Statement of Changes in Equity dealt with by this Report are in agreement with the books
of account;
d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian
Accounting Standards prescribed under Section 133 of the Act;
e) On the basis of the written representations received from the directors as on 31
March 2018 taken on record by the Board of Directors, none of the directors is
disqualified as on 31 March 2018 from being appointed as a director in terms of Section
164(2) of the Act;
I) With respect to the adequacy of the internal financial controls with reference to
financial statements of the Company and the operating effectiveness of such controls,
refer to our separate Report in "Annexure B"; and
g) With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our 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 its financial
position in its Ind AS financial statements - Refer Note 37 to the Ind AS financial
statements;
i i. The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including
derivative contracts - Refer Note 26 to the Ind AS financial statements;
iii. There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company; and
iv. The disclosures in the financial statements regarding holdings as well as dealings
in specified bank notes during the period from 8 November 2016 to 30 December 2016 have
not been made since they do not pertain to the financial year ended 31 March 2018. However
amounts as appearing in the audited Ind AS financial statements for the period ended 31
March 2017 have been disclosed.
for B S R & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 116231W/ W-100024
Amit Kumar Agarwal
Partner
Membership No.: 214198
Place: Hyderabad Date: 18 May 2018
Pennar Engineered Building Systems Limited
Annexure A to the Independent Auditors Report
The Annexure A referred to in the Independent Auditors Report of even date, on the Ind
AS financial statements, to the Members of Pennar Engineered Building Systems Limited
(‘the Company) for the year ended 31 March 2018. We report that:
i. (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets;
(b) The Company has a regular program of physical verification of its fixed assets by
which all fixed assets are verified in a phased manner over a period of three years. In
our opinion, the periodicity of physical verification is reasonable having regard to the
size of the Company and the nature of its assets. However, no physical verification was
carried out by the Management during the year. Accordingly, the discrepancies, if any,
could not be ascertained and therefore, we are unable to comment on whether the
discrepancies, if any, have been properly dealt with in the books of account.
(c) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the title deeds of immovable properties, as
disclosed in Note 4 (a) on fixed assets to the Ind AS financial statements, are held in
the name of the Company.
ii. The inventories, except goods-in-transit and stocks lying with third parties, have
been physically verified by the Management during the year. In our opinion, the frequency
of such verification is reasonable. The discrepancies noticed on verification between the
physical stocks and the book records were not material. For stocks lying with third
parties at the year-end, written confirmations have been obtained by the Management.
iii. According to information and explanations given to us, the Company has granted
loans to companies covered in the Register maintained under Section 189 of the Companies
Act, 2013 ("the Act").
(a) In our opinion, the rate of interest and other terms and conditions on which the
loans had been granted to the companies listed in the Register maintained under Section
189 of the Act were not, prima facie, prejudicial to the interest of the Company.
(b) In the case of the loans granted to the companies listed in the Register maintained
under Section 189 of the Act, the borrowers have been regular in the repayment of the
principal and payment of interest, wherever stipulated.
(c) There are no overdue amounts in respect of loans granted to companies listed in the
Register maintained under Section 189 of the Act.
iv. In our opinion and according to the information and explanations given to us, the
Company has complied with the provisions of Section 185 and 186 of the Act, with respect
to grant of loans and investments made. The Company has not provided any guarantees or
security to the parties covered under Section 185 and 186 of the Act.
v. According to the information and explanations given to us, the Company has not
accepted any deposits from the public.
vi. We have broadly reviewed the books of account maintained by the Company pursuant to
the Rules made by the Central Government of India for maintenance of cost records under
sub-section (1) of Section 148 of the Act, and are of the opinion that prima facie, the
specified accounts and records have been made and maintained. However, we have not made a
detailed examination of the records.
vii. (a) According to the information and explanations given to us and on the basis of
our examination of
the records of the Company, amounts deducted/ accrued in the books of account in
respect of undisputed statutory dues including Provident fund, Employees state insurance,
Income-tax, Sales- lax, Service tax, Duty of customs, Duty of excise, Value added tax,
Cess and other material statutory dues have been generally regularly deposited during the
year by the Company with the appropriate authorities. According to the information and
explanations given to us, no undisputed amounts payable in respect of Provident fund,
Employees state insurance, Income-tax, Sales-tax, Service tax, Duty of customs, Duty of
excise, Value added tax, Cess and other material statutory dues were in arrears as at 31
March 2018 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, there are no dues of Income- tax, Sales tax,
Service tax, Duty of customs, and Value added tax which have not been deposited with
appropriate authorities on account any dispute. According to the information and
explanations given to us, the following dues of Duty of excise have not been deposited by
the Company on account of dispute:
| Name of the Statute |
Amount (Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
| The Central Excise Act, 1944 |
3,551,089 |
June 2010 to March 2013 |
The Customs, Excise and Service fax Appellate Tribunal (CESTAT) |
viii. In our opinion and according to the information and explanations given to us, the
Company has not defaulted in repayment of loans or borrowings to its bankers. The Company
does not have any loan or borrowings from any financial institution or government, nor has
it issued any debentures during the year.
ix. In our opinion, and according to the information and explanations given to us, the
moneys raised by way of initial public offer have been applied by the Company during the
year for the purposes for which they were obtained other than temporary deployment pending
application of proceeds. The Company has not raised any money by way further public offer
(including debt instrument) and term loans during the year.
x. During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practices in India, and
according to the information and explanations given to us, we have neither come across any
instance of material fraud by the Company or on the Company by its officers or employees,
noticed or reported during the year, nor have we been informed of any such case by the
Management.
xi. According to the information and explanations given to us and based on our
examination of the records on the Company, the Company has paid/ provided for managerial
remuneration in accordance with the requisite approvals mandated by the provisions of
Section 197 read with Schedule V of the Act.
xii. According to the information and explanations given to us and based on our
examination of the records of the Company, the Company is not a Nidhi Company prescribed
under Section 406 of the Act. Accordingly, paragraph 3(xii) of the Order is not applicable
to the Company.
xiii. According to the information and explanations given to us and based on our
examination of the records of the Company, transactions with the related parties are in
compliance with Section 177 and 188 of the Act, where applicable, and details of such
transactions have been disclosed in the Ind AS financial statements as required by the
applicable accounting standards.
xiv. According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible debentures during
the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.
xv. According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not entered into any non-cash
transaction with the directors or person connected with him. Accordingly, paragraph 3(xv)
of the Order is not applicable to the Company. xvi. According to the information and
explanations given to us and based on our examination of the records of the Company, the
Company is not required to be registered under Section 45-IA of the Reserve Bank of India
Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.
For B S R & Associates LLP
Chartered Accountants
ICAI Firm Registration N into her: M6231 W/ W-100024
Amit Kumar Agarwal
Partner
Membership No.: 214198
Place: Hyderabad Date: 18 May 2018
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section
143 of the Companies Act, 2013 (‘the Act)
We have audited the internal financial controls over financial reporting of Pennar
Engineered Building Systems Limited (‘the Company) as of 31 March 2018 in
conjunction with our audit of the Ind AS financial statements of the Company for the year
ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
(‘the Guidance Note) issued by the Institute of Chartered Accountants of India
(‘ICAI). These responsibilities include the design, implementation and maintenance
of adequate internal financial controls that were operating effectively for ensuring the
orderly and efficient conduct of its business, including adherence to companys policies,
the safeguarding of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records, and the timely preparation of
reliable financial information, as required under the Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be
prescribed under Section 143(10) of the Act, to the extent applicable to an audit of
internal financial controls, both applicable to an audit of Internal Financial Controls
and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether adequate internal financial controls over financial reporting was
established and maintained and if such controls operated effectively in all material
respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A Companys internal financial control over financial
reporting includes those policies and procedures that:
1) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the Company
2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Company arc being made only in
accordance with authorisations of management and directors of the Company; and
3) provide reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use, or disposition of the Companys assets that could have a
material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31 March 2018, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note issued by the
ICAI.
for B S R & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 116231W/ W-100024
Amit Kumar Agarwal
Partner
Membership No.: 214198
Place: Hyderabad
Date: 18 May 2018
+91-9892691696
