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Permanent Magnets Ltd.

BSE: 504132 Sector: Engineering
BSE 00:00 | 24 Apr 2020 Permanent Magnets Ltd
NSE 05:30 | 01 Jan 1970 Permanent Magnets Ltd

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OPEN 87.90
52-Week high 212.50
52-Week low 50.10
P/E 4.61
Mkt Cap.(Rs cr) 72
Buy Price 82.85
Buy Qty 67.00
Sell Price 85.95
Sell Qty 37.00
OPEN 87.90
CLOSE 87.80
52-Week high 212.50
52-Week low 50.10
P/E 4.61
Mkt Cap.(Rs cr) 72
Buy Price 82.85
Buy Qty 67.00
Sell Price 85.95
Sell Qty 37.00

Permanent Magnets Ltd. (PERMAGNET) - Auditors Report

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Company auditors report



We have audited the accompanying standalone financial statements of PERMANENTMAGNETS LIMITED ("the Company") which comprise the balance sheet as at 31stMarch 2019 the statement of profit and loss including Other Comprehensive Income theCash Flow Statement and the Statement of changes in equity for the year then ended andnotes to the financialstatements including a summary of significant accounting policiesand other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in Indiaincluding the Ind AS of the financial position Company as at 31stMarch2019and its profit (financialperformance including other comprehensive income)itscash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specifiedunder section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant statements toourauditofthefinancial under the provisions of the Act andthe Rules thereunder and we have fulfilledour other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements for the financial year endedMarch 31 2019. These matters were addressed in the context of our audit of the Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

For each matter below our description of how our audit addressed the matter isprovided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the Ind AS financialstatements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Ind AS financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
Adoption of Ind AS 115 - Revenue from Contract with Customers as described in note 2 i. and note 17 of the financial statements:
The Company has adopted Ind AS 115 - Revenue from Contracts with Customers mandatory for reporting periods beginning on or after April 1 2018. As part of our audit procedures our procedures included the following:
- We have read the accounting policy for revenue recognition and assessed compliance of the policy in terms of principles enunciated under Ind AS 115.
Application of Ind AS 115 including selection of transition method involves significant judgment in determining when 'control' of the goods or services underlying the performance obligation is transferred to the customer and the transition method to be applied. - We obtained and understood the revenue recognition process including determination of point of transfer of control and completion of performance obligation.
As the revenue recognition due to the significance of the balance to the financial statements as a whole we regard - this as a key audit matter. - We performed test of details on a sample basis and examined the underlying customer contracts. We examined the disclosures made by management in compliance with the requirements of Ind AS 115.
Our procedures did not identify any material exceptions

Emphasis of Matters

We draw attention to the following matters in the Notes to the Financial Statements: a.We draw attention to Note no. 3 of notes to accounts which states that Honorable BombayHigh Court has given interim stay order against the winding up order passed against theCompany dated 15/04/2015.

Honorable High Court of Bombay had passed winding up order dated 15/04/2015 for Windingup of the company on petition filed by M/s. Savino Del Bene Freight Forwarders (I) Pvt.Ltd. and court had issued direction for appointment of official liquidator in winding uporder.

On the appeal against this order made by the company before the Honorable Bombay HighCourt Honorable Bombay High Court has given interim stay order against the winding uporder passed (against the Company) dated 15/04/2015. Company has deposited Rs. 1905179/-Lakhs with interest as per direction of the Honorable Bombay High Court. Matter is pendingbefore the Bombay High Court and next hearing in this matter shall come up as per listingof the court.

The financial statements of the company have been prepared on Going Concern Basis onreasons mentioned in the note no.

3 of notes of accounts. b. We draw attention to Note no. 4 of notes to accounts of thefinancial statement regarding non receipts of confirmation in respect of balances dueunder Trade receivables and Trade payables though company has issued letters to thedebtors to that effect adjustments if any required upon such confirmation is notascertainable.

Our opinion is not modified in respect of these matters.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises information included in the Annual Report but does not include thefinancial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation; we are required to report that fact. We have nothing to report in thisregard.

Responsibility of Management and Those Charged With Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance (includingother comprehensive income)cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards specified in the Companies (Indian Accounting Standards)

Rules 2015 (as amended) under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of materialmisstatementofthefinancialstatements whetherdue to fraud or error design and perform audit procedures responsive to those risks andobtain audit evidence that is sufficientand appropriate to provide a basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higherthan for one resulting from error as fraud may involve collusion forgery intentionalomissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertainty existsrelated 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 materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures financial statements or if such disclosures are inadequate tothe modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on our independenceand where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 2016("theOrder")issued by the Central Government in terms of

Section 143 (11) of the Act we give in "Annexure A"a statement on thematters 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 andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b. In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books. c. The Balance Sheet the Statement of Profit and Loss(including other comprehensive income)the Cash Flow Statement and Statement of Changes inEquity dealt with by this Report are in agreement with the books of account. d. In ouropinion the aforesaid standalone financial statements comply with the Indian AccountingStandards prescribed under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. e. On the basis of written representations received from thedirectors as on 31st March 2019 none of the directors are disqualified as on31st March 2019 from being appointed as a director in terms of section164(2)oftheAct. f. With respect to the adequacy of the internal financial controls overfinancial reporting of the Company effectiveness of such controls refer to our separatereport in "Annexure B". g. With respect to the other matters to be included inthe Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014in our opinion and to the best of our information and according to theexplanations given to us: i. The Company has disclosed the impact of pending litigationsas at 31st March 2019 on its financial position in its standalone financialstatements - Refer Note No. 34 of Notes to Accounts to the standalone financialstatements. ii. The Company did not have any long-term contracts including derivativescontracts for which there were any material foreseeable losses. iii. Company has notdeclared and paid any dividend so there is no question of transferring amounts to theInvestor Education and Protection Fund by the Company. Therefore point is not applicableto the company.

For Ramanand & Associates
Chartered Accountants
ICAI Firm Reg. No. 117776W
CA Karan Verma
Place: Mumbai Partner
Date: 29th May 2019 M. No. 161335

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