We have audited the accompanying Standalone Financial Statements of MMP INDUSTRIES LIMITED (the “Company”),
which comprises the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss (including the Other Comprehensive
Income / (Losses), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date and
notes to the Standalone Financial Statements, including a summary of material 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 explanations given to us, the aforesaid Standalone
Financial Statements give the information required by the Companies Act, 2013, as amended, (“the Act”) in the manner so
required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of
the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended (“Ind AS”), and other accounting
principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, and its standalone profit
including total comprehensive income / (losses), its standalone cash flows and the standalone changes in equity for the year
ended on that date.
Basis of Opinion
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs)
specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the “Auditor’s
Responsibilities for the Audit of the Standalone Financial Statements” section of our report. We are independent of the
Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“the ICAI”)
together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions
of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate
to 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 most significance 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 Financial
Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For
each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters and to be communicated in our report. We have
fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the Standalone Financial Statements
section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risk of material misstatement of the Standalone Financial Statements. The results
of our audit procedures, including the procedures performed to address the matter below, provide the basis for our audit
opinion on the accompanying Standalone Financial Statements.
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The Key Audit Matters
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How was the matter addressed in our Audit
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Revenue Recognition (Refer Note No. 1.4.(d) and 29 of the Standalone Financial Statements)
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Revenue is one of the key profit drivers and is therefore
susceptible to misstatements. Revenue is measured in net of
any discounts and rebates. Revenue from sale of products is
considered as key audit matter as there is a risk of accuracy
of recognition and measurement of sales in the Standalone
Financial Statements considering the following aspects:
* Determination of performance obligation for recognition
of revenue.
* Estimation of variable consideration in pricing.
* Cut-off is the key assertion in so far as revenue recognition
is concerned, since an inappropriate cut-off can result in
material misstatement of results for the periods.
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Our audit procedures with regards to revenue recognition is a
combination of internal controls and substantive procedures
which included the following:
* Evaluated the design of internal control.
* For evaluation of operating effectiveness of internal
controls, tested revenue by verifying, on sample basis,
agreements executed with the customers, relevant
documentary evidence of satisfaction of performance
obligation for timing of recognition of revenue, accuracy
of revenue recognition including variable consideration
included pricing, cut off transactions at the year end and
tax amount of the invoices.
* Performed substantive testing by verifying the sales
invoice and other relevant documentary evidence on
sample basis.
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* Obtain the balance confirmation from selected samples
and verified the reconciliation, if any, for the confirmation
received.
* Evaluated the appropriateness of accounting policies,
related disclosures made and overall presentation in the
Standalone Financial Statements.
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Capital Work-in-Progress / Property, Plants and Equipment
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The Company had embarked on a project on enhancement
of Property, Plants and Equipment in “UMRED” and
“BHANDARA” location. The Value of such Property, Plant
and Equipment capitalized during the reporting period is
' 2,478.43 Lakhs and ' 1,609.39 Lakhs respectively. The
project needs to be capitalized and depreciated once the assets
are ready to use as intended by the Company’s management.
Inappropriate timing of capitalization of the project and / or
inappropriate classification of categories of item of Property,
Plant and Equipment could results in material misstatement
of Capital Work-in-Progress / Property, Plant and Equipment
with a consequent impact on charge of depreciation and
results for the period.
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Our audit procedures included testing the design,
implementations and operating effectiveness of controls in
respect of review of capital work-in-progress, particularly
in respect of timing of the capitalization and recording of
additions to items of various categories of Property, Plant and
Equipment with source documentation, substantive testing
of appropriateness of the cut-off date considered for project
capitalization.
We tested the source documentation to determine whether the
expenditure is of capital nature and has been appropriately
approved and segregated into appropriate categories. We
reviewed operating expenses to determine the appropriateness
of accounting. Further, through sites visit, we physically
verified the existence of capital work-in-progress / Property,
Plant and Equipment.
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Existence and Valuation of Inventories
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The Company’s inventories as at the end of the reporting
period are ' 13,472.16 Lakhs representing 26.65% of
the Company’s total assets. (Refer “Note No. 10” of the
Standalone Financial Statements)
The existence of inventories is a key audit matters due to
involvement of high risk, basis the nature and size of the
products where in value per unit is relatively insignificant
but high volumes are involved which are distributed across
different plants of the Company.
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In response to these key matters, our audit included, among
others, the following principal audit procedures:
* Understood the management’s control over physical
inventory counts and their valuation.
* Evaluation of design and testing of the operating
effectiveness of internal controls relating to physical
inventory counts at the plants. In testing these controls,
we observed the inventory cycle count process on a
sample basis, inspected the results of the inventory cycle
count and confirmed that the variances were approved
and appropriately accounted for.
* Evaluation of design and testing of the operating
effectiveness of internal controls relating to purchases,
sales and inventories including the automated controls.
* We have performed the physical verification of
inventories on a sample basis for establishing the
existence of inventory as at the end of the reporting
period.
* For a representative sample, verification that the finished
goods inventories were correctly measured, using a
recalculation of the measurement of those inventories
based on the cost of acquiring them from suppliers and
considering the costs of directly attributable to such
goods.
* Assessed the key estimates used by the Company’s
management to determine the net realizable value and
the consistency thereof with the Company’s policy on
provision for non-moving inventory and performed a
sensitivity analysis on the estimated selling price and
compared with the cost per item.
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Carrying Value of Trade Receivables
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As at March 31, 2025, trade receivables constitute
approximately 17.71% of total assets of the Company (Refer
“Note No. 11” of the Standalone Financial Statements). The
Company is required to regularly assess the recoverability of
its trade receivables.
The Company applied, expected credit loss (ECL) model
for measurement and recognition of impairment loss on
trade receivables. The Company uses a provision matrix to
determine impairment loss allowances. The provision matrix
is based on its historically observed default rates over the
expected life of trade receivables and is adjusted for forward¬
looking estimates.
This is a key audit matters as significant judgment is involved
to establish the provision matrix.
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Our audit procedures included, among other the followings:
* Evaluated the Company’s accounting policies pertaining to
impairment of financial assets and assessed compliance
with those policies in term of Ind AS - 109, “Financial
Instruments”.
* Assessed and tested the design and operating effectiveness
of the Company’s internal financial controls over
provision for expected credit loss (ECL).
* Evaluated the management’s assumption and judgment
relating to various parameters which included the
historical default rates and business environment in
which the entity operates for estimating the amount of
such provision.
* Evaluated the management’s assessment of recoverability
of the outstanding receivables and recoverability of the
overdue / aged receivables through inquiry with the
management, and analysis of the collection trends in
respect of receivables.
* Assessed and read the disclosures made by the Company in
the Standalone Financial Statements.
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Emphasis on Matters
We draw attention to the “Note No. 52” of the Standalone Financial Statements, which describes events subsequent to the
year end, the effects of a fire in the Company’s production facilities. Since, this is the non-adjusting subsequent event, no
adjustment has been made in the Standalone Financial Statements for the period ended March 31, 2025. Our opinion is not
modified in respect of these matters.
Information Other than the Financial Statements and Auditor’s Report thereon
The Company’s Management and the Board of Directors are responsible for the other information. The other information
comprises the information included in the Management’s Discussion and Analysis, Board’s Report including Annexure to
the Board’s Report, Report on Corporate Governance, Business Responsibility and Sustainability Report and Shareholder’s
information, but does not include the consolidated financial statements, standalone financial statements and our auditor’s
report thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements, or our
knowledge obtained 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 material misstatement of this other information; we are
required to report that fact. We have nothing to report in this regard.
Management’s Responsibility for the Standalone Financial Statements
The Company’s Management and the Board of Directors are responsible for the matters stated in Section 134(5) of the Act
with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the standalone
financial position, the standalone financial performance including the other comprehensive income / (losses), standalone cash
flows and standalone changes in equity of the Company in accordance with the accounting principle generally accepted in
India, including the Indian Accounting Standards (Ind AS) as specified under Section 133 of the Act, read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended, time to time. This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 are 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 presentations of the Standalone Financial Statements that give a true and fair view and
are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, the Company’s Management and the Board of Directors are responsible for
assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Company’s management and Board of Directors either intends to
liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Company’s Board of Directors are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from
material misstatement, whether due 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 audit conducted in accordance with SAs will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout
the audit. We also:
• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal controls.
• Obtain an understanding of internal financial controls relevant to the audit in order to design 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 has adequate internal financial controls with reference to Standalone Financial Statements in
place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Company’s Management and Board of Directors.
• Conclude on the appropriateness of the management’s 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 Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the Standalone Financial Statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures,
and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes
it probable that the economic decisions of a reasonably knowledgeable users of the Standalone Financial Statements may
be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in
evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial
Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order") issued by the Central Government of India
in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure “A”, a statement on the matters specified
in paragraph 3 and paragraph 4 of the said Order.
2. 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 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss including the Other Comprehensive
Income / (Losses), the Standalone Statement of Cash Flows and the Standalone Statement of Changes in Equity
dealt with this Reports are in agreement with the relevant books of account.
d. In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards as
specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended, time to time.
e. On the basis of the written representation received from the directors as on March 31, 2025, taken on the record by
the Board of Directors, none of directors is disqualified as on March 31, 2025, from being appointed as a director
in term of Section 164(2) of the Act.
f. With respect to adequacy of the internal financial controls with reference to these Standalone Financial Statements
of the Company and the operating effectiveness of such control, refer to our separate report in Annexure “B” Our
report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal
financial controls with reference to Standalone Financial Statements.
g. With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements
of Section 197(16) of the Act, as amended, time to time, in our opinion and to the best of our information and
explanations given to us, the remuneration paid / provided by the Company to its directors during the reporting
period is in accordance with the provision of section 197 of the Act.
h. With respect to the other matters to be included in the Independent Auditor’s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, as amended, time to time, 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 standalone financial position in its
Standalone Financial Statements - Refer “Note No. 47” of the Standalone Financial Statements.
(ii) The Company has made the necessary provisions, as required under the applicable law or the Indian
Accounting Standards, for material foreseeable losses, if any, on long-term contracts including derivative
contracts.
(iii) There has been no delay in transferring the amounts required to be transferred to the Investor Education and
Protection Fund by the Company.
iv) a) The Management has represented that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) have been advanced or loaned or invested (either
from borrowed fund or share premium or any other sources or kind of funds) by the Company to or in
any other person or entities, including the foreign entities (“Intermediaries"), with the understanding,
whether recorded in writing or otherwise, that the Intermediaries shall, whether, directly or indirectly
lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Company (“Ultimate Beneficiaries") or provide any guarantee, security or the like to or on behalf of
the Ultimate Beneficiaries;
b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) have been received by the Company from any person
or entities, including foreign entities (“Funding Parties"), with the understanding, whether recorded
in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
c) Based on such audit procedures that have been considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the representations
under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material
misstatement.
(v) As stated in “Note No. 50” to the Standalone Financial Statements:
a) The final dividend proposed in the previous year, declared and paid by the Company during the
reporting period is in accordance with section 123 of the Act, as applicable.
b) During the reporting period and until the date of this report, the Company has not declared or paid any
interim dividend in accordance with section 123 of the Act, as applicable.
c) The Board of Directors of the Company has proposed the final dividend for the period, which is subject
to the approval of the shareholders at their ensuing Annual General Meeting (AGM). The amount of
dividend proposed is in accordance with section 123 of the Act, as applicable.
(vi) Based on our examination, which included test check, the Company has used accounting software for
maintaining its books of accounts for the financial period ended March 31, 2025, which has a feature of
recording audit trail (edit log) facilities and the same has operated throughout the period for all the relevant
transactions recorded in the software systems. Further, during the course of our audit, we did not come across
any instance of the audit trail feature being tampered with and the audit trails have been preserved by the
Company as per the statutory requirements for the record retention.
Place: Nagpur For MANISH N JAIN & CO.
Dated: May 23, 2025 Chartered Accountants
UDIN No.: 25175398BMIEIS2622 FRN No. 0138430W
ARPIT AGRAWAL
Partner
Membership No. 175398
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