Page 99 - Annual Report 2019-20

ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT ANNEXURE “B” TO THE INDEPENDENT AUDITOR’S REPORT 97

TO ThE MEMBERS OF PIDILITE InDuSTRIES LIMITED FOR ThE yEAR EnDED 31 MARCh 2020 TO ThE MEMBERS OF PIDILITE InDuSTRIES LIMITED FOR ThE yEAR EnDED 31 MARCh 2020
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(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date) (Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)
Report on the Internal Financial Controls Over Financial Meaning of Internal Financial Controls Over Financial i) a) The Company has maintained proper v) According to the information and explanations
Reporting under Clause (i) of Sub-section 3 of Section Reporting records showing full particulars, including given to us, the Company has not accepted any PIDILITE ANNUAL REPORT 2019-20
143 of the Companies Act, 2013 (“the Act”) A company’s internal financial control over financial quantitative details and situation of fixed deposit during the year. In respect of unclaimed
We have audited the internal financial controls over reporting is a process designed to provide reasonable assets. deposits, the Company has complied with the
financial reporting of Pidilite Industries Limited (“the assurance regarding the reliability of financial reporting
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Company”) as of 31 March 2020 in conjunction with our and the preparation of financial statements for external b) The fixed assets were physically verified provisions of Sections 73 to 76 or any other
audit of the standalone Ind AS financial statements of purposes in accordance with generally accepted relevant provisions of the Companies Act, 2013.
the Company for the year ended on that date. accounting principles. A company’s internal financial during the year by the Management in
Management’s Responsibility for Internal control over financial reporting includes those policies accordance with a regular programme of vi) The maintenance of cost records has been
Financial Controls and procedures that verification which, in our opinion, provides specified by the Central Government under
The Company’s management is responsible for (1) pertain to the maintenance of records that, in for physical verification of all the fixed assets section 148(1) of the Companies Act, 2013.
reasonable detail, accurately and fairly reflect the
establishing and maintaining internal financial controls transactions and dispositions of the assets of the at reasonable intervals. According to the We have broadly reviewed the cost records
based on the internal control over financial reporting company; information and explanation given to us, no maintained by the Company pursuant to the
criteria established by the Company considering the material discrepancies were noticed on Companies (Cost Records and Audit) Rules,
essential components of internal control stated in the (2) provide reasonable assurance that transactions are
Guidance note on Audit of Internal Financial Controls recorded as necessary to permit preparation of such verification. 2014, as amended prescribed by the Central
Over Financial Reporting issued by the Institute of financial statements in accordance with generally Government under sub-section (1) of Section
Chartered Accountants of India. These responsibilities accepted accounting principles, and that receipts c) According to the information and 148 of the Companies Act, 2013, and are of the
include the design, implementation and maintenance of and expenditures of the company are being explanations given to us and the records opinion that, prima facie, the prescribed cost
adequate internal financial controls that were operating made only in accordance with authorisations of examined by us and based on the
management and directors of the company; and
effectively for ensuring the orderly and efficient conduct records have been made and maintained. We
of its business, including adherence to company’s (3) provide reasonable assurance regarding prevention examination of the registered sale deed/ have, however, not made a detailed examination
policies, the safeguarding of its assets, the prevention or timely detection of unauthorised acquisition, use, transfer deed/ conveyance deed provided to of the cost records with a view to determine
and detection of frauds and errors, the accuracy and or disposition of the company’s assets that could us, we report that, the title deeds, comprising whether they are accurate or complete.
completeness of the accounting records, and the timely have a material effect on the financial statements. all the immovable properties of land and
preparation of reliable financial information, as required Inherent Limitations of Internal Financial Controls Over
under the Companies Act, 2013. Financial Reporting buildings which are freehold, are held in the vii) According to the information and explanations
Auditor’s Responsibility Because of the inherent limitations of internal financial name of the Company as at the balance sheet given to us, in respect of statutory dues:
Our responsibility is to express an opinion on the controls over financial reporting, including the possibility date. In respect of immovable properties a) The Company has generally been regular
Company’s internal financial controls over financial of collusion or improper management override of of land and buildings that have been taken in depositing undisputed statutory dues,
reporting of the Company based on our audit. We controls, material misstatements due to error or fraud on lease and disclosed as fixed asset in the
conducted our audit in accordance with the Guidance may occur and not be detected. Also, projections of any financial statements, the lease agreements including Provident Fund, Employees’ State
note on Audit of Internal Financial Controls Over evaluation of the internal financial controls over financial are in the name of the Company, where the Insurance, Income-tax, Goods and Service
Financial Reporting (the “Guidance note”) issued by reporting to future periods are subject to the risk that Tax, Customs Duty, Cess and other material
the Institute of Chartered Accountants of India and the the internal financial control over financial reporting may Company is the lessee in the agreement. statutory dues applicable to it to the
Standards on Auditing prescribed under Section 143(10) become inadequate because of changes in conditions,
of the Companies Act, 2013, to the extent applicable to or that the degree of compliance with the policies or ii) As explained to us, the inventories were appropriate authorities.
an audit of internal financial controls. Those Standards procedures may deteriorate. physically verified during the year by the
and the Guidance note require that we comply with Opinion Management at reasonable intervals and no b) There were no undisputed amounts payable
ethical requirements and plan and perform the audit to In our opinion, to the best of our information and material discrepancies were noticed on physical in respect of Provident Fund, Employees’
obtain reasonable assurance about whether adequate according to the explanations given to us, the Company State Insurance, Income-tax, Goods and
internal financial controls over financial reporting has, in all material respects, an adequate internal financial verification.
was established and maintained and if such controls controls system over financial reporting and such internal Service Tax, Customs Duty, Cess and other
operated effectively in all material respects. financial controls over financial reporting were operating iii) The Company has not granted any loans, secured material statutory dues in arrears as at
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Our audit involves performing procedures to obtain effectively as at 31 March 2020, based on the criteria or unsecured, to companies, firms, Limited 31 March 2020 for a period of more than
audit evidence about the adequacy of the internal for internal financial control over financial reporting Liability Partnerships or other parties covered in six months from the date they became
financial controls system over financial reporting and established by the Company considering the essential the register maintained under section 189 of the payable.
their operating effectiveness. Our audit of internal components of internal control stated in the Guidance Companies Act, 2013.
financial controls over financial reporting included note on Audit of Internal Financial Controls Over iv) In our opinion and according to the information
PIDILITE ANNUAL REPORT 2019-20 material weakness exists, and testing and evaluating the (Firm’s Registration no. 117366W/W-100018) complied with the provisions of Sections 185 and
Financial Reporting issued by the Institute of Chartered
obtaining an understanding of internal financial controls
Accountants of India.
over financial reporting, assessing the risk that a
and explanations given to us, the Company has
For DELOITTE HASKINS & SELLS LLP
design and operating effectiveness of internal control
Chartered Accountants
based on the assessed risk. The procedures selected
186 of the Companies Act, 2013 in respect of
depend on the auditor’s judgement, including the
grant of loans, making investments and providing
assessment of the risks of material misstatement of the
N. K. Jain
guarantees and securities, as applicable.
Partner
financial statements, whether due to fraud or error.
(Membership no. 045474)
is sufficient and appropriate to provide a basis for
Place: Mumbai
our audit opinion on the Company’s internal financial
Date: 17 June 2020
controls system over financial reporting.
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96 We believe that the audit evidence we have obtained uDIn: 20045474AAAABF7632