We have audited the accompanying Standalone Financial Statements of Polycon International Limited (“the Company”), which comprise the
Balance Sheet as at 31st March 2024, and the Statement of Profit and Loss, Statement of Changes in Equity and Statement of Cash Flows for the
year ended on that date, notes to the 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 (“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 31st March, 2024, the net profit
and othercomprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of Standalone Financial Statements in accordance with the Standards on Auditing (SAs) specified under section 143(10)
of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the
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 (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone financial statements
under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance
with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key Audit Matters
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S. No. Key Audit Matters
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How our audit addressed the key audit matter
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1. Accuracy of recognition, measurement,
estimation, presentation and disclosures in
respect of “Revenue from contracts with
Customers” under Ind AS 115
The application of this revenue accounting standard
involves certain key judgments relating to identification
of distinct performance obligations, determination of
transaction price of identified performance obligations,
the appropriateness of the basis used to measure
revenue recognized over a period, and disclosures
including presentations of balances in the financial
statements.
Estimated efforts is a critical estimate to determine
revenue, as it requires consideration of progress of the
contract, efforts incurred till date, efforts required to
complete the remaining performance obligation.
(Refer Note No. 25of financial statements and Item No.
2.3.5 of the Significant Accounting Policy Information to
the financial statements.)
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Principal Audit Procedures Performed includes the
following:
Our audit approach consisted testing of the design and
operating effectiveness of internal controls and
procedures as follows:
• Evaluated the effectiveness of controls over the
preparation of information that are designed to
ensure the completeness and accuracy.
• Selected a sample of existing continuing contracts
and new contracts, and tested the operating
effectiveness of the internal control, relating to
identification of the distinct performance
obligations and determination of transaction price.
• Tested the relevant information, accounting
systems and change relating to contracts and
related information used in recording and
disclosing revenue in accordance with Ind AS 115.
• Reviewed a sample of contracts to identify
possible delays in achieving milestones, which
require change in estimated efforts to complete the
remaining performance obligations.
• Performed analytical procedures and test of details
for reasonableness and other related material
items.
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2. Assessment of Expected Credit Loss (ECL) for
Trade Receivables
The company has applied simplified approach to
measure ECL for trade receivables, which allows for
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Principal Audit Procedures
We have applied the following audit procedures in this
regard:
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lifetime expected credit losses to be recognized from initial
recognition of the receivables. The company determines
the expected credit losses on trade receivables by using
a provision matrix that is based on historical credit loss
experience, adjusted for forward looking factors to the
debtors and the economic environment. Recognition and
measurement of expected credit loss involves significant
management judgement.
These include:
• Identification of exposures where there is a significant
increase in credit risk
• Completeness and timing of recognition of default, in
accordance with the credit policy of the company
• Estimation of Forward-Looking Adjustments
Due to significance of trade receivables and the complexity
involved in the ECL calculation, this was considered as a
key audit matter.
(Refer Note No. 9 of financial statements and Item No.
2.3.15 of the Significant Accounting Policy Information to
the financial statements.)
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• We have obtained an understanding of the company's
credit policy along with the applications controls
associated with the accuracy of the information
included in the debtors ageing report.
• We evaluated the company's process of ECL
calculation. We assessed the reasonableness of the
assumptions used in ECL calculation by comparing
them with the historic data adjusted for current market
condition and forward-looking information.
• We have also considered the disclosures made by
the company under the head credit risk.
Based on the above procedure performed, the management
estimations and judgement in ECL were found to be
reasonable.
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3. Assessment of ContingentLiabilities
The Company is subject to a number of legal, regulatory,
arbitration and tax cases for which final outcome cannot
be easily predicted and which could potentially result in
significant liabilities.
The assessment of whether a liability is recognised as a
provision or disclosed as a contingent liability in the
financial statements is inherently subjective and requires
significant management judgement in determination of the
cash outflows from the business, interpretation of
applicable laws and regulations, and careful examination
of pending assessments at various levels of regulatory
authorities.
We identified this as a key audit matter because the
estimates on which these amounts are based involve a
significant degree of management judgement in interpreting
the cases and it may be subject to management bias.
(Refer Note No. 40 and Item No. 2.3.12of the Significant
Accounting Policy Information to the Financial Statements)
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Principal Audit Procedures
We have adopted the following audit procedures
• Understood and tested the design and operating
effectiveness of controls as established by the
management for obtaining all relevant information for
pending litigation cases
• Discussed with the management any material
developments and latest status of legal matters at
the corporate office.
• Read various correspondences and related
documents pertaining to litigation cases and
performed substantive procedures on calculations
supporting the disclosure of contingent liabilities
Assessed the adequacy and completeness of
disclosures.
Based on the above procedure performed, the estimations
and disclosure of contingent liabilities are considered to be
adequate and reasonable
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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 other information. The other information comprises
the Corporate Governance Report, and the information included in the Directors' Report including Annexures, Management
Discussion and Analysis, Business Responsibility and Sustainability Report and other company related information (but does
not include the Financial Statements and our auditors' report thereon), which are expected to be made available to us after the
date of this auditors' report.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not and will 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 identified
above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the
Standalone Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read such other information, as and when made
available to us and if we conclude that there is a material
misstatement therein, we are required to communicate the
matter to those charged with governance and take
appropriate actions, if required.
Responsibilities of Management and Those Charged
with Governance for the Standalone Financial
Statements
The Company's management is responsible for the matters
stated in section 134(5) of the Companies Act, 2013 (“the
Act”) with respect to the preparation of these standalone
financial statements that give a true and fair view of the
financial position, financial performance, total
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) specified under section 133 of the Act
read with the Companies (Indian Accounting Standards)
Rules, 2015 as amended. 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 implementation and maintenance of 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
presentation of the financial statement that give a true and
fair view and are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Board of Directors
is 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 management either intends to liquidate
the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors are also responsible for overseeing
the Company's financial reporting process.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance about
whether the 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 the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these 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 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 control.
• Obtain an understanding of internal control
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 system 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 management.
• Conclude on the appropriateness of
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 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 financial statements, including the
disclosures, and whether the 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 user of the 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 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 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
in terms of Section 143(11) of the Act and on the basis
of such checks of the books and records of the
company as we considered appropriate and according
to the information and explanations given to us, we
give in “Annexure A” a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the
extent applicable.
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 except
for the matters stated in the paragraph 2(i)(vi) below
on reporting under Rule 11(g) of the Companies (Audit
and Auditors) Rules, 2014.
(c) The Standalone Balance Sheet, the Standalone
Statement of Profit and Loss (Including Other
Comprehensive Income), the Standalone Statement of
Changes in Equity and the Standalone Statement of
Cash Flows dealtwith by this Report are in agreement
with the relevant books of account.
(d) In our opinion, the aforesaid standalone financial
statements comply with the Indian Accounting
Standards (Ind AS) specified under Section 133 of the
Act.
(e) On the basis of the written representations received
from the directors as on 31stMarch, 2024 taken on
record by the Board of Directors, none of the directors
is disqualified as on 31st March, 2024 from being
appointed as a director in terms of Section 164 (2) of
the Act.
(f) The modifications relating to the maintenance of
accounts and other matters connected therewith are
as stated in the paragraph 2(b) above on reporting
under Section 143(3)(b) of the Act and paragraph 4
below on reporting under Rule 11 (g) of the Companies
(Audit and Auditors) Rules, 2014.
(g) With respect to the adequacy of the internal
financial controls over financial reporting of the
Company and the operating effectiveness of such
controls, 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 over financial
reporting.
(h) With respect to the other matters to be included in the
Auditor's Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, as
amended
In our opinion and to the best of our information and
according to the explanations given to us, the
Company has paid managerial remuneration in
accordance with the provisions of section 197 of the
Act.
(i) 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, as
amended in our opinion and to the best of our
information and according to the explanation given to
us.
i. The Company has disclosed the impact of pending
litigations on its financial position in its standalone
financial statements. - Refer Note No. 40 of the
Financial Statements.
ii. 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.
iii. During the year there is no requirement of any amount
to be transferred of an unclaimed dividend to the
Investor Education and Protection Fund under section
124(5) of the Companies Act, 2013.
iv. The Company has provided requisite disclosures in
the financial statements, on the basis of information
available with the Company. Based on audit
procedures and relying on the management
representation, we report that the disclosures are in
accordance with books of account maintained by the
Company and as produced to us by the Management.
v. (a) The management has represented that, to the best
of its knowledge and belief, as disclosed in thenotes to
the Standalone Financial Statements, no funds have been
advanced or loaned or invested(either from borrowed
funds or share premium or any other sources or kind of
funds) by the Companyto or in any other person(s) or
entity(ies), including foreign entities (“Intermediaries”),
with theunderstanding, whether recorded in writing or
otherwise, that the Intermediary shall, whether, directlyor
indirectly, lend or invest in other persons or entities
identified in any manner whatsoever by or onbehalf of
the Company (“Ultimate Beneficiaries”) or provide any
guarantee, security or the like onbehalf of the Ultimate
Beneficiaries ;
(b) The management has represented that, to the best of its
knowledge and belief, as disclosed in thenotes to the
Standalone Financial Statements,no funds have been
received by the Company from anyperson(s) or
entity(ies), including foreign entities (“Funding Parties”),
with the understanding, whetherrecorded 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
UltimateBeneficiaries ; and
(c) Based on such audit procedures that we considered
reasonable and appropriate in the
circumstances,nothing has come to our notice that has
caused us to believe that the representations under
subclause(a) and (b) contain any material misstatement.
(v) No dividend has been declared and paid during the year
by the Company.
(vi) Based on our examination which included test checks,
the company has used an accounting software for
maintaining its books of account which has a feature of
recording audit trail (edit log) facility. The audit trail (edit
log) facility in the accounting softwarewas inoperative
from 1stApril, 2023 to 29th March 2024 for all relevant
transactions recorded in the software during the year.
Further, for the periods where audit trail (edit log) facility
was enabled and operated, we did not come across
any instance of the audit trail feature being tampered
with.
As proviso to Rule 3(1) of the Companies (Accounts)
Rules, 2014 is applicable from April 1, 2023, reporting
under Rule 11(g) of the Companies (Audit and Auditors)
Rules, 2014 on preservation of audit trail as per the
statutory requirements for record retention for financial
year 2023-24 is commenced from 1st April 2024, hence
not applicable for the financial year ended March 31,
2024.
For S R Goyal & Co.
Chartered Accountants
FRN: 001537C
Place:Jaipur A.K. Atolia
Date: 30-05-2024 (Partner)
UDIN: 24077201BKEQDW1156 M.No.: 077201
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