Page 94 - Annual Report 2019-20

INDEPENDENT AUDITOR’S REPORT 93

TO ThE MEMBERS OF PIDILITE InDuSTRIES LIMITED
Report on the Audit of the Standalone Financial Key Audit Matter Principal audit procedures Key Audit Matter Principal audit procedures Information Other than the Financial Statements and
Statements performed performed Auditor’s Report Thereon
Opinion Existence and condition We performed the following Impairment of Investment To evaluate impairment of The Company’s Board of Directors is responsible for PIDILITE ANNUAL REPORT 2019-20
We have audited the accompanying standalone of Inventories of raw and alternate audit procedures to in certain subsidiaries investment in these two the other information. The other information comprises
financial statements of Pidilite Industries Limited Packing Material, Work-in- audit the existence and (Refer note 7 of the subsidiaries, our procedures the information included in the Management Discussion
(“the Company”), which comprise the Balance Sheet progress, finished goods condition of inventories as Standalone Financial included: and Analysis, Directors’ Report including Annexures
as at 31 March 2020, and the Statement of Profit and stock In trade (Refer per the guidance provided Statements) to Directors’ Report, Business Responsibility Report,
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in SA 501 “Audit Evidence –
and Loss (including Other Comprehensive Income), note 16 to the standalone Specific Considerations for Corporate Governance and Information for Shareholder
financial statements)
the Statement of Cash Flows and the Statement of Selected Items”, as at the The standalone financial a. Evaluated the design and but does not include the consolidated financial
Changes in Equity for the year then ended, and a year-end, since we were not statements of the Company implementation of the statements, standalone financial statements and our
includes investment in
controls over identification
summary of significant accounting policies and other able to physically observe two subsidiaries, located of impairment indicators auditor’s report thereon.
explanatory information. the physical verification of at Brazil and Middle East, and review of the • Our opinion on the standalone financial statements
inventories:
In our opinion and to the best of our information and aggregating to 138.62 impairment assessment of does not cover the other information and we do not
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according to the explanations given to us, the aforesaid The Company has a policy Evaluated the design and crores (as at 31 March investment in subsidiaries express any form of assurance conclusion thereon.
standalone financial statements give the information of performing physical implementation of the 2020) which is measured and tested the operating • In connection with our audit of the standalone
required by the Companies Act, 2013 (“the Act”) in verification of inventories, controls over physical at cost less impairment and effectiveness of these financial statements, our responsibility is to read the
the manner so required and give a true and fair view with the assistance of verification of inventory is tested for impairment controls. other information and, in doing so, consider whether
in conformity with the Indian Accounting Standards appointed independent third and tested the operating annually. the other information is materially inconsistent with
prescribed under section 133 of the Act read with the parties, on a cyclical basis, as effectiveness of these Due to material accumulated b. Assessed the the standalone financial statements or our knowledge
Companies (Indian Accounting Standards) Rules, 2015, per plan, for all its locations, controls throughout losses being incurred by appropriateness and obtained during the course of our audit or otherwise
as amended, (“Ind AS”) and other accounting principles throughout the year. the year. these subsidiaries, the reasonableness of the appears to be materially misstated.
generally accepted in India, of the state of affairs of In accordance with such Due to the COVID-19 related Company’s management forecast cash flows
the Company as at 31 March 2020, and its profit total cyclical plan, physical lock-down we were not able has tested these within the budgeted • If, based on the work we have performed, we
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comprehensive income, its cash flows and the changes verification of inventories for to participate in the physical investments for impairment period based on the conclude that there is a material misstatement of this
in equity for the year ended on that date. certain locations which was verification of inventory in accordance with Ind AS understanding of the other information, we are required to report that fact.
planned to be performed as that was carried out by the 36. For impairment testing, business and after
Basis for Opinion at year-end, was performed management subsequent management determines considering the possible We have nothing to report in this regard.
by the management to the year-end at certain Management’s Responsibility for the Standalone
We conducted our audit of the standalone financial subsequent to the year-end, locations. Consequently, we recoverable amount, using impact due to Covid-19.
statements in accordance with the Standards on which we were unable to have performed the following cash flow projections, which Financial Statements
Auditing specified under section 143(10) of the Act physically observe, due to alternate procedures to audit represent management’s c. Considered historical The Company’s Board of Directors is responsible
forecasting accuracy, by
(SAs). Our responsibilities under those Standards are the restrictions imposed on the existence and condition of best estimate about future comparing previously for the matters stated in section 134(5) of the Act
further described in the Auditor’s Responsibility for the account of COVID-19. inventory: developments and takes into forecasted cash flows to with respect to the preparation of these standalone
Audit of the Standalone Financial Statements section account past experience. actual results achieved. financial statements that give a true and fair view of
of our report. We are independent of the Company The total value of inventory a. Observed the physical Key assumptions on the financial position, financial performance including
as at 31 March 2020 is
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in accordance with the Code of Ethics issued by the 730.49 crores. verification of inventories which management has d. Compared the assumptions other comprehensive income, cash flows and changes
Institute of Chartered Accountants of India (ICAI) carried out by the Manag- based its determination of made by the management in equity of the Company in accordance with the Ind
ement at the selected
together with the ethical requirements that are relevant locations subsequent to recoverable amount include of the Company with AS and other accounting principles generally accepted
to our audit of the standalone financial statements year-end through virtual estimated long-term growth comparable benchmarks in in India. This responsibility also includes maintenance
under the provisions of the Act and the Rules made mediums, to determine rates, weighted average cost relation to key inputs such of adequate accounting records in accordance with
thereunder, and we have fulfilled our other ethical existence and condition of of capital, Sales growth rate as long-term growth rates the provisions of the Act for safeguarding the assets of
responsibilities in accordance with these requirements inventory and on a sample and estimated operating and discount rates with the
and the ICAI’s Code of Ethics. We believe that the audit basis performed roll back margins. Management assistance of our fair value the Company and for preventing and detecting frauds
evidence obtained by us is sufficient and appropriate to procedures to arrive at the has obtained fair value specialists. and other irregularities; selection and application of
provide a basis for our audit opinion on the standalone quantities at the balance of investments from appropriate accounting policies; making judgments
sheet date.
financial statements. b. For stocks held at third independent valuation e. Performed sensitivity and estimates that are reasonable and prudent; and
analysis on the key
design, implementation and maintenance of adequate
experts for investments in
assumptions such as
Key Audit Matters
internal financial controls, that were operating effectively
the said two subsidiaries.
PIDILITE ANNUAL REPORT 2019-20 professional judgment, were of most significance in c. Performed additional recoverable amount involves discount rates, to ascertain accounting records, relevant to the preparation and
party locations, obtained
long-term growth rates and
for ensuring the accuracy and completeness of the
direct confirmation of the
Determination of
Key audit matters are those matters that, in our
inventory held by them as
the extent of change in
presentation of the standalone financial statement that
at the year-end.
significant judgements, as
our audit of the standalone financial statements of
those assumptions that
give a true and fair view and are free from material
regards to reasonableness
the current period. These matters were addressed in
would be required for
misstatement, whether due to fraud or error.
of assumptions involved in
alternate procedures which
the context of our audit of the standalone financial
the investment in these
estimating future cash flows
included inspection of
statements as a whole, and in forming our opinion
subsidiaries to be impaired
In preparing the standalone financial statements,
of these subsidiaries and in
supporting documentation
thereon, and we do not provide a separate opinion
further.
on these matters. We have determined the matters
ability to continue as a going concern, disclosing,
and production records
rate to be used.
described below to be the key audit matters to be
as applicable, matters related to going concern and
relating to inventory as at
communicated in our report. relating to purchases, sales determining the discount management is responsible for assessing the Company’s
92 year-end.